I've been reading some about health reimbursement arrangements, or HRAs, and for the life of me, I can't figure out how an HRA might help my company and our employees.

As with the majority, our company is seeing severely escalating health care costs, and there are shouts being heard from the head offices to find solutions. Does anyone understand HRAs sufficiently to know if they might provide some level of help? We have a self-insured, unfunded health plan, with BCBS as the TPA. We also have a fully employee-funded health care flexible spending account.

I've found volumes of information about HRAs, but nothing about the strategy of their use? Is there a source you know of that can help me with that?

Thanks in advance.

A calendar year profit sharing plan has eligibilty requirements of 21/1, with entry on the 1/1 of the year in which the requirements are met. Client wants to amend the entry date to be the 1/1 (or 7/1) following 21/1. An employee was hired 10/18/2001. If the amendment isn't adopted by 10/18/2002 clearly she will enter under the old rules. What if the amendment is adopted before she has completed one year of employment? Can she be kept out until 1/1/03?

Our client Buyer just purchsed (stock sale) a company (Seller) who already amended their plan to allow for catch-ups. Buyer does not want to allow for catch-ups and none of their other Buyer plans (into which the newly-acquired Seller employees will be transferred) allow for catch-ups. Buyer and Seller are now a controlled group and it is my unerstanding that Buyer has until October to allow for catch-ups in all their plans since they are allowed in Seller's plan. Buyer wants to simply amend out the catch-up provision from Seller's plan before October. Does anyone see any problems with this, assuming some participants may already have reached their 402(g) limit for 2002 and are activley deferring the catch-up? When should we make the amendment effective? October 1 or December 31?

We have a cafeteria plan sponsor that wants to include "domestic partners", both same sex and opposite sex, as eligible for coverage.

We have read the definition of dependent in 152 and it seems like a domestic partner could satisfy 152(a)(9) if he or she lives with the taxpayer and is a member of his or her household. I'm not sure how 152(B)(5) figures into the equation, however. Are such relationships in violation of local law?

Has anyone else encountered this situation?

Participant wants to designate kids from a prior marriage as beneficiaries of his account in a MPPP, however, spouse most likely will not consent. A suggested alternative is to freeze the MPPP and set up a SEP-IRA. Since SEP-IRA's are not subject to the survivor annuity rules, the participant could designate his kids without needing spouse's consent. Clearly, there are marked differences (eg, vesting, etc...) b/t a SEP-IRA arrangement and the MPPP..... Suggestions??

:confused: How is the eligibility test for a POP only performed and who counts in the test when not all employees may be eligible for Group Health benefits (the only benefit offered under the POP)? For example, an employer (an LLC taxed as a partnership) with 50 employees wishes to establish a POP plan. The only benefit available is Group Health. Eligibility for the Group Health plan is only available for employees who normally work more than 30 hours per week, and entry is then 90 days after hire date. LLC Members are not eligible becauase they are considered self-employed.

If the POP plan's eligiblity is the same as the Group Health benefits (i.e. must be scheduled to work at least 30 hours/week, then entry 90 days after hire date) how are employees who normally work less than 30 hours/week treated in the eligiblity test? Do we treat LLC members as eligible or as excluded employees for this test?

The root of my confusion is this...do we only count employees in the eligiblity test who are actually eligible for the health benefits (and therefore can run premuims through on a pre-tax basis) or do we count all employees for the test, even those who normally work less than 30 hours/week? If employees will never be eligible for the Group Health plan because they never work more than 30 hours/week can we treat them as excludable employees for purposes of the eligiblity test? And finally, how does the 3-year rule for participation affect all of this?

We're trying to decide the accounting method that we're going to us regarding cashless stock option exercises. Currently, when an optionee exercises an option, we use the fair market value of the stock as of the end of the business day. This can cause some problems because if the stock is volitile, then the close price can be significantly greater or lesser than the actual sale price.

What seems to the the predominate way that companies are showing the gain on the W2s? The IRS doesn't seem to have proper guidelines. The only item I could find of relevance was Rev Proc 2002-50.

I'm hoping you can help provide some guidance with a distribution due to death. Both the participant and primary beneficiary have passed away. The secondary beneficiary is divided equally between two individuals. Only one of the indivdiduals has responded to the withdrawal request. Is there any reason we could not pay 1/2 the account balance today to this beneficiary? Or do we need to wait until the other beneficiary makes an election as well?

Thanks!

I am completing my first SAR under the new small plan disclosure rules (plan year began after 4/17/2001). The instructions state that you must include the name of each regulated financial institution holding or issuing qualifying plan assets and the amount of such assets. The plan has numerous mutual funds issued by 6 mutual fund providers (Fidelity, Janus etc.). All the assets are held in a trust account with a local financial institution. How should this be disclosed?

Should each fund provider be listed once, with the total of all of their funds reported as one figure? Does the financial institution have to be listed if none of the assets are issued by it? I can see where to enter the information in the Relius program, but am unsure how to enter it.

I apologize if this subject has appeared here previously. With attention given to the restatement process, it has been quite a while since I last visited the message boards. Any guidance will be appreciated.

For jaemmons or someone else that would like to response.

What if the plan excludes union employees? The fact that there is no good-faith bargaining agreement still applies?

We have an employer who matches 401(k) for NHCEs & NonKeys only. The plan is Top-Heavy for 2001.

Because no ACP Test is necessary, I am wondering if the Top Heavy Minimum may be met with the Match. (Everyone's Match is in excess of 3% of comp).

Can employees, members of a union, participate in their employer's profit sharing/401(k) plan? There is no collective bargaining agreement between the employer and these union members. Any advice will be helpful. Thanks.

Can a governmental DB Plan elect to be covered by the PBGC? This is a to-be-established DB plan that, though the sponsor is govermental, wants to "elect" into ERISA coverage and wants to be covered by the PBGC. Can this be done? Thanks for any comments.

I always have such a hard time adjudicating claims associated with breast pumps and breastfeeding expenses. I know the IRS will only reimburse the expense of a pump if it's medically necessary for the health of the baby, but I have a claim requesting reimbursement for the monthly rental rate of the pump, not the pump itself. Should I decline the claim and request the employee get a written statement from their physician which indicates the pump is medically necessary for the well-being of the infant? In addition, this employee is also seeking reimbursement for a breastfeeding consult. Again, I believe I would need something from the physician stating the consult was necessary. Does anyone know of any particular rule or reg that makes adjudicating these types of claims easier?

I appreciate any and all feedback. Thanks so much.

Does ERISA or the IRS prevent the sponsor of a leveraged ESOP from also assuming the role of trustee? This allows the sponsor/employer somewhat more control of the trust accounting, recordkeeping, etc. and save on costs. The company would continue to have an annual appraisal conducted by and independent valuation firm.

How are self directed brokerage account balances reported on the Schedule H? Should I breakout ltd. partnerships, money market and cash accounts and then combine the monies in the registered investment companies with the other assets which are held at ING?

We have a company that has been late with many of their ee deferrals. We have determined the amounts they need to pay for gains that would have been accrued had the amounts gone in when they were supposed to. My question is whether or not they can use money from the forfeiture account to pay this expense? Thanks for the thoughts!

Do I have the right to transfer my vested 403b (Church) money to a 403b account at a mutual fund family outside the four families that are currently part of the plan?

Thank you,

Eric

Can new benefits be added to a Sec 125 plan during the plan year even if similar benefits are already being offered under the plan? I am particularly interested in how this relates to non-core benefits (vision, voluntary health or disability coverages, etc.). If the new benefits can be added on a pre-tax basis, can employees already participating in the similar benefit change to the new benefit if the new benefit is deemed to be a significant improvement in coverage or significant decrease in cost? Thanks!

I am 591/2 and have a small amount in an ira under 5,ooo. that i have had for 10 years can i take it all or must i take monthly payments?