Outside of the cafeteria plan, would the presence of an election/choice between various benefits, such as deferred compensation plan, health or vision benefits, offered by the employer to an employee mean that normally pre-taxed deferrals become included in the employee's gross income?

If a doctor teaches at a university and participates in the school's 403(B) plan (contribution $20,000) and also participates in the school's 401(a) plan (contribution $10,000); may the doctor also participate in his own profit sharing plan? If so how much may he contribute to his own plan?

This year we installed a MP plan and a SEP (using proper prototype)in '99, both one person plans - in '99 and this year, he contributed $30,000. SEP is now valued over $200,000 due to rollovers, making assets of both plans greater than $100,000. Does a 5500EZ need to be filed due to the SEP or does the EZ requirement refer simply to 'real' qualified plans? Thanks.

I could not find an answer to this question on the message boards, but please forgive me if it's already been asked. An employer overfunded matching contributions for an owner in a SIMPLE IRA for 1998 and 1999 (i.e. more than 3% of compensation). When returning the excess, should the principal be returned as well as earnings? Moreover, should there be a 1099-R produced, and if so, with what distribution code for principal, and with what distribution code for earnings? Any other issues that I should be aware of here?

Can an individual applying for individual coverage through an HMO be denied coverage, under HIPAA, because she/he only recently (six months ago) quit smoking? The individual has been without coverage for more than a year.

The HMO, in its inestimable wisdom, has decided not to cover individuals who have not quit smoking earlier than 36 months before applying.

Can a 501©(3) organization sponsor a safe harbor 401(k) plan?

I was just asked by a TPA if, when doing the non-discrimination test for a cross-tested allocation for the year, are salary deferrals in the (k) portion of this plan included in the test?

The TPA said that when only looking at the PSP portion (Employer contributions allocated on a cross-tested basis) the average benefits test passed. But the computer added deferrals from the (k) portion and the test failed.

This TPA said that the computer grabbed any amount that was considered an annual addition and counted it in the cross testing.

I certainly thought the (k) portion and the PSP portion were totally separate, but if I'm wrong, I need educating fast.

This is such a strange concept for me that I'm not even sure I'm wording my question clearly.

Thanks for any responses.

An insurance agent of a client of mine proposes using approximately $400,000 of an $800,000 account balance in a frozen plan to purchase a paid up whole life first to die policy on the lives of the participant and his spouse. No insurance has been purchased in the past, so the $400,000 is available. I believe (but am not sure) that the goal is to take a distribution of the policy in about five years when the cash value is still low, apparently to avoid taxes. Does this seem reasonable? Can the policy be a first to die, thus insuring the life of a nonparticipant (the participant's spouse)? Thanks.

We've been retained by a new client to amend their MPPP to reflect a 6% contribution for participants with less than 10 years of service and 8% for those with service 10 years and over. I assume this will require a volume submitter document. If the plan passes rate group testing each year, does anyone see a problem? Does anyone have suggested language? Thanks.

After leaving my job, I continued my insurance under the Cobra coverage. Is it possible to extend the coverage past the initial 18 months?

A documentation question: Company A buys Company B and Company B's plan will now be merged into Company A's plan. Do both plans need some kind of "merger" resolutions? Does any one know of any sample language? Thanks for any guidance.

Is the following information accurate?

"When Contributions are due:"

1. Payroll deducted amounts, including 401(k) & 403(B) Elective Deferrals, After-Tax Employee Contributions (and loan repayments) are due as soon as they can be deposited to the Trust Fund. (Section 125 "payments'?)

2. Safe Harbor Matching Contributions, calculated on a basis other than annual, are due no later than the end of the plan year quarter following the quarter in which they are calculated.

3. Defined Benefit and Money Purchase Pension Plan contributions are due 8 ½ months after the end of the Plan Year.

4. Profit Sharing Contributions and non-Safe Harbor Matching Contributions are due by filing date of the Employer's tax return, including extensions. Corporations, Partners and Sole Proprietors have different extension periods although Partners and Sole Proprietors end up at the same deadline (Oct 15).

5. Qualified Matching Contributions and Qualified Non-Elective Contributions, used to solve ADP/ACP/MUT testing failures are due by the end of the Plan Year following the end of the Plan Year tested.

End.

501©(6) organization has a for profit subsidiary which

has a broker dealer as a subsidiary. It has been proposed

that the 401(k) plan sponsored by the ©(6) org be

invested through the bd sub. The for profit sub would

receive the commissions on the assets which ultimately

would go to the ©(6) parent. Is this a prohibited

transaction and/or fiduciary issue? As a trustee of the

plan, as well as an employee of the sub, I am concerned

with any potential violations. On the one hand, the

revenue can help keep membership dues and expenses reasonable for the parent org. On the other, we don't

need any violation problems either. Any information,

thought and references to DOL regs would be appreciated.

THANK YOU!!

Let's say you lose 90% of the value of your 401k investment in the year 2000. Are these losses tax deductible?

While most businesses offer employees some combination of health and/or life insurance benefits, virtually none offer employees auto, home, or other personal insurance benefits.

Is there any reason why an employer would not be allowed to offer employees auto or home insurance as part of a benefits package?

Is there any reason why an employer would not want to offer auto or home insurance as part of a benefits package?

Participant, age 76 and prior owner of Company A, says he has valid TEFRA eleciton for the Company A DB plan. He can not produce the election form. What, as plan administrator, is my responsibility when it comes to making MRD. This is a new plan for me - my company recently bought the assets of Company A and assumed sponsorship of the DB plan.

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.