youngbenefitslawyer

Anyone dealt with the issue of how an annulled marriage impacts a beneficiary designation? Participant designates sister as beneficiary and then gets married. The spouse becomes the beneficiary under the plans terms (no spousal consent for sister to remain beneficiary). The marriage is later annulled? Is the marriage treated as if it didn't happen, which in effect reinstates the sister as beneficiary?

Please share any DOL guidance or opinion letters you may have come across that address the issue of determining whether compensation paid to an investment manager hired for the sole purpose of managing a plan's assets is reasonable compensation under 2550-408c-2(b)(1) - (b)(4). Investment manager is a fiduciary.

Yes that's correct -not a HIPAA timing window issue but a Section 125 cafeteria plan question. Thank you Brian!

Thank you. I'm not so concerned about the preservation of the dependent's COBRA rights, but more so the participant's ability to change his coverage tier. Can he change his coverage to Employee Only if he missed the special enrollment deadline? In other words, does he have to continue to pay at the coverage level he had prior to the dependent becoming ineligible?

Can a participant's enrollment be changed if they failed to inform the employer of a dependent's ineligibility during the special enrollment period? The participant presented a "nonsuit" to the employer that indicates the participant, as of February 2025, is no longer proceeding with formally adopting a child. The participant divorced his spouse in 2024 and the ex-spouse is currently receiving COBRA. Assuming the nonsuit constitutes a qualifying event, the participant did not present the nonsuit to the employer until after the end of the special enrollment period. The employer has been made aware that the child is ineligible because he/she is no longer a dependent of the participant. Coverage by the insurer for the now ineligible dependent can be dropped prospectively; however, can the participant's coverage be also be changed from Employee + Dependent to Employee Only given that he no longer has a dependent? What about COBRA? Who should receive the notice? The participant or the participant's ex-spouse who is proceeding with adopting the child?

Will the compensation threshold of $145,000 be increased? In other words, do we know what the indexed amount will be at that date or will it be $145,000 and indexed moving forward after 1/1/2026

Company A sponsors a 401(k) plan and there are two participating employers who are currently a part of the same controlled group with Company A. Buyer is purchasing Company A only. The participating employers are not being purchased and Buyer / Seller do not want to create a multiple employer plan by allowing the employers to continue participation post-closing. Can the current plan be spun off into two plans and if so, are there any concerns that the assets are and will continue to be comingled post-closing considering that the participating employers will no longer be a part of Company A's controlled group?

The beneficiary designation form was executed by the participant in 1988. She married after the fact and made no changes to the designation. She has since passed away. The plan provides that a spouse must consent to an alternate beneficiary designation. No such consent is on record and the participant's daughter has been named as executor of her estate.

Participant designated family member before marriage, gets married, and then gets divorced. Is the initial beneficiary designation reinstated or did the marriage void it?

Preparing a plan to be submitted to the IRS for approval. One of the requirements is that the cover letter summarize how the provisions of the plan are affected by each amendment (related to changes in the law listed in the cumulative list). Any guidance or examples of how this is addressed in a cover letter? Is it a matter of simply attaching the model amendment prepare to address the changes?

Company and participating employers are consolidating benefit plans so that all employees participate under one plan. As a result, premiums will increase for some employees. Company would like to understand if it's possible to pay certain employees a stipend on a pre-tax basis that is used to cover the increased premiums. The plan is self-insured, so my thought is that providing this payment to some employees and not others presents some discrimination issues. Also, if the stipend is paid through payroll, can it be deducted pre-tax to pay for the cost of premiums?

Is it permissible for an employee to cancel his coverage when he enrolled solely because a court issued a QMCSO requiring him to cover his dependent and such order was subsequently rescinded? Employee was not previously enrolled and had to enroll for coverage to comply with the original order to cover the child.

Plan has been operating like an ESOP by issuing participants employer stock (not publicly traded) that is not funded. When an employee terminates his / her employment, the stock is not returned to the company but is reallocated to remaining participants. No written procedures on how the stock is managed. Now having trouble paying distributions. Can such issues be corrected although not specifically contemplated under the VCP or DOL VFCP?

Changing the facts a bit. An employee participates in two 401(k) plans within the same plan year. Each plan is sponsored by a related employer. Can the compensation limit be applied separately to each plan for purposes of determining matching contributions? I believe the answer is yes, but want to confirm.

For HRAs that reimburse employees for premiums, is it acceptable to specify the maximum dollar amount as follows: "the amount of premiums that the employee incurs during the coverage period," or does have to be an actual dollar amount?

Anyone aware of any DOL or IRS enforcement actions concerning employee assistance programs? Specifically instances in which the DOL or IRS found that an EAP was not an excepted benefit?

Company A and Company B are a part of the same controlled group. Company A has a 401(k) Plan and Company B has a 401(k) Plan. C is employed by Company A and participates in Company A and Company B's 401(k) Plan. Company B leaves the controlled group, but C remains employed by Company A and has a balance in Company B's 401(k) Plan. Can C receive a distribution from Company B's 401(k) Plan after Company B leaves the controlled group? Is the departure of Company B from the controlled group considered a distribution event?

How is a buyer to treat cobra continuation coverage under the following circumstance: Seller has former employees who have elected mini-COBRA coverage pre acquisition. Seller will terminate the benefit plans so Buyer will have the obligation to provide COBRA to all M&A qualified beneficiaries which would include those individuals currently receiving mini-COBRA. Does Buyer continue to provide coverage for the mini-COBRA period (12 months) even if Buyer is a large employer and not eligible for mini-COBRA or does the COBRA continuation period increase for those already receiving mini-COBRA because Buyer is subject to the federal COBRA regulations? If you're aware of any guidance, PLRs, cases, please share.

For merged plans, I agree that they would not be considered newly established because the effective date would not be the date of the merger. But for plans that are spun-off, the effective date is the date of the spin-off. So if a plan is spun off after January 1, 2025, would it not be treated as "newly established" for purposes of new Code section 414A?

When considering spinoffs and plan mergers, what would be considered the date of establishment for the plan that is spun off or for plans that merge. Would it be the establishment date of the original plan? Would these plans be considered new for purposes of the new auto enrollment requirement?