My company (approximately 4,000 ees nationwide) is finally thinking about creating a healthcare strategy for the future. One possibility we are exploring is a standalone prescription plan. At present, our mail order program (for participants in our self-insured POS) is with one vendor and our retail program is with a different PBM through our TPA (an insurance carrier). We are also considering carving the prescriptions out of our 15+ HMO plans (about 50% of our employees are enrolled in HMOs) so it seemed natural to create a standalone plan. By having one vendor we would finally gain some control over the formularies, dispensing fees, co-payments (and/or co-insurance if we make that move), etc.

However we are having second thoughts now simply due to economics. If both the mail order and retail programs were serviced by the PBM of the TPA as part of our POS, would it make more sense than creating a standalone since the TPA undoubtedly has greater price leveraging power than us alone? I am just wondering if anyone else has experienced this issue and what the results were. Thanks.

Can a participant in an ineligible 457 plan have concurrent substantial risks of forfeiture? I understand what rolling risks are, and I am not referring to this. I am not able to locate anything regarding having more than one substantial risk at time. Each substantial risk is valid, and has a different lapse time period.

Thanks,

RIK

a plan makes an amendment to the early ret factors. the age 55 factor is changed at 1/1/95 from 0.5 to 0.3.

a person retires on 1/1/02.

the plan makes no specific provision for protecting the old subsidy.

at retirement the plan compares the 1/1/95 accd ben with a erf of 0.5 v. the 1/1/02 accd ben w/ a erf of 0.3. it turns out that the 1/1/02 accd ben w/ an erf of 0.3 is the larger one. and thus the plan says that the old benefit was preserved.

the question is that w/ no specific provision as to how to handle the protected benefit is it reasonable to use their technique or s/ the benefit be the 1/1/95 accd ben reduced at 0.5 plus the accrual after 1/1/95 (1/1/02 accd ben less 1/1/95 accd ben, thus giving the same total accd ben at 1/1/02) using the 0.3 factor. clearly this would produce the largest benefit, but the plan was silent as to how to handle this. any comments?

gary

Consider this. We've got a client that employs HCEs only (physicians). They've currently got a PSP and they contribute the max each year. We are restating their plan to include a CODA to take advantage of the catch-up amounts, but they do not intend to contribute any funds by salary deferral. They will continue to hit the 415 limit with employer contributions each year,thus hitting the 415 limit as of the last day of the limitation year (as required under the proposed regs), so deferrals will only be $1,000 for each eligible over 50 participants. Any comments?

May I please get the opinions of people on this board who do general testing about the use or non-use of 417(e)-generated lump sum values on the Most Valuable Accrual Rate.

Half the people I've spoken to ignore lump sum values artificially inflated by low 417(e)-based interest rates. The other half do reflect those values in the calculations.

Last October at the ASPA national conference I sat in on two back to back sessions on DB general testing mechanics. One said no (Larry Deutsch) and the other said yes (Carol Sears). Both would reflect a fixed rate but they had opposite opinions on 417(e) "market" rates.

Opinions please. Thanks.

EGTRRA and Gust amendments for non-calendar plans, can the effective date be as 1-1-02 or does it have to be as of 4-1-02 for a 3-31-02 plan?

In previous Quantech upgrades we were required to run a script to update our DERs for the new version. After looking through the installation procedures for RA7.0 I don't see any reference for this. Have they integrated the DER update into the main DB script process or did they just forget to mention it.

Thanks.

I have been researching average eligibility enrollment date information for health and welfare benefits with limited success. Currently our benefits are effective the 1st of the month coincident with, or following, date of hire. There has been a request to change this wait period to effective upon hire. Does anyone know of an average wait time for benefit eligibility?

If a divorce decree indicates that the father is to cover the children with medical insurance and a later court orders that the mother cover the children with medical coverage, does this constitute a "change of status" so the mother's cafeteria plan can allow for the change:

This seems like a simple question. Does anyone know if it is possible to speak with the IRS either in person or on the phone, pertaining to difficult questions, such as the one I posted earlier on IRA to Roth conversions of after-tax contributions? I have e-mailed them, but it is not the same. The question is too involved. I searched the IRS web site, but there does not seem to be a direction in direct contact. Any suggestions are appreciated.

My employer has a group health, dental and vision plan which the premium is paid in full by the employer for each employee. If the employee elects dependent coverage the employee must pay the full dependent premium but it is paid on a pre-tax basis. We also have a section 125 plan with flexible spending accounts. Our AFLAC policies are paid by the employee but on a pre-tax basis also. We have group LTD and STD paid in full by the employer. My questions is, when completing the form 5500 do we have a welfare and fringe benefit plan or do we just have a fringe benefit plan?

This is our first year and I need some help desperately! Thanks so very much in advance for any assistance you can give me.

I have a law firm with 14 HCE's and 25 NHCE's considering a cafeteria plan. Any names/contact information for TPA firms in eastern North Carolina that set up and administer cafeteria plans. Thanks for your help.

Since 1987, my traditional IRA has grown to over $100k. I don't know if I should convert it to a Roth IRA. I now contribute to a Roth IRA. My current tax bracket is 28%. My spouse and I make less than $100,000 per yr. I'm 52 yrs. old and would like to retire at age 62. I also have savings money to pay the ordinary income tax. Is a conversion right for me? Anything else I need to know? Thanks for any help.

We limit HCE's to 10% 401(k) pre-tax employee contributions in 1 of our collectively bargained plans to pass 401(k) testing. We do not currently match

We are thinking about adding an after-tax feature to our plan due to HCE participants inquiring.

Can we allow a 15% after -tax ? Are there any restrictions/limits on after-tax other than making sure we don't exceed 415 limits which now have been raised to 100% of compensation?

I do understand that we will have more administration as a result of adding this feature.

Can you point me to cite if any restrictions

I'm having difficulty understanding why the after-tax contributions portion of a 401K, when rolled over into a separate IRA from the pretax funds, thusly 2 separate IRAs, and then the after-tax IRA is converted to a ROTH, why is there a tax liability because of the other existing pre-tax IRAs, due to prorata. Could someone explain the prorata, and why other existing IRAs effect the newly converted after-tax IRA to a ROTH.

Is anyone using the Corbel Cafeteria Plan Document Service? It appears to me these documents are way behind with updates, when was the last update to include recent regulations?

Are the documents of any of the Service Providers current, as of today?

Has the income limit for a 2002 Roth IRA increased above $160K (married filling jointly)?

I was told that the income limit for a Roth IRA (filling joinly) has increased above $160K. Is this true?

Plan makes matching contributions on a payroll basis, but requires employees to work 1,000 hours of service in a given year to be eligible for matching contribution. No L/D requirement.

Demographics are such that there is only one HCE, and she will consistently meet the 1,000 hour requirement. Of the NHCEs, some will meet the 1,000 hour requirement later in the plan year than others, so their matching contribution will be based on a lower amount of compensation.

Dois pose a problem with respect to ACP testing? Employees will receive a uniform PERCENTAGE of compensation, but amount of compensation that match will be based on will vary somewhat due to staggered times at which they satisfy 1,000 hour requirement.

Hospital A which was performing poorly financial is now being run a different entity and called Hospital B. Hoptial B retained the employees of Hospial A. Would that constitute a "severance from employment" and be a triggering event allowing a distribution from a Non-Erisa 403(B) ? Any thoughts on any different twists if this was an ERISA 403(B) ?

Thanks everyone.