The biggest risk they run is one of discrimination. However, these day limits are not always written in stone, even in fully insured plans. I have seen carriers extend coverage beyond the maximum day limits for such things as physical therapy and skilled nursing care, but it was based upon the medical merits of doing so, not out of preferential treatment of a certain employee. This is more, I think, a matter of Utilization Review guidelines, which may, if you check into it, allow for the bending of these rules if it makes medical sense.

If it is a matter of completely overriding the rules of the plan, you better make sure that it's done for everyone across the board, and keep in mind that if you pay for benefits outside the guidelines of the plan, it may not be counted by the reinsurer in calculating "stop loss" limits.

If a DB plan requires, as a condition of employment, that employees contribute 5% of pay, can this contribution be made on a pre-tax basis? It seems that this could perhaps fall under the "one-time irrevocable election" exception contained in the 401(k) regs.

Assuming the standard "return of contribution due to mistake in fact" language in a plan document, can the employer recover their contribution in the following situations?

1. The employer contributes an amount to a profit sharing plan in excess of 15% of payroll. (The employer made the contribution early in the year in anticipation of a certain level of payroll which didn't materialize.)

2. The employer contributes $X to a profit sharing plan early in the year. At the end of the year, the employer determines that they have no profit (so the $X wouldn't be deductible).

3. The employer sends a check to the trustee as payment for trustee fees. The trustee deposits into the pension plan. The employer does not want this to be included as a contribution to be deductible under Section 404 (let's assume they are in full funding). The employer would rather deduct these payments under Section 162 as has been done in the past (when the trustee did not deposit it into the pension plan).

4. In a small plan maintained by the business owner's corporation, the business owner personally (and of course erroniously) makes the contribution to the plan.

Let's also assume these are one-time events, and are clearly due to a slip-up.

So, what can we do?

Thanks

I just received this from CCH:

the IRS has issued a notice that allows plans to treat hardship distributions from 401(k) plans or 403(B) plans in the year 1999 as eligible rollover distributions. Previously under the IRS Restructing & Reform Act of 1998, hardship distributions were not to be considered eligible rollover distributions. However, according to the notice, a number of plan adminstrators expressed concern that they had inadequate time to change plan systems in order to comply with the December 31, 1998 cut-off date.

I'm confused b/c this conflicts with information that I received from ASPA. Could someone please clarify this for me as to what the law is and means?

thanks!!

ASPA has posted the results of the December 1998 exams on its website www.aspa.org.

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Can an employer legally restrict or impose a time constraint on employee salary reduction contributions or vested employer contribitions?

After separation from service, can a plan restrict a transfer or rollover to another company 401(k) or IRA if a request is not recieved within a stipulated time period?

[This message has been edited by jladuca (edited 01-21-99).]

We have an employee who is leaving and she has a son 22 who is physically and mentally disabled and covered by medicaid. She wants to continue coverage through COBRA when she leaves. Is her son also eligible to continue even though he is covered by Medicaid?

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With a small DB/MP combination, my plans provided that the MP contrib will be reduced, if necessary, to meet the 25% combination limit. How is the reduced contribution to the MP allocated? do all EEs in the MP share in the reduction or just those who are in both the DB and MP Plans? My MP formula is integrated. Thanks for help.

I am interested to know the most current survey information regarding the offering of benefits to temporary employees. What types of benefits are usually extended and if there are contribution requirements, is it higher than the regular employees.

What is required to change the plan year of a cafeteria plan? IRS Form 5308 only

mentions retirement plans.

Does anyone have information regarding 401(k) billing software for allocated servicing? I am looking for a PC version that will run on a LAN based environment. Highly desirable features include time tracking and custom report capabilities. Please respond if you're aware of any software that may meet these needs.

Thanks

TAM

An employer maintains a profot sharing plan with an 11/30 year end. Is an adult child with compensation less than $80,000 treated as a highly compensated employee by reason on the family aggregation rules? Family aggregation was repealed for plan years beginning after December 31, 1996. The first year without family aggregation would be December 1, 1997. In determining if the child was a highly compensated employee, the Company would consider the look-back year. As the look-back year was before the repeal of family aggregation, is the child considered highly compensated for a plan year after the effective date the repeal of family aggregation.

Background:

plan document (502 plan number)adopted 7/1/95 to include voluntary options: dental, accident, cancer, intensive care, long-term disability and life insurance

7/1/96 plan amended for affiliate employer

7/1/97 employer removes long-term disability and life insurance (never formalized by amendment)

part-time employees exclusion never added plan but employer never allowed part-timers to enter plan

NOW, we are in the process of amending and restating the plan. Can we amend the plan to add the part-time exclusions and to take off the LT Disability and life insurance? They offer the latter but not on a pre-tax basis anylonger since 7/1/97.

NEXT, the employer stated that the short term disability has been paid 100% by the employer all of this time and should not be in the voluntary plan.

The employer also informed me that he has NOT filed 5500's on this Plan. Thoughts??

With current company incentive stock options I'm holding, I expect to have to pay AMT every year for the next 8 years (even spreading them out!). Does it make a lot of sense to convert some IRA money to Roth which will increase my income and reduce my AMT? I think this effectively saves me taxes...true???

1. I retired 6-1-98 am I eligible to continue putting into a Roth IRA.

2. If I have to have so much earned income, How much?

3. If I am not eligible, Is my wife who has no earned income?

Please e-mail your responses to me as well as posting them to the message board. Thanks to Kerry and nac for responding so far.

A friend is apparently being harrassed by her ex-employer, who went from accepting personal checks for continuing coverage, to requiring money order or bank check, to demanding cash and for three months in advance; all of it with little or no notice. Please reply today if at all possible: what gov't agency covers this situation, how does she file a complaint/claim, and should she retain an attorney right now or should she wait?

The second aspect of this is my question: the ex-employer apparently (from my point of view) terminated the employment to avoid the expense of continued coverage during a FMLA leave of absence. Should my friend be pursuing that aspect of the situation?

Her coverage is being threatened at precisely the wrong time for her current health care needs. I'd like to at least ease her mind about her recourse.

Thanks to all.

[This message has been edited by Franklin Evans (edited 01-19-99).]

What is the tax treatment of health benefits provided to domestic partners (the partner of the ee)under a self-funded plan structure?

Can I open ac****s for each of my three children and put the maximum in? If allowed, I would expect to lose control over them legally, but do it have to give notice to my children that they exist?

I am a salaried physician in a small group practice. After 1 1/2 years of employment I am now eligible to

participate in a Profit Sharing plan. If I were to participate, my monthly check would be reduced (?15%). My employer would contribute by this amount to the plan only at the end of the plan year. There is no "matching".

There is a 7 year vesting schedule.

My employment contract defines my annual "total compensation" as $xx,000 = salary + profit sharing.

Employer (& his accountant) state that despite my salary being reduced, it is an employer contribution, and that ERISA 29 CFR 2510 doesn't apply.

Is this profit sharing plan method allowable?

Is it truly an employer contribution despite my paycheck reduction?

If I participate, am I giving up the right to 15% of my annual compensation - i.e. forfeited were I to terminate

(or be terminated) prior to 100% vesting.

Please help.

Thanks, Oppy.

Can a retired individual roll a deferred compensation balance from a previous employer(from an exempt employer plan) into an IRA? The individual will turn 62 this year and the balance is $26,000.

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