Small employer is looking for a way to control health insurance plan costs. The employer is considering establishing a medical expense reimbursement plan for all employees, HC and Non-HC would have equal benefits under the plan.

The employer would move to a higher deductible plan on a fully insured basis, say from $500 to $1,000. The medical expense reimbursement plan would reimburse eligible expenses that were applied to deductible and exceeded the first $500. (The idea being the employee would still have a $500 deductible between the fully insured medical plan and the medical expense reimbursement plan.)

To make administration of plan simple, for the expense to be reimbursable, the employer would require EOB from fully insured carrier showing expenses were eligible but applied to deductible. EOB would also show when the $500 threshold had been met.

This would mean only employees participating in the employer sponsored health plan would be eligible to participate in the medical expense reimbursement plan. (Currently the employer pays nearly all of premium so participation is 100%)

Does anyone see any problems with this idea? Any comments would be appreciated.

At a recent conference on the changes to the 5500 form for 1999, it was mentioned that the DOL will now require plans to file the complete SAR along with the 5500 series. Does anyone know if this is true?

Is anyone familiar with using "shifting" to pass the ADP/ACP tests? Has the IRS or DOL issued anything explaining exactly how the technique should work?

Am looking for a source or a resource to determine various employer costs and health plan retention costs for:

1. Enrollment Management

2. Eligibility Management

3. Production Costs of Communication Materials (benefit plan brochures, provider directories, mailing, copying, etc.)

4. Billing Costs

Thank You.

Jack Hill

Hello,

I'm a bit confused about the tax liability on rolling over a IRA to a Roth. In 1999 I rolled my Annuity/IRA into a ROTH IRA account and from my research and reading of ROTH rules, tax rules, etc I don't pay taxes on the rollover amount. I'm not clear on this and am a bit confused and would like to clear my thinking up. The rollover amount was about $10k more then invested (gain). I understand I can't touch the rollover amount for 5 years but I don't plan on withdrawing from this until way down the road.

Thank you,

Erick B.

I currently am able to contribute $2000 a year to my ROTH but may come close/over the limit this year. Thinking about the future. Can I keep my ROTH and just not contribute in years I am above the limit or do I need to convert it to a IRA?

Thank you,

Erick B.

I work for a small nonprofit (5 fulltime employees)in Texas that is now instituting formal personnel policies. I am pregnant. There is no maternity leave or short term disability provided. The question has arisen if I can use some of my sick leave after giving birth, or if I have to immediately begin leave without pay, even when I am in the hospital. Are there any guidelines for medical leave for giving birth and recuperation?

As part of a DB plan the participant is required to contribute 5% of pay to an invidual annuity account. The DB pension is funded solely from the employer's contributions and has nothing to do with the funding of the annuity account. At retirement the annuity account balance is subject to lifetime annuitization. Can this compulsory annuitization be successfully challenged in Court?

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yes

I am a US based employee of the US subsidiary of a German company. Prior to the start of an earlier plant manager, employees in my situation received an extra 12.5% salary for enduring working in Mexico. Employees, who arrived subsequent to that manager do not get the extra pay. The earlier arrivals still do. Is this legal?

Does anyone know of a stand alone system that prepares illustrations for participants showing them their different potential account balances at retirement based on different savings rates.

I would want it to take into account any employer matching, current account balance, age, marital status, exemptions, compensation inflation, and possibly different rates of return.

Thanks.

Does anyone know of a stand alone system that prepares illustrations for participants showing them their different potential account balances at retirement based on different savings rates.

I would want it to take into account any employer matching, current account balance, age, marital status, exemptions, compensation inflation, and possibly different rates of return.

Thanks.

I have a SIMPLE 401(k) plan where two HCEs have exceeded the 415 Limits for the year. The deferrals plus earnings are returned to them in the following plan year. I am wondering how others report the return of this money to the employees. Do you show it in the plan year where the excesses occurred or do you show it in the year that the money was actually returned to the employee?

I have a question on the actions needed under 414(L) to properly complete a spinoff/merger from a defined benefit pension plan.

The rules make it clear that if you have an "asset transfer" from one defined benefit plan to another, it is viewed as a spinoff, followed by a merger. T.R. 1.414(L)-1(o). And the spinoff rules then present a "safe harbor," stating that everything will be okay if the value of the assets allocated to the spun off plan is not less than the value of the benefits, on a termination basis, in orginal plan for each transferred participant. T.R. 1.414(L)-1(n)(ii).

Here is the question. Often the original plan will not be fully funded on a termination basis. So the above safe harbor will not be available. If you do NOT use the safe harbor, is there ANY rule on the amount of assets that have to be transferred to a spinoff plan (maintained by an unrelated employer)?

The main thrust of the statute and the regs here is on preserving the BENEFITS for the transferred employees, and not on required amounts of assets to be transferred. And the rules about dividing up any "excess assets" in the original plan do not apply if there are no excess assets (and they also do not apply if the transfer goes outside of the controlled group). IRC 414(L)(2).

A. So is there any rule on any "minimum" amount that must be transferred to the spinoff plan, if the safe harbor rule is not going to be used? Or is this just a business decision for the parties to agree upon?

B. If a tiny amount is transferred, does that just mean that the spinoff plan simply has some contribution obligations, pursuant to the 412 funding requirements? Could the parties agree to a tiny asset transfer, or to no asset transfer?

C. Similarly, would there be any 414(L) limitation upon an agreement that the assets transferred would be reduced for any market declines in the assets that were held by the original plan, after the calculation of the benefits that were being transferred had occurred, but before the actual transfer of assets?

D. Is there any express authority on these points?

Am looking for sources of information on costs associated with benefits communications, more specifically: What is the cost for providing employees (on an annual cost basis) with the following information broken down by:

1. SPDs and Plan Documents (brochures on plan design) mailing and printing costs

2. Enrollment information

3. Cost of distribution of provider directories

4. Other costs (explain and estimate costs)

Looking for verifyable sources of information from large employers to Health Plans.

Thank you.

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I have a question on the requirements in Section 423 of the Internal Revenue Code, regarding Employee Stock Purchase Plans ("ESPPs").

An ESPP that meets the requirements in Section 423 receives the tax treatment provided under Section 421 -- in particular, the treatment that no income results for the employee/participants at the time of the transfer of shares of stock to that person, pursuant to that person's exercise of the underlying stock options.

One of the 423 requirements is that the options under the ESPP can be granted only to employees of the employer corporation, or of its parent or subsidiary corporations. This rule does not allow options to be granted to employees of a subsidiary joint venture, because that would be a partnership and not a corporation. PLR 8826053.

Here is the question. If a ESPP inadvertantly grants some options to employees of a subsidiary partnership (which is not allowed), is the result just that those particular employees lose the ability to no have income when they exercise their options? Or does the entire ESPP lose the ability to not create income for ALL persons who participate in the program?

Is there any specific authority on this point?

Also, has anyone had any experience with regard to the best way to "fix" a situation like this?

Does anyone have experience with this and can you please comment?

Why would you "file a claim"? If the benefits have not commenced, then nothing improper has happened. I would suggest that your client contact his employer and discuss your concerns. If that doesn't work, maybe you can talk to the actuary/individual responsible for the calculation.

I find that many of these disputes can be handled by a simple phone call or two.

Does anyone know of a COBRA compliance software package that would assist a small employer with low turnover?

Are increases in the 415 Compensation limit from 150,000 taken in account for determining persons benefit under a DB Plan? For example: high three comp earned in Plan Years 92-94. In calculating the 2000 accrued benefit can you include compensation in excess of 150,000 even if those amounts were earned in 92-94?

Thanks

I want to get my hands on PC-based software that provides the foundation for a company wanting to put together an employee benefits manual. This software does not have to involve personnel policies, just employee benefits. Please e-mail me at rwolffd12@aol.com. Thank you.