I have a client who is wondering if they can claim their hearing implant surgery through their medical reimbursement account. They will be having a hearing device surgically implanted in their ear.

The insurance as of right now does not cover the expense because it is a new surgery.

I was wondering if it could be reimbursed??

Since it is not really considered cosmetic, just like the laser surgery still isn't considered cosmetic either, I wasn't sure if it could be covered. Because the laser eye surgery is usually not covered by insurance carriers either but yet is still, as I know of, reimbursable through a fsa.

I have a new client that failed coverage in their ESOP for the plan year ended 9/30/01 under both the ratio and average benefits test. They have a 1,000 hour and last day requirement and they had high turnover this year. We are going to plan on bringing in four people under the fail-safe provisions to pass coverage.

When I review EPCRS for the correction method and which part of the program it should be submitted under it is listed as a demographic error. I agree that it is a demographic error but it seems that this would have to be submitted under the general VCP Program since it is not an operational error. I'm trying to find a way to submit under one of the other programs since the fees under the general VCP are higher than the others.

Any thoughts?

I am embarrassed to be asking this question at this point, but we really lucked out on our 5500s. Either the Cafeteria Plans were so small that their components didn't matter, or the plans had specific welfare benefit components for which we completed Schedule A's, etc.

Now I am on my last 5500, and we have a big plan with a Cafeteria Plan that provides dependent care and health care reimbursement.

My question: Is the health care reimbursement considered an underlying welfare benefit component?

It's just your straightforward no-frills reimbursement account. you defer, you submit receipts, you get reimbursed til the money runs out.

As participants in a 401(k) plan can defer the maximum percentage up to the IRS limits per the plan document, how would the following be handled? The participant elected to defer 100% of compensation (earning less than $11,000-won't actually be able to defer 100% as FICA and Medicare taxes are applicable). However, that individual is also participating in a cafeteria plan and having premiums to cover health insurance deducted from his paycheck. He may also have Friend of the Court child support payments coming out of his check. Compensation as defined by the document is W-2 compensation with adjustments for 125, 401(k). My question really is : Which comes first? One guess is that the FICA and Medicare comes first, then the court ordered child support payments, then the cafeteria plan comes next with anything remainning taken as a 401(k) deferral. However, this just doesn't "feel" right........

How is everyone else dealing with situations similar to this?

Any thought would be appreciated.

Thanks,

Diane

Employer made a 10% MPPP contribution for each of his plan's four participants (for plan year 2001)..... and then employer realized that the wrong amount of "eligible wages" was used for one of the employees.

The employee's "salary for entire year 2001" was $50,000 ....so the employer made a $5,000 [50,000 x 10%] for him. However, this employee did not enter the plan until 07/01/01. His salary during the period 07/01/01 - 12/31/01 was only $30,000. Therefore, only $3,000 should have been contributed for him.

$5,000 is presently sitting in the employee's MPPP investment account ..... but $2,000 of it was contributed in error.

How can the employer correct this ? Can employer simply order the financial instituition where the investments are held to take $2,000 form this employee's account and return it to the employer?

can an employer with only 2 employees, each an hce (partners), have a sep or ps plan and take different allocations? i.e. one partner wants to take a 25% of his compensation contribution and the other only wants 10% of his compensation. does anyone see a problem with this since there are no nhce's?

Could someone clarify for me the Exemption from User Fee for Determination letters.

I have an individually designed age weighted p/s plan that was initially effective 7/1/1982, but was restated as an age weighted plan effective 1/1/91 at which time a submission for Determination was filed and a approval letter was issued.

This plan has less than 10 employees, 8 of which are NCHE.

Am I reading 1.414.(s)-1(d)(3)(vi) and 1.414(s)-1(f)(1) correctly - you cannot use a compensation definition that includes prior-employer compensation in a defined contribution plan, only a defined benefit plan? And if so, what's the logic?

Parent Company A has 2 subsidiaries that each sponsor their own pension plan (410(B) coverage is satisfied). Sub B's plan merges into Sub C's plan in 2002. Each plan has a 5-year cliff vesting schedule. However, Sub B's plan states that NRA is 65 and ERA is 55 & 10 YOS and Sub C's plan states that NRA is 62 and ERA is 55 & 15 YOS. After the merger, each group's benefit will continue to be maintained separately (under the terms of each plan prior to the merger). The question is, can we maintain, in essence, 2 different vesting schedules, one for each group?

A doctor uses only leased employees. Can he utilize a solo 401(k)?

Hi,

Thanks for the great job of this website, i feel its quite helpful especially for people who are in real trouble.My trouble is iam on dependent health insurance of my husbands , iam pregnant and i was going for my prenatal visits, my husband developed ear problem and he had to visit ENT, the insurance feels its a preexisting problem and they stopped paying both our claims,rite now ian apprehended to go for my prenatal visit,because i already have huge bills waiting for me,what i heard from other sources is my insurance and my husbands insurance are totally different they cant stop paynig my claims because of my husbands problem, even though pregnancy is covered in the insurance .Plz help me what should i do now,infact the insurance people are still investigating into the problem since past 2 mths but iam getting impatient everytime i visit for my prenatal visit,should i change my insurance or wait for them to get back or iam i legally correct to take an action against them.Any answer to my problem is appreciated.By the way its a group insurance from my husbands company.

Does anyone have experience where an employer has already received a closing agreement under Walk-in CAP, then about a year later, the employer finds new errors? What result? Does the IRS permit a shorter application, a small fee to provide info on new errors discovered (with only an incremental sanction), etc.?

One of my clients has a retired participant who is required to take a RMD from the plan. He says he has an IRA account as well, and can take a RMD from that and it will cover both the IRA and the RMD. I cannot find anything to support this theory. In the new regs from April 2002, it says that RMDs must be calculated for each IRA seperately. While the answer to this question dealt only with IRAs, could we perform the manual calculation for teh 401(k) RMD and give the amount to him, so he could take the actual distribuiton from his IRA (along with the RMD for that account)?

Or is this this guy pulling my leg?

Hopefully this is not to dumb a questions.

Is an Age Weighted Profit Sharing Plan subject to ACP testing?

I have never run the ACP test on this plan before, but in amending the document that is one of the questions.

Thanks

mb

What have others in the non-healthcare arena been doing as far as designating a Privacy Officer for your firm? Has it been a head of HR, head of Benefits, Legal or otherwise?

Have been dealing with an awful lot of COBRA questions lately....

I need some help recalling what I think is correct in this situation. An employer provides benefits to its employees through the purchase of several group health insurance policies. Due to layoffs, there are no longer any current employees covered under one of the policies, just terminated employees who want coverage. Employer wants them to continue COBRA through this policy. Insurance company says "no" because minimum participation by active employees is not met, therefore the policy is cancelled. Shouldn't the terminated employees be receiving COBRA through any of the policies that are still in effect?

Under HIPAA, what is the difference between a business associate and a trading partner?

Last fall some of you participated in an interesting discussion re: a plan purchasing privately held stock from a plan participant/company shareholder. See link:

http://benefitslink.com/boards/index.php?showtopic=16557

My question is, would you reach the same conclusion (i.e., transaction is permissible provided independent valuation of stock is performed), if the shareholders want to use the stock to pay off participant loans?

Shareholders are S-corp shareholders and loans are post-EGTRRA.

Under Notice 2002-4, a "severance from employment" is deemed to occur when a target company is acquired, in a stock purchase, from its parent company if the plan stays with the selling group - notwithstanding the fact that the employees involved remain employed by the same legal entity. The rationale is that the target company doesn't "maintain" the plan after the closing.

Does anyone have any thoughts on what happens when a comapny is acquired from its individual shareholders (no corporate parent is involved) in a stock purchase transaction? If corporate action is taken to terminate the target plan prior to the closing date, does the corporation continue to "maintain" the plan after the closing date if it has been terminated and all that remains to be done is to process distributions following the receipt of a favorable determination letter?

Two years ago, prior to my coming to my firm, my client merged a union life insurance policy into the larger salaried policy to save a buck. Now, no one can provide me with the information to file the 5500's for each plan. Did we effectively terminate the union plan? Should we file best guess estimates for this year and segregate the policies again? Any ideas on how to handle this? Oh yes, and did I mention that a 5500 for the union was not filed last year. Their data was commingled with the salaried group.