I administer COBRA in-house for my company of 2,500 employees. I have about 20 active COBRA participants. I am having a lot of problems with my "Benenfit Plans System" software. Does anyone know a good software for adminisering COBRA?

What is the HIPPA compliance for Explanation of Benefits information,i.e., who should the EOB be addressed to? Should it always go to the employee or to individuals depending on who received the service? Could an over age dependent receive the EOB if no longer living with the employee?

I am attempting to do some research on employee-pay all VEBAs. Does anyone know of any websites, sources, etc. Specifically, I need to know what happens if the VEBA does not pass nondiscrimination testing. How often does testing need to be done? If a participant leaves employment, I assume that you cannot force a participant to take his money out of the VEBA. Can a participant rollover his VEBA to another VEBA? Can a participant elect to suspend or decrease his contributions? Are there contribution minimums/maximums? Does an employer need to maintain the account for a participant who leaves his employment. What if the participant is missing? Can an employer impose an administration charge on the VEBA for a participant that leaves his money with the employer?

FYI,

Everyone with non-calendar year plans, especially New Comp. Plans, should read the post by Tom Poje on 04-03-2000 titled "limitation year / non-calendar year plans".

I read Sal Tripodi's write-up on the $35,000 limit at his website ("$35,000 limit for DC plans takes effect for years ending after December 31, 2000" at http://www.cyberisa.com/erisa_new.htm ) and was surprised when the new limit can take effect. Tom Poje's posting did a great job of explaining to me why this limit can apply now.

Has anyone else recently received IRS letters on non-filing of plans for the 1997 plan year? I've received at least four faxes from (worried) clients in the past week regarding non-filed 1997 forms. In all cases these were terminated plans that had filed final forms well prior to 1997 (I have copies of the final filings so we're safe - now all I have to do is talk these prior retired clients off the ledge).

What changes in health insurance coverage (i.e. drop coverage, drop dependents etc...)can an employee paying for health premiums with after-tax dollars make as opposed to an employee paying for premiums with pre-tax dollars, outside the open enrollment period?

We have a 401(k) plan that would like to amend to a SEP plan. Is this possible, or would the 401(k) plan have to terminate and then start a new SEP. It is my understanding that SEPs are not considered a sucessor plan so that shouldn't be an issue. Any cites would be appreciated. Thank you.

I've seen several messages making reference to "new rules/ regs regarding cafeteria plans effective 01/01/2001".

What is this all about ? I havn't herad anything about it. Can anyone shed some information on these new rules?

I just caught a CFP on CNBC who had stated that the funding limits for IRAs had been increased to $5,000. I was under the impression that legislation had not yet been passed to increase the funding limit from $2,000.

Please let me know if the funding limits for a traditional IRA and a Roth IRA have really been changed, or if this person is out to lunch.

Thanks.

Bob Predaina

Twenty years ago, I drove a cab for a living. It was a cowboy's life, a life for someone who wanted no boss. What I didn't realize was that it was also a ministry.

Because I drove the night shift, my cab became a moving confessional. Passengers climbed in, sat behind me in total anonymity, and told me about their lives. I encountered people whose lives amazed me, enobled me, made me laugh and weep. But none touched me more than a woman I picked up late one August night.

I was responding to a call from a small brick fourplex in a quiet part of town. I assumed I was being sent to pick up some partiers, or someone who had just had a fight with a lover, or a worker heading to an early shift at some factory for the industrial part of town.

When I arrived at 2:30 a.m., the building was dark except for a single light in a ground floor window. Under these circumstances, many drivers would just honk once or twice, wait a minute, then drive away. But I had seen too many impoverished people who depended on taxis as their only means of transportation. Unless a situation smelled of danger, I always went to the door. This passenger might be someone who needs my assistance, I reasoned to myself. So I walked to the door and knocked.

"Just a minute," answered a frail, elderly voice. I could hear something being dragged across the floor.

After a long pause, the door opened. A small woman in her 80s stood before me. She was wearing a print dress and a pillbox hat with a veil pinned on it, like somebody out of a 1940's movie. By her side was a small nylon suitcase. The apartment looked as if no one had lived in it for years. All the furniture was covered with sheets.

There were no clocks on the walls, no knickknacks or utensils on the counters. In the corner was a cardboard box filled with photos and glassware.

"Would you carry my bag out to the car?" she said. I took the suitcase to the cab, then returned to assist the woman. She took my arm and we walked slowly toward the curb. She kept thanking me for my kindness. "It's nothing," I told her. "I just try to treat my passengers the way I would want my mother treated".

"Oh, you're such a good boy," she said.

When we got in the cab, she gave me an address, then asked, "Could you drive through downtown?"

"It's not the shortest way," I answered, as we pulled away from the curb.

"Oh, I don't mind," she said. "I'm in no hurry. I'm on my way to a hospice".

I looked in the rear-view mirror. Her eyes were glistening. "I don't have any family left," she continued. "The doctor says I don't have very long."

I quietly reached over and shut off the meter. "What route would you like me to take?" I asked.

For the next two hours, we drove through the city. She showed me the building where she had once worked as an elevator operator. We drove where she and her husband lived when they were newlyweds. She had me pull up in front of a furniture warehouse that had once been a ballroom where she had gone dancing as a girl. Sometimes she'd ask me to slow down in front of a particular building or corner and would sit staring into the darkness, saying nothing.

As the first hint of sun was creasing the horizon, she suddenly said, "I'm tired. Let's go now."

We drove in silence to the address she had given me. It was a low building, like a small convalescent home, with a driveway that passed under a portico. Two orderlies came out to the cab as soon as we pulled up. They were solicitous and intent, watching her every move. They must have been expecting her.

I opened the trunk and took the small suitcase to the door. The woman was already seated in a wheelchair.

"How much do I owe you?" she asked, reaching into her purse.

"Nothing," I said.

"You have to make a living," she answered.

"There are other passengers," I responded.

Almost without thinking, I bent and gave her a hug. She held onto me tightly. "You gave an old woman a little moment of joy," she said. "Thank you."

I squeezed her hand, then walked into the dim morning light. Behind me, a door shut. It was the sound of the closing of a life.

I didn't pick up any more passengers that shift. I drove aimlessly, lost in thought. For the rest of that day, I could hardly talk. What if that woman had gotten an angry driver, or one who was impatient to end his shift? What if I had refused to take the run, or had honked once, then driven away?

We're conditioned to think that our lives revolve around great moments. But great moments often catch us unaware--beautifully wrapped in what others may consider a small one.

PEOPLE MAY NOT REMEMBER EXACTLY WHAT YOU DID, OR WHAT YOU SAID, ...BUT THEY WILL ALWAYS REMEMBER HOW YOU MADE THEM FEEL.

(Author Unknown)

I am hoping someone out there can help me and my co-workers. We are covered under a "self-funded health" plan and are having a lot of problems. The first of which is claims that just don't get paid, sometimes for three months or more.I know lots of people in collections from this.

When we call the insurance company, they say call the employer, and vise-versa. We are also all being told on the phone that our plan is not subject to any time limits for our claims to get paid, something about they are exempt from all of that.

I also know lots of people in our plan geting their claims denied for a "pre-existing condition". There doesn't seem to be any rules for this in our plan except if its a big bill its pre-existing and they wont pay. We cant get any help calling the insurance company or our own employer. Can anyone tell me who or what agecny to call for help or to lodge a complaint?

In the pages showing the new compliance information on the EEOC, the portion that discusses whether or not benefits are equal includes the following:

"In some cases, it may be clear from the face of a benefit plan that older workers are getting lower benefits than their younger counterparts on the basis of age.

EXAMPLE - Employer R offers employees life insurance coverage valued at 50% of their base salary at age 55. The plan states that employees will lose 5% of that payment each year, and will be ineligible for coverage altogether once they turn 65. These benefits are explicitly tied to, and reduced because of, the recipient's age.(9)"

QUESTION: If this is the case, then if my (now former) company offered life insurance to all employees at 1x salary but dropped that to only 50% coverage after age 65. Would that not be considered an unequal benefit? (only one flat rate was charged to the company, nothing was age based in the fees).

Also, Same 65 year old would be automatically vested in the 401 (k) plan, otherwise vesting would be 20% per year service.

Any comments? Are these two practices permissable?

DB plan participant dies in service. The non-spouse beneficiary receives a lump-sum distribution equal to the present value of what would have been future pension payments to the deceased. Is there any way this non-spouse beneficiary may defer taxation on this distribution?

My questions concern removing excess contributions from a one owner/employee Money Purchase Keogh plan for 2000 (calendar year). I'm trying to make sure I understand all the tax ramifications.

I checked the information on page 13 of the 1999 IRS Publication 560. It seems to say that the distribution will not be taxable if the plan administrator is notified by March 1, 2001, and the excess, plus earnings, are distributed no later than April 17, 2001. The information I found appears under the subheading "Elective Deferrals (401(k) Plans)." Is this also application to excess contributions made to a Money Purchase Pension Plan?

I also want to make sure I understand the rules for issuing Form 1099-R. Must the plan administrator issue a 1099-R for 2000 or 2001 to report the distribution of excess deferrals? The 1099-R instructions are confusing as well about which distribution code should be shown in box 7. Distribution code "E," denoting excess IRC § 415 contributions seems applicable to the excess, but says that it may not be used in conjunction with any other distribution code. Thus I assume the earnings are reported on a separate Form 1099. If the earnings are distributed in 2001, will they be reported on a 2001 Form 1099 and thus be taxable in 2001? If a separate Form 1099-R is used to report the earnings, which distribution code should be used in box 7, Code 8 or Code P? I believe such a distribution, while taxable, is not subject to the 10% early distribution penalty under IRC § 72(t).

We have a client who is 50% shareholder of a S-Corp. The S-Corp is 50% owner of a LLC. The client has W2 compensation from the LLC. The LLC has no qualified plans or SEPs. The question is, can the client contribute to a SEP sponsored by the S-Corp. If not, what about the LLC??

I was terminated due to medical restrictions from my doctor. I was offer COBRA Insurance (which was to be paid by the end of that month to cover the following month), and I decided to pay the monthly premiums. What I don't understand is why I have to make my checks out to the company and not the Insurance company. My ex-employer states that I must send the money to them. How can I find out if the amount I send them is the amount I am supposed to be paying and if I can send it directly to the Insurance company. This will be my third month of payment, and last week I received notice that the amount has gone up $20.00/mo. to start this month. I called the BCN Insurance Co. and they had no information for me. I was told to ask the company. I would appreciate any information on how COBRA works. Thank You

I believe all of the following statements are true regarding changing a vesting schedule. Does anyone disagree?

Any participant with 3 years of service must be given the choice as to which schedule to vest under.

The vesting percentage of a participant cannot ever be lowered by a change in vesting schedule.

The new vesting schedule can apply to all new participants if the amendment changing the vesting schedule is worded that way.

The plan amendment may provide for whichever schedule give the participant a higher vesting percentage in each year, but is not required to.

A plan can adopt an amendment that specifically states that any employer contribution made after the effective date of the amendment would vest under the new schedule, regardless of the participant's vesting percentage under the old schedule (or at least, no guidance specifically prevents it).

A plan participant has asked a financial institution to open up self-managed investment account related to his qualified profit sharing plan. The participant wants to invest in certificates of deposit with the financial institution. Does the financial institution need special authorization or instruction from the plan trustee in order to open the self-directed account, or is the language in the adoption agreement indicating that plan investments are to be paricipant directed sufficient? Furthermore, how would the self-directed account be titled, i.e. [name of retirment plan] f/b/o [name of plan participant]? Generally, just how involved does the plan trustee/administrator need to be when the participants are allowed to set up their own self-directed investment accounts? Any insight would be greatly appreciated. Thanks.

A self-insured plan will drop coverage for an ee's spouse upon divorce. If ee does not notify plan administrator of divorce immediately, other than COBRA issues, what legal implications if plan document is silent on notice procedures? Administrative issues involve the premiums paid vs. any claims paid during the period. Do state insurance laws usually address this issue?

The Trust has taken a maximum loan on a life policy so that the participant may roll the proceeds to an IRA. The Trust then does a change of ownership from the Plan to the participant (the participant wants to maintain the policy). When the policy is surrendered by the participant, is the outstanding loan amount then taxable to the participant?