Under which circumstances must a self-insured plan hold employee health insurance contributions in a seperate trust account?

I am seeking advice about this question:

In a self-insured health plan,

when must deductions from an employee's wages be required to be held in a seperate trust type account?

Company A acquires Company B through stock or asset purchase and then merges the plans of both companies into one plan. Are the participant accounts from Company B's plan before the merger counted towards top heavy.

There are many issues involved. I suggest you do a search on the Message Boards first.

Most of the windows I have seen have been an increase in the pension benefit, such as a waiver of the usual early retirment reduction and an award of addtional years of service in the benefit computation. These are usually funded through the DB plan, usually for 2 reasons:

1. the plan has sufficient excess assets at that time to absorb the entire cost of the increased benefits.

2. including the benefit in a bonafide employee benefit plan will typically avoid the issue of age discrimination (ADEA). However, the window itself must not be considered discriminatory under related pension regualations.

There are also issues relating to FAS 88 accounting.

Please feel free to post additional Qs.

I have a DC plan that terminated 12/31/99. The owner rolled his balance over into an IRA in early 2000 before the year-end testing could be completed.

The plan has failed the ADP test. What are the requirements/filing issues for refunding dollars that are no longer in the plan?

Any citations would be appreciated.

I don't believe that setting a termination date creates a plan year end. Rather, when the final assets of the plan are distributed, then a year end occurs in conjunction with the final distribution.

What is their regulatory basis for creating a plan year end with the termination date?

A 75-employee company has a non-standardized prototype 401(k) plan. The adoption agreement provides for entry no sooner than the first of the quarter after employment, which the company selected.

The company has been administering the plan to allow employees to participate immediately upon hire, with no wait. Many employees did so. They are willing prospectively to make employees wait until the beginning of the quarter, but the plan has been administered contrary to the document for the last 18 months.

What to do?

The company DOES NOT want to repay the employees who deferred to early. So, I don't believe self correction under the IRS APRSC program would work, since they aren't correcting anything. (The amount's are probably at least several hundred dollars for at least a dozen or so employees.)

I also don't thing the VCR or SVC program will work, since again they do not want to repay the employees.

(Let's assume that no HCEs were in the affected group. I'm not sure about this, however.)

Any ideas?

Anyone ever consider why mandatory state tax withholding is not preempted under ERISA?

TPA paid out funds for orthodontia down payment based on estimated fee schedule, employee terminated a few months later, plan year has now ended. It was discovered that the orthodontia treatment was delayed and the down payment never used. Are these funds recoverable, and what is the proper method to recover the funds? Thank you.

I terminated my employment with a small company. Upon leave, I was asked to repay a required vacation (which I was forced to sign on when I started), as well as my insurance premium for the remainder of the month. Is this legal for my employer to ask me to pay insurance coverage for a full month after I gave notice simply because they pay their insurance company in advance? I signed nothing regarding the matter, nor was I informed about this upon hire. What are my rights?

I terminated my employment with a small company. Upon leave, I was asked to repay a required vacation (which I was forced to sign on when I started), as well as my insurance premium for the remainder of the month. Is this legal for my employer to ask me to pay insurance coverage for a full month after I gave notice simply because they pay their insurance company in advance? I signed nothing regarding the matter, nor was I informed about this upon hire. What are my rights?

Does anyone have suggestions for reference materials, particularly those with checklists or similar aids, to help guide HR through the benefits and employee relations maze associated with mergers and acquisitions?

I am inquiring whether or not anyone has information regarding sec. 105 health & welfare plan and how it is run. I am trying to find the drawbacks to this plan and any additional sites I can look to find info.

I know divorce constitues a change in status, but what about separation?

Thanks

Pat Insall

How to correct plan when the plan sponsor deposits funds received from prior recordkeeper during transfer to new recordkeeper. What should administrator do to correct this error? How are the funds treated now that they are in a corporate account?

Would you report a loss on an excess deferral (pre-April 15th) separatly from the excess deferral, or once in the prior year net of the loss? For example, say a participant deferred $11,000 in '99 and the $1000 excess was worth $900 when it was removed in March. Would you report the $1000 in '99, and -$100 in 2000, or just the $900 in '99?

A medical doctor practices two separate specialities (general surgery & family practice). He is a 50% partner in a two man member PLLC (which only performs general surgery)... the PLLC has a KEOGH-MPPP. He also practices family medicine as a sole-proprietor ...which has a defined contribution SEP. The partnership & sole-proprietorship are NOT related in any way (regarding services or billing or location etc.). QUESTION: Can he contribute $30,000 to each of the two plans in the same year (a total tax deduction of $60,000) ?? OR must the two entities (partnership & sole-propritorship) be aggregated and deemed a "single employer" ? A tax code or court case would be much appreciated.

I have come across an IRS opinion letter that suggests that administrative fees charged on participant distributions may not be permissable. Does anyone have any guidance on this matter?

Assuming no HCEs benefit under the plan there will not be any discrimination issues. The classes of NHCEs that they want to exlude can be named as excluded classes on a protoype document. Are these office employees of the temp agency, so that they don't work for other companies? Are the HCEs covered under another plan?

Assume that A, B, C, D and E sell shares to ESOP. A and B elect 1042 treatment with respect to their shares; C, D and E do not make a 1042 election. (A, B, C, D and E are unrelated and owned less than 25% of corporation.) Two questions: (1) Can C, D and E receive allocations under the ESOP of both 1042 and non-1042 shares? It seems to me that the answer is "yes" because C, D and E did not make a 1042 election. (2) Can A and B receive allocations under the ESOP of the non-1042 shares (i.e., the shares sold to ESOP by C, D and E)? The language under Code 409(n) seems to prohibit the allocation to A and B of shares "to which section 1042 applies". If this is correct, then it would seem that A and B could receive non-1042 shares. Thanks for your help.