Our previous 5500's for the welfare plan were filed as Group Insurance Arrangements, but our premiums are not paid through a trust, so I don't think we can/should continue doing that. If we change to show as a single employer plan, does that raise any red flags? Can/should we file as a single employer plan, when we actually have two employers participating? But I believe due to being closely controlled, they would qualify as single employer still, based on what I have read, but I am not sure.

Thanks!

As a TPA we provide Section 125 administration for POP Plans and unreimbursed medical and dependent care spending accounts. We recently had a call from a small employer that was setting up a MSA and HDHP at the advice of their insurance broker and their broker referred them to our office to set up a health FSA. I am the first to admit I have limited knowledge in the area of the Archer MSA's! My question is whether an employer can have a MSA and a FSA. In Publication 969 it specifically states that an employee who participates in a MSA cannot have another health insurance plan, other than the HDHP. Since the FSA is not listed in Publication 969 under the exceptions to "other health insurance", I feel that the FSA would qualify as another health insurance plan, making any employee who participates in the FSA, ineligible from participation in the MSA? While I certainly agree that they would want (and could) implement a Premium Only Plan for the premiums associated with the HDHP (if applicable) and a dependent care plan, I do not believe they could offer a FSA. Comments~

Does anyone have any actual experience with the DoL examining a plan that has not bought a fiduciary bond? What can the DoL do? What has the DoL done?

Profit sharing plan participant is in poor health. Plan participant was involved in lengthy divorce proceedings prior to health issue. Participant's atty-in-fact is afraid that hospital will attach plan benefits. In that regard, atty-in-fact and participant spouse (soon to be ex) have agreed to move $x out of the plan and into participant spouse's name to shield $x for the spouse and kids. Talk about issues...

From the plan administrator perspective, a QDRO would be helpful, but according to all involved there's no time to go that route. It appears that the PSP balance would be exempt from creditors. Thus the plan administrator's first option would be to just wait for a QDRO to be presented. The atty-in-fact and the ex-spouse to be offered the following.... Have the ex-spouse to be sign off on the appropriate waivers/consents, etc. Then the plan could distribute the $x to the atty-in-fact FBO the participant and let the atty-in-fact in turn transfer $x to the ex-spouse to be.

Clearly going the QDRO route would avoid the front-end tax to the participant on the initial distribution as well as provide maximum protection to the plan administrator. The drawbacks of the proposed scenario appear to be: 1) tax to the plan participant upon distribution 2) limited protection to the plan administrator re making the distribution (although the to be ex-spouse would have signed off on it) 3) turning assets exempt from creditors into assets available to creditors.

Anyone see anything else? Thanks for any suggestions...

Company X maintainis Plan M, a 401(k) plan providing matching contributions on elective deferrals and/or matching contributions. Employee A was participating in Plan M, making after-tax contributions and receiving matching contributions during 2001. During the beginning of 2002, A goes on short-term disability and is not able to have his/her contributions continue to Plan M. A returns to work in August, 2002. Although Plan M's procedures provide for the reinstatement of the contributio elections of employees on short-term disability or a leave of absence upon reemployment, A was not able to contribute to Plan M until January, 2003. The issue is, how can the plan make up for the missed after-tax contributions for the period of August through December, 2002?

In Rev. Proc. 2002-47, there is a deemed safe harbor correction method for eligible employees who are excluded from participation. However, none of the examples in the appendix to the Rev. Proc. address the appropriate method of correcting missed after-tax contributions. Therefore, anyone's thoughts on this matter would be sincerely appreciated.

I have a plan that is going to freeze accruals this year. They are currently using aggregate as their funding method, and we will change to unit credit once it's frozen. Since their assets, like everyone else's, tanked, they also want to go to a five-year smoothing method. Can I do both this year since both changes have automatic approvals?

In Jan a child of an employee became ineligible for coverage as a dependent due to age rules. At that time he was offered and accepted COBRA continuation. His premium payments were accepted for Jan, Feb, and Mar. During the month of March the HMO he was enrolled in called us to tell us that, because of the "live or work" rule, he will be terminated since he had moved outside their coverage area (this was discovered by a minor investigation of a claim).

My question is, do we have to offer any other coverage to him? We do have other plans that extend coverage to his new location that our employees can choose during open enrollment periods (July 1 each year).

Thans for any thoughts or direction.

Our self funded plan covers an employee and spouse. The spouse has COBRA through her former employer. The spouse's former employer states her claims are covered by them only as secondary since she is on COBRA and her husbands plan would be primary. Is this typical of COBRA, being secondary to other Plans or is this something tha would specially be indicated in their SPD?

We have a company (A) that has sold nearly all of its assets to another company (B). Company A has not been sold - the stock is still in place and their is still at least one person 'employed'. Company A has a Safe Harbor 401(k) Plan as does Company B. Company B is hiring many of the employees that are laid off by Company A.

1. Is this a plan termination?

2. There is a 2% surrender fee from Company A's current plan. Can either Company A, Company B or the new investment firm pay the surrender fees? If so, do they have to pay for all the participants?

3. If this is a plan termination - where can I find literature on the correct way to file with the IRS and what needs to be given to the participants?

Thanks for your help!

Owner A&B sell shares to esop and utilize 1042. Therefore they do not get allocation of shares released.

Owner C sells shares to esop under different transaction 5 years later and utilizes 1042. Therefore he does not get allocation of shares released.

Question #1-can owner A&B get allocation of shares from 2nd transaction because they did not partake in that specific transaction for 1042? Likewise can owner C get allocation of shares from 1st transaction? Basically i'm asking if one 1042 transaction prohibits the owner from receiving any shares from any release of shares? Also, what if ESOP puts in cash contribution once loans are paid off? Can all owners receive the cash contribution?

Thanks.

http://www.sciencedaily.com//releases/2003...30421084227.htm

Excerpt: " Could the gentle firefly turn out to be a potent weapon against cancer? In a new study, researchers from London inserted the firefly gene that activates bioluminescent light into modified cancer cells, hoping to set off a chain of events that has a proven track record at fighting the disease. This light source, known as Luciferin, caused the modified cancer cells to glow much like it does with the firefly. When a photosensitizing agent was added, the combination proved lethal."

I need some guidance on negative earnings when returning 401(k) and matching contributions to pass 415 test.

We have a DC pension plan and a 401(k) plan with matching contributions (all pre-tax money). Some participants exceeded $40,000 for the 2002 year test. To correct, (based on plan document), we plan to return 401(k) deferrals and forfeit the associated match. We expect the actual refund amount to be impacted by plan year earnings. The 401(k) deferrals will be reduced for negative earnings (i.e. $1,000 contribution and negative $150 earnings yields $850 refund). But is the matching contribution supposed to get impacted only by positive earnings, and ignore negative earnings? Does this seem right....both positive and negatie earnings for the 401(k), but only positive earnings for the match? What the proper way to count earnings to complete the refunds? Thanks for your thoughts.

If HR staff employed by a company with a self-funded plan assist employees with questions on their health plan claims, and the HR person needs PHI from the health plan, is a written authorization not required?

I have seen some interpretations that it is "health care operations" to share the info with HR and am wondering if I am missing something.

I am also assuming its a different situation if employee gets help from the TPA or insurer acting under ASO agreement - TPA/ASO can get PHI from self-funded plan pursuant to business associate agreement.

Any thoughts/comments appreciated....

a psp and db currently exist. if the dbpp is terminated and there is a trustee to trustee transfer do participants in the dbpp have to be poffered payiut options or can their monoies simply be transferred to the psp.

Does anyone know where a Basis Calculator for Coverdale ESA's may be found?

Can an employee work full time hours and sign some sort of waiver saying they do NOT want benefits? I have an employee now that is desperate for hours but we cannot afford to give her the fulltime hours and benefits...she begged me to let her work the hours and sign something saying she refused the benefits...anyone know if this is legal in the state of North Carolina?

A safe harbor plan is removing the safe harbor provisions as of the next plan year. Assuming the five-year requirement is met and no discretionary match provisions are available, is there any reason why the plan cannot use prior year testing method

I've seen threads about having two plans (a DB and a 401kPS) where there are no participants receiving employer contributions from both plans, but all participants eligible to defer. From what I've seen, the deductible limit would be limited to 25% of comp (combined plan limit). What if there were three plans (a DB, a deferral only 401k and a PS) with no common participants in the DB and PS?? How would that effect the deductible limit?? Thanks.

Employer allows employees to make elective deferrals to a 401(k) plan prior to becoming eligible.

I have read every post I have been able to come up with on this but I am still not certain of the correction.

I understand that the plan may be retroactively amended to change the eligiblity requirements. That is one correction.

I have read that it may be appropriate to return the deferrals to the participants (thank goodness there are no matching contributions to be concerned with). On the other hand, I have also read that you may not return the funds because there is no distributable event. If it is appropriate to return the funds to the employee, how is that reported on the 1099? Is an amended W-2 required?

I think the final option I have read about is to transfer the ineligible deferrals to the forfeiture account and have the employer make up the amount to the employee through their paycheck.

The plan document states that "If any person made Elective Deferrals erroneously, the Elective Deferrals and the associated earnings shall be distributed to that individual in the Plan Year in which the discovery was made. Alternatively, the Employer may determine if an alternative correction method may be avaiable and use said method to make the correction."

I suppose it is obvious that we should follow the plan document, but I guess I just need reassurance that the money may be distributed to the participants, and how to report such distribtuion.

Thank you.

Does anyone know of a plan design whereby a governmental employee can take the value of unused vacation and sick pay to pay for their health insurance premiums? Can this be done on a pre-tax basis. Thanks -