Bcompliance2003

A potential client wants to offer health insurance for the first time. While they already have employees, most are covered by either spouses or COBRA at this time. The company wants to offer a traditional HRA for any employees who want to continue their current plans until the end of the year (so as not to incur a new accumulator with the new plan). Can an employer offer a traditional HRA selectively to these employees who choose NOT to participate in the newly offered employer-sponsored plan?

How should HSA pre-tax deductions be handled if an employee is on an unpaid Leave Of Absence across two different tax years? For example the employee starts the LOA in 2024 and comes back in 2025.

We have a client who gives premium incentives to the employees for getting a physical- I know that's fine. But now they want to require spouses to have a physical if they are on the plan as well-- and "require" them to do so to be on the plan. Can they do that? I know they can probably give an additional premium discount, but can they require the physical for them to be enrolled? That seems extreme, but I need to know the rules so we can forward it to them.

Hi - Have an asset sale where the seller will terminate their FSA plan on 5/1 and open up the buyer's existing FSA plan to those seller's former employees. They will roll the existing FSA balances of the seller's employees to the buyer. To my understanding, any employee of the seller's who was not on their FSA plan when the deal closes does NOT have new FSA election rights under the buyer's plan (unless a QLE occurs down the road). Can anyone confirm this is correct? And how does COBRA come into play here with FSA? If an employee had unused funds left over in the seller’s plan, could that employee elect COBRA for the FSA plan (to have access to their unused funds ) AND enroll into the buyer's plan as a newly eligible EE?

Thanks Brian. I thought this would be the case. So, is there a situation where the FSA could be ineligible (forfeited) and the employee could keep the HSA in tact? Would the IRS regs allow for that scenario? They contributed $6,750 to the HSA versus $800 to the FSA. Clearly, there is more to spend in the HSA which would benefit the employee more.

We have a client who had an employee contribute $6,750 to their HSA and $800 into the FSA in 2023. The FSA contribution was meant to go into a limited purpose account, but they just learned that there was no limited purpose account set up, and the funds were coming from the full-purpose FSA. Prior to this, they had a rule set up in their system, which prevented the enrollment. The only reason they allowed the election to pass was because they thought it was a limited purpose account. We are currently working with the carrier to set up the limited purpose account so this will be corrected going forward. The employer did instruct the employee at the time that the FSA was to be used for dental and vision only. How should we advise the client for what occurred in 2023?

Thanks for the confirmation. Appreciate it.

No, the employer offers a self funded medical plan through UHC. The employee in question opted was allowed, by the supervisor, to move to the Netherlands last year and has worked remotely - and unbeknownst to HR was left on the UHC medical plan. The employer is starting to call folks back into the office and this employee just quit. The employer sent him a termination letter and mentioned COBRA availability. So the plan is a US plan.

A US based employer has an employee who is working abroad; the employee quits and is remaining in that foreign country to live. What are our client's obligations in terms of offering coverage to this employee, considering their current international residence? Does the issuance of a COBRA rights letter in this scenario entail any legal or compliance risks for our client, given the employee's non-U.S. residency? Are there any specific steps our client should take to rectify this situation and ensure compliance with both U.S. and international regulations? Thank you!

Few questions regarding employee benefits during an M&A 1. Does an Employer have to provide advance notice to its employees telling them the company is being sold? 2. The benefits are planning to end on the day of the sale, 10/2/23; when does the seller's benefits end? Would it be 10/2/23 or 10/31/2023 since their premiums for October are already paid for the month? 3. The plan is to allow the seller's employees enroll into the buyers plan retroactive to the date of the sale (10/2). However, the employees won’t be officially onboarded yet as they will need to go through the full hiring process such as completing payroll docs, I-9s, etc. Because the seller’s benefits will end on the date of the sale, our client doesn’t want to wait until the onboarding process is complete to offer benefits. Could this be an issue? 4. If the benefits under the seller don’t end until 10/31/2023, any potential issues if the buyer is the owner of the employees as of 10/2/2023?

An employer is terminating their POP early (plan runs Jan 1 - Dec 31 ... they're terming it 8/31). The company itself is completely dissolving and there will not be any employees left. Do they still have to conduct the POP non-discrimination testing before the plan is dissolved?

Situation is: Employee & child are covered as active under an employer group plan Employment is terminated and the employee + child elect COBRA Several months later, the employee becomes entitled to Medicare Can you please confirm if this second QE qualifies the child for the additional 18-months (total 36 from the time the employee terminated employment)?

The employer's HSA plan starts September 1, 2023. Can an employee contribute the maximum allowed HSA contribution for 2023 and 2024?

Can an employer cover portions of dependent premiums at different levels? For example: Employee Only Coverage: Covered at 100% Spouse Coverage: Covered at 0% Child(ren) Coverage: Covered at 50%

If a client has 49 employees within a 75 mile radius of their HQ and 11 employees beyond 75 does, does FMLA still apply?

A few questions about FSA during M&A: 1. Scenario: The FSA plan continues under the seller's plan - after the two parties agree that the seller will continue its medical FSA for the transferred employees, I am reading the buyer must have an existing medical FSA plan OR be prepared to adopt a new one. QUESTION: How soon does the buyer have to adopt a new FSA plan? Say for example, the parties agree the buyer will continue the seller's plan until the end of the plan year. Would the buyer have to adopt the new one after the end of the seller's plan year or is it expected that the buyer will have to adopt the new FSA plan ASAP after the close of sale? QUESTION: If the buyer assumes the seller's medical FSA how does that usually work with the FSA vendor and the contract? Does the buyer have their own contract with the vendor? What is the usual situation with this?

I was reviewing the Form 720 the IRS revised in March 2023 and noticed in IRS no. 133 has last year's data listed (date and fees). Has anyone else noticed this, too? Or am I missing something? If I am not losing it does anyone know when the IRS plans to send out an updated version? https://www.irs.gov/pub/irs-pdf/f720.pdf

Thank you Brian! Makes sense.

The client's Section 125 SPD says the effective date of a QLE (in this case, marriage) will be on a prospective basis whereas the ERISA SPD says the effective date of the new spouse's coverage would be based on the date of the event. The employee submitted the necessary enrollment paperwork 10 days after the event. I did some research and found that in these cases the employee is entitled to the benefit of the more generous of the 2 documents. So, the ERISA SPD would govern in this case. Then I was discussing with a coworker and their thought is the cafeteria plan document is the more accurate, unless it is the QLE is birth or adoption. Does anyone have any thoughts on this?