LABenefits

If erroneous pension annuity payments from a defined benefit plan (no beneficiary or joint and survivor annuity at issue) are made following a retirant's death due to late death notification and the plan administrator is unable to recoup from the estate, would a 1099-R be issued to the estate (no information is available as to estate tax id)? Is there a way to adjust the withholding that was submitted on future deposits or obtain a refund of the withheld amount-- through a 945-X (although instructions state it's limited to clerical errors) or other means-- because no party had a legally binding right to the payments after death? This has to be a common scenario, yet I haven't found guidance directly addressing the death overpayment situation (only guidance addressing overpayments to living retirants/participants).

I'm looking for service provider recommendations to determine Creditable Coverage re: Medicare Part D. We have a client who has a high deductible health plan combined with an HRA that needs to obtain an actuarial determination as soon as possible. It's a small client (roughly 45 employees) so any referrals to firms that are affordable (if at all possible) would be greatly appreciated. Thank you.

Thank you, Brian. I agree.

Given sparsity of guidance applying IRC 414 controlled group, affiliated service group rules to 501(c)(3) organizations, in this case, specifically as it pertains to employer eligibility to offer QSEHRA for ACA purposes given 50 FTE cut-off, I'm looking for reactions to the following situation: employer currently offers QSEHRA, has under 50 FTEs but is nearing that mark. The employer is a 501(c)(3) corporation so no stock ownership. The employer runs a school for troubled youth as well as a thrift store (all within the same corporation). Proceeds from the thrift store support school operations. The 501(c)(3) can't afford offering ACA compliant health coverage so it is looking for ways to stay under the 50 FTE, including separating the thrift store into separate entity. Boards would be under 80% commonality/control to avoid Treas. Reg. 1.414(c)-5 (imposing 80% board overlap/control test on 501(c)(3) orgs). However, even if thrift store is spun off in this way, all the thrift store revenues would continue to be distributed to the school. I need to trace through the 501(c)(3) supporting organization requirements if the thrift store were to be spun off into a separate org, but assuming we can structure and meet those requirements and stay under 80% common board overlap/control, I'm concerned with applicable of the "anti-abuse rule" for ACA purposes, which reads as follows: "Anti-abuse rule.— In any case in which the Commissioner determines that the structure of one or more exempt organizations (which may include an exempt organization and an entity that is not exempt from income tax) or the positions taken by those organizations has the effect of avoiding or evading any requirements imposed under section 401(a), 403(b), or 457(b), or any applicable section (as defined in section 414(t)), or any other provision for which section 414(c) applies, the Commissioner may treat an entity as under common control with the exempt organization." Any thoughts or reactions to this fact pattern for ACA purposes? Or any ideas for 501(c)(3) ACA-compliant health plan options that might be affordable?

Thank you, Brian. I agree that we will need to be sure that the different classes of retirees are clearly distinguished in the Plan document and that no actives/re-hires are included in the retiree-only HRA. I wanted to be sure I wasn't missing something if we put all retirees under one retiree-only HRA and that there wasn't a clear advantage to keeping the 55-65s combined with the active employees. Again, I'm so appreciative of your feedback.

I have one follow-up question regarding establishing a retiree-only HRA (breaking it out in the documentation as separate from the current plan that covers both active employees and retirees). There are two groups of retirees: (1) those between 55 and 65 who continue to be eligible to participate in group coverage to the same extent as an active employee (they also receive an annual contribution in the same amount as active employees); and (2) retirees 65 and above who are no longer eligible to participate in the employer's group health plan, no longer receive any HRA annual contribution, but who can use accumulated account balances for permissible reimbursements. My thought is that the new retiree-only HRA would cover both groups of retirees,. Is there any reason not to put both groups in one retiree-only HRA? I want to make sure I'm not missing anything. Thanks.

Sorry Brian -- I typed Steve by mistake! Thank you, Brian!

Thank you, Steve. This is one of those difficult compliance situations. We'll cut off the risk going forward and go from there. Thank you again--appreciate your input very much.

Thank you so much for your response and input, Brian. That is the conclusion I've come to as well given the lack of reference in Notice 2015-17 to Medicare Advantage premiums. I'm concerned with regard to past operation and plan documentation given the severity of the ACA penalties. Although I'm not sure if the employer's past operation and administration of HRA has changed in terms of the types of premiums it has reimbursed, the HRA plan documentation I've reviewed includes premium reimbursement language for retirees going back at least 8 years. Any thoughts on how to best address or limit past potential ACA penalties in this regards? I appreciate your input, Brian! Thank you again.

I'm reviewing an HRA plan document that includes both active employees and retirees as participants. ACA compliance is through integration with employer's group health plan. At age 65, retiree group is no longer eligible to participate in employer's group health plan. No new employer contributions are made to HRA at age 65 and up, but these retirees can use rolled over account balance to obtain reimbursement for medical expenses and premiums. Employer is reimbursing retirees for Medicare Advantage premiums. While reimbursement of premiums for individual market coverage is clearly prohibited in terms of ACA integration rules (Notice 2015-87), is reimbursement of Medicare Advantage premiums considered individual coverage under existing guidance? Is there any way to argue that this is a permissible arrangement for ACA compliance purposes? Or any way to argue that the retiree reimbursement provisions can be treated as a separate group health plan thereby utlizing the retiree-only exemption, even though the retirees are referenced in the existing plan and SPD that relies upon group health plan integration? (Employer has a wrap plan for ERISA reporting/disclosure purposes). Given the severity of ACA penalties, we're looking for any helpful guidance insight on this issue. Thanks.