Forgive me for I'm still new at this medical stuff..

I have a client, Company A, that has another company, Company B, pulled into their medical plan as a sister company in order to obtain the reduced premium rates. The two companies share common ownership but there is no controlling interest on the part of any 3 owners thus no controlled group environment

If Company A sponsers a section 125 plan can they allow the employees from Company B to particpate even though there is no controlled group relationship? Do they by default?

Now, assuming they are not part of Company A's 125 plan, if Company B has been taking out the premiums to pay the medical premiums pre-tax and there is no governing 125 plan...what do they do?

Let me start this thread off by saying that the company I work for does TH testing differently than most, in the aspect that we determine if your plan will be TH in the next plan year. (i.e. We are now completing 1/1/02 - 12/31/02 compliance testing, so our TH determination date is 12/31/02, to see if they will be TH for the 1/1/2003 - 12/31/2003 year.

Scenario:

An individual was a Key EE for the 1/1/02 - 12/31/02 TH period. However, that Key EE is no longer a Key for the period we are getting set to test (1/1/03 - 12/31/03).

Question:

How will that person be treated for the TH test. They are still employed, but just not Key.

I probably realize this was probably as clear as mud, so any additional information needed, let me know. Thanks.

Hello -

We have a 401(k) plan that allows for hardship withdrawals, using the facts and circumstnaces of the individual to determine whether an immediate and heavy financial need exists (non-safe harbor). We have a situation where an employee has asked for a hardship withdrawal to pay for the nursing home expenses of a parent. It appears that the parent is not a dependant of the employee. We're trying to decide whether this would be an appropriate situation to grant a hardship distribution. I realize this is a highly factual determination, but I was hoping to find at least one article that suggested that such a use could be made. Unfortunately, I have not been able to find anything suggesting a hardship withdrawal could be issued to pay for nursing home expenses of a parent. Anyone have any suggestions/ideas? Thanks!

I'm doing another one of my stress-inducing modifications to a report...I'm trying to get an existing report to sort by division and then to print the division name at the top of each group. I tried copying a Relius report sorted by division in how it was sorted and defined for divisions, but mine keeps bombing out. Can anyone tell me what tables I need and what variable I should be using to print the entire division name at the top of each page? I didn't think this would be that hard...any help is greatly appreciated........Patti

When a plan fails the healthcare concentration test how do you report the excess contributions made by the HCE? I know with a retirement plan a 1099 R is used but I am not having any luck finding out what reporting mechanism is used for FSA testing failure.

Any help will be greatly appreciated!

Employer invites a local insurance agent to his business to sell his employees "supplemental policies" (such as accident, short-term disability, cancer policy, and life). Employer will pay none of the premiums. Employees will pay all the premium via payroll withholding. The employer's only involvement is witholding the monthly premims from employees' paychecks "PRE-TAX" and then mailing the premium to the insurance company.

MY QUESTION:

Are these ERISA plans ?

Doesn't the "pre-tax" aspect (as opposed to after-tax) make these plans ... ERISA plans (even though the employer's involvement is very limited) ?

Can an owner, who no longer works for the company but is receiving W-2 wages, take a distribution from his 401(k) account? I was under the assumption that if an employee received W-2 wages from a company, regardless if they actually work or not, that they are still considered "employed" thus cannot satisfy the requirements for a distribution.

Thanks!

Fiscal year plan, subject to pre-EGTRRA limits. Owners contributions exceed 415 limits. NHCE 415 limits not exceeded. Overall 404 deduction limit is not exceeded.

Can the company take a deduction for the entire contribution amount even if the 415 excesses cannot be allocated for PYE 2002?

If so, by what authority?

Am I correct that premiums on group term life insurance over $50,000 that have been waived because of the insured's disability is not taxable income?

Perhaps those of you who deal with annuities more than I do can offer some guidance.

A spouse inherits her husbands IRA annuity and decides to roll it over to her own IRA. The insurance co. says that she can roll over the value as of the date of death, but she cannot rollover the "stepped up" death benefit.

What is a "stepped up" death benefit?

A plan indicates that a participant must apply for retirement before he is deemed retired. Also, the plan does not provide for retroactive payments (so can't elect a retirement date prior to the application date).

A participant is born before 1917 (so minimum distribution rules don't apply?), works until age 90 and applies for retirement at age 100. His benefit is actuarially increased to account for the missed payments. Do the code or regs (please cite if possible) require that payments be made retroactive from the separation of service date despite all that I've mentioned? What if the participant separated from service prior to normal retirement age and didn't come forward until age 100?

Thanks in advance.

Scenario:

EE fails 402g and is a HCE, but not age 50. Failure amount of the 402g is $2041.40. We run ADP testing, we test his deferrals of $13041.40 in the ADP, as we are suppose to keep that amount in the test for a HCE. The plan fails ADP testing, and he is the only failure required. The ADP failure amount is $1733.82.

Question:

When we refund his 402g failure of $2041.40, wouldn't this satisfy the amount of the ADP failure as well. Thus, the only amount he is going to receive would be the $2041.40?

Can anyone give me a reference that defines disabled employee for purposes of continuing health coverage?

I understand large group health plans that cover employers who have at least 100 employees must cover disabled employees.

Thanks

I'm seeking any comments about any general issues that may have occurred concerning the implementation of an/or compliance with the SOA. I'd like to know if there are any known pitfalls or positives out there. Any input at all would be appreciated.

Would a $45,000 legal expense to fund an inquiry into a plan's performance and practices -- whether all transfers, etc. were signed by the appropriate number of board members -- be a reasonable expense?

If excess deferrals are corrected and refunded prior to the end of the 12-31-2002 (PYE coincides with individual fiscal years), would they be included in the ADP, avg benefits or 415 tests for 2002? My logic, although I cannot recall where I heard or read anything to support it, is telling me no, but I wanted to bounce this off anyone else who thinks otherwise.

thanks

I have a strong enough believe in God that the sad and tragic events involving the shuttle are only a reminder how fragile life really is. But God has a pension plan with benefits that are out of this world.

During my ride home from work, Woodie Guthrie's song about the mighty Columbia river kept running through my mind, and how appropriate, may the Columbia forever roll on in our hearts and minds.

Songs make an easy way to remember things, and so the names of the astronauts can be written into that song:

The names of our heroes will always live on

We'll not forget them although they are gone

Husband, McCool, Anderson, Brown

Chawla and Clarke and Ramon

Roll on Columbia Roll on

Roll on Columbia Roll on

Lest we ever forget that dark tragic morn

so roll on Columbia roll on

The shuttle was flying America's best

The challenge of space -it puts us to the test

Somehow we know, their souls are at rest

Its roll on Columbia roll on

If an employer adopts a Simple plan in August, is the match calculated based on earnings for the entire year, or just for earnings on the wages since adopted? Thanks!

Apparently, our College of Medicine Student Assembly has formed a VEBA. The purpose of the VEBA, as I understand it, is for the COM students to have COBRA coverage upon graduation or completion of their fellowship or doctoral studies. The insurance carrier would not offer COBRA through the health plan without a VEBA, since as a state institution we are not subject to ERISA. The students are broken down into three groups - (1) the MD student in the four years of medical schoot, (2) Physican's Assistant students, and (3) Post-doc fellows and PhD students. Groups 1 and 2 have no employment relationship with the University; they are purely students. Group 3, the post-doc fellows and PhD students are employees of the University. The VEBA offers current health insurance coverage, with Groups 1 and 2 paying premiums personally to the VEBA and the premiums for Group 3 being paid by the Univeristy to the VEBA. Form 5500 is being filed by the administrator (an insurance agency).

Two questions:

1. Is filing Form 1024 to gain a 501©(9) exemption necessary for a VEBA that functions merely a pass-through for premiums and does not accumulate assets to pay benefits? In other words, is the 501©(9) exemption necessary (or desirable)?

2. May the VEBA cover Groups 1 and 2?

3. If the answer to 2 is No, then what is the consequence of providing such coverage?

Thanks,

Ken Davis

Univ. of South Alabama

I've got a P.A. client where 2 of the 4 trustees on the P.A.'s PSP and MPPP refuse to sign the amended and restated documents until I show/tell them 1) who/what/why required the plan doc's to be amended and restated and 2) all of the changes required by GUST/EGTRAA. Any idea where I can find IRS language which explicitly states that if plans aren't amended for GUST/EGTRRA by the deadline, then disqualifiaction will result as well as an easily accessible list of the changes brought about by GUST and EGTRRA?? Would any of the IRS rev. proc.'s re restatement have any such disqualification language in them? Also, would the IRS' List of Required Modifications provide what I need? Thanks for the help.