We currently pay 100% of employee's health care premiums. We want to provide an opt-out incentive (money into Flex Acct.) to our employees.

I have seen opt-out programs when the employee pays a portion of the premium. What about when the employer pays 100%?

Can anyone provide me with information on 401(k) loan repayments. The focus is on repaying loan on after taxe money.

Would a registration fee to put an infant on a waiting list be reimbursable under the Dependent Care Account?

I have the same question that someone had a year ago that was never answered - are these 419 plans legitimate? I have a client who has been told they can deduct large sums of money put away for specific employees only. The sales brochures all say it is legit (along with an attorney's letter saying they will defend you to the IRS), but does anyone have a more objective opinion?

I hope I am correct in assuming the following:

My 401K has both after-tax contributions and pre-tax. After I leave the company, I can elect to rollover my pre-tax to an IRA, and have a separate check sent to me for the after-tax contributions. The after-tax check is free and clear of any tax liabilities, and also does not need to be reported on any tax forms, such as 8606, and 1040. This is what my company has told me, but I want to be 100% sure. This would make more sense to me, than rolling over the after-tax money into an IRA.

Any thoughts would be greatly appreciated.

The RMD regulations state that is a trust is the beneficiary of the IRA, the spouse cannot be treated as the beneficiary of the IRA, even if s/he is the only beneficiary of the trust.

Yet, the code talks about assigning rights, and seems to suggest that is the trust beneficiary assign the right to an individual, the individual will be treated as the beneficiary. Does this means that the individual will be able to move the assets into an inherited IRA in their name and tax ID number?

The RMD regulations state that is a trust is the beneficiary of the IRA, the spouse cannot be treated as the beneficiary of the IRA, even if s/he is the only beneficiary of the trust.

Yet, the code talks about assigning rights, and seems to suggest that is the trust beneficiary assign the right to an individual, the individual will be treated as the beneficiary. Does this means that the individual will be able to move the assets into an inherited IRA in their name and tax ID number?

I'd like to know how others handle changes to allocation groups.

For example, if an allocation group includes all officers, and someone becomes an officer mid-year, would the person be in the officer group for all of the year, none of the year, or would an apportionment be made?

Our (volume submitter) documents don't explicitly say. Does Corbel's specify a determination date? How do others handle mid year changes?

I believe that health plans administered under section 105 are subject to COBRA. How is this facilitated? Does the employer bill the employee for the contribution plus the 2%?

Is anyone aware of a notice to participants requirement that arises when a plan sponsor fails to make a quarterly contribution? I am aware of the requirement under ERISA Section 4011, but I have a client who is absolutely convinced that we need to give notice to all participants within 60 days of the missed contribution (which means June 15), and I cannot find that requirement anywhere!

Thanks for your help.

An owner wants to add a 401(k) feature to his new comparability plan to take advantage of the catch-up contributions, and maximize his annual contribution. The owner does not want to add a safe harbor provision solely because of its immediate vesting. Can we set the 401(k) deferral limit in the plan document at a relatively low 3% of comp and still take advantage of the catch-up contribution provisions. At 3% the we do not anticipate a problem with ADP testing.

I have obtained a large amount of survey data from organizations on rising health care costs. We are a small TPA for partially self funded medical plans that use PPO networks and more clients are asking about rising costs. The average prediction for 2002 seems to be 13% - 15% however the majority of our clients medical claims costs seem to be above that from 2001. We incorporate UCR, out-of-network claims re-pricing and use the best PPO networks available. While we have illustrated potential savings with benefit design changes such as higher co-pays, deductibles, and coinsurance and increasing payroll deductions, costs continue to escalate and reinsurance carriers are requiring higher specific deductibles and more lasering. We are thinking about incoporating a disease management program but again these are not necessarily going to decrease the costs. Does anyone have any suggestions on how to explain to employers when their is no particular reason that their costs are higher than the average predictions? Most of these surveys also don't indicate if they are premium costs or claims costs or a combination. Any guidance is appreciated.

i have profit sharing plan that includes life insurance benefits. We have reported PS 58 costs every year.

At the participant's death the spouse has elected to rollover the plan benefits to her own rollover IRA account.

I believe the net insurance value, the differance between the death benefit and the cash value, should not (cannot) be rolled over nor is it subject to income tax or withholding.

I know I am looking right by it but, unfortunately I can't find the cite to make me comfortable. Am I correct?

Thanks for your feed back

ED

If a calendar year plan's document does not reference 401(a)(17) and the EGTRRA provisions as they relate the the compensation limit increases are not adopted, what is the compensation limit for 2002, $170,000 or $180,000?

Does anyone know where I can purchase a 403b video that can be used in front of an employer group? It would be used as part of the enrollment process for new entrants in the plan.

We are significantly redesigning our calendar year health plan effective 10/1/2002 (don't tell me; I've already suggested waiting until 1/1!)

We are eliminating all of our HMO's (50% of our workforce participate in these) and also

eliminating our POS and indemnity options. We will be going to 1 national PPO plan with single

and family coverage.

There will be greater employee cost sharing as well

My question has to do with our 125 plan.

We are allowing employees to opt out of coverage or to keep thier current coverage. Must we

allow them to go to single if they currently have married coverage? I assume that they can't go

from single to married snce that will cost more?

Also, what would a significant increase in cost be %wise? 20%?

I understand that they cannot change their health FSA election prior to next year's open

enrollment (1/1/2003)

Any insights into this would be greatly appreciated along with very good reasons to wait until 1/1/2003 to implement the new plan.

We are significantly redesigning our calendar year health plan effective

10/1/2002 (don't tell me; I've already suggested waiting until 1/1!)

We are eliminating all of our HMO's (50% of our workforce participate in these) and also eliminating our POS and indemnity options. We will be going to 1 national PPO plan with single and family coverage.

There will be greater employee cost sharing as well

question has to do with our 125 plan.

We are allowing employees to opt out of coverage or to keep thier current coverage. Must we allow them to go to single if they currently have married coverage? I assume that they can't go from single to married snce that will cost more?

Also, what would a significant increase in cost be %wise? 20%?

I understand that they cannot change thier health FSA election priro to next year's open enrollment (1/1/2003)

Any insights into this would be greatly appreciated along with very good reasons to wait until 1/1/2003 to implement the new plan.

I tried posting this under Retirement Plans, but maybe this is the better place to post the question --

Does HIPAA apply to 401(h) medical accounts of a qualified retirement plan?

I have an integrated money purchase pension plan and a non-integrated profit sharing plan. We are merging the MP into the Profit Sharing. Will we need to continue to integrate the allocation that is the money purchase contribution? My boss says we will need to maintain the integration.

Marybeth

My understanding is that USERRA prohibits discrimination against employees because of membership in the uniformed services, however, the employees are not allowed to make greater contributions than they could have made if they had not left at all. Thus, a USERRA eligible employee is limited, I think, by the Plan's, as well as the Code's, limits. So, I think we need to ask two questions: 1) When would the employee have been able to change his deferral rate; and 2) By how much, within the Plan's, as well as the Code's, limits.

I would appreciate any sites/guidance people may be able to provide on the subject. I worked up the following examples and answers for comment.

EXAMPLE 1

If a person was on leave for military service and was deferring 4% of pay when they left, they served for 12 months during which their salary would have been $40,000. The make up amounts they can add to new contributions upon return is $1,600. And if the company matches 100% up to 6% then they need to match the $1,600 as it is made.

Or, can the participant claim they want to make up 6% as military catch up and receive the full 6% in match in addition to any match due on current contributions.

Answer 1

If their Plan was a calendar year Plan that permitted deferral rate changes only annually on 1/1, and they left for service on 1/2, they may be limited to 4% upon returning. Note, if they were gone for two years, they could increase to 6% for the second year when they returned, because, but for their military service, they would have been able to do so.

On the other hand, if their Plan was a calendar year Plan that permitted deferral rate changes each calendar quarter, they could indeed make 6% as military catch up and receive the full 6% in match in addition to any match due on current contributions for the first, as well as the second, year of their eligible service.

EXAMPLE 2

If the leave extends over calendar year how does the catch up work?

For example,

Jan - Nov - works and defers 6% or $2,200 on his salary of 11 months in 2002. Leaves for service end of November 2002 returns the following November in 2003. Does he have the right to make only the 6% or can he make up $8,800 for calendar year 2002 and another $12,000 for calendar 2003 during the 36 month repayment period?

ANSWER 2

If their Plan was a calendar year Plan that permitted deferral rate changes only annually on 1/1, or was a calendar year Plan that permitted deferral rate changes each calendar quarter, then they may be limited 6% for the months of November and December 2002, plus $12,000 for calendar 2003, during the 36 month repayment period.