oriecat

IRS Pub 15-B discusses the exclusion from wages of Accident & Health Benefits and it says that the plan does not need to be in writing. Of course, you probably then also have an ERISA plan which does need to have a written doc, to my knowledge.

Thanks all! I don't know why it wasn't included when the plan was restated, I just know I was told that we decided not to. *shrug*

I'm having a little disagreement. I discovered an employee is over their annual limit already, due to computer error. I say his limit should be $13k, other says $16k due to catch-up. I said our plan doesn't allow it, other says all over 50s can catch-up. The final regs say "An employer is not required to provide for catch-up contributions in any of its plans." Seems cut and dry to me, but I want to make sure I am not missing something. Also, if the plan doesn't allow it, and we allow him to do the 16k anyway, then the whole plan could be in violation, right? Thanks!

My understanding is no, the HDHP and HSA can be the only plans they are enrolled in. At least that was what they told us at a seminar back in February or March, has the recent guidance changed that.

I'm just curious what the point of terminating a plan one day and starting a new one the next would be... why not just amend the plan? What are they wanting to change that couldn't just be amended? It seems fishy to me...

This appears to be a good page for information. You can also sign up to receive updates. http://www.chcf.org/topics/sb2/index.cfm

Good question. I am not positive on this, but I would think you would have to do a short plan year. So if you decide you want to get lined up next Aug, then come January and the new year, you could just let the employee's know that you will be having a short plan year, and they should submit new elections based on a 7 month plan year. Then you would have another open enrollment for the start of the new August plan year.

If your plan year is Aug - July and your cafeteria plan year is calendar, you might want to consider changing your caf plan year to match your ins plan year, so that this type of thing isn't an issue in the future. It is difficult for people to make good FSA estimates if they don't know what their expenses will be each year, and the deductible can be a large portion of that.

I don't personally recall ever seeing a regulation that stated that the employee contributions had to be contributed equally over the plan year. What does the plan doc say? Our plan doc basically says it's pro rata for the plan year, but there is an additional section where the employer can implement a non pro rata contribution schedule, as long as it doesn't relate in any way to how benefits are being paid out.

I'm just curious about where the participants responsibility lies in this. In such a change as you stated above, the change should be very obvious on the paycheck net amount, and it seems to me that the first check where the change wasn't made, the ee should contact the employer about it to correct the situation. (And I wouldn't think a one check delay should then be a problem?) If the ee is negligent in noticing the amount on their check and reporting it, why should the er have to fork out their own money to cover the ee's missed deferrals?

How do you handle DCAP reimbursements after termination? I found an FAQ that said "DCAP expenses continue to be eligible after your termination date, under the "spenddown provision" (spenddown is applicable only to the Dependent Care FSA). However, you may be reimbursed only for the amount fo Dependent Carew that has been taken out of your check. So if your last day of work is Aug 15th, you can file for child care reimbursement until the end of the plan year, but cannot be reimbursed more than the amount that was taken out of your check." I am pretty sure that I researched that and found that it was IRS regulation, but now I can't find it of course. Now I have a termed ee trying to get reimbursed but the TPA says the claims need to have been in within 90 days of termination. So I check the plan doc and SPD. And it is contradictory to me. First it says "You will still be able to request reimbursement for qualifying dependent care expenses for the remainder of the plan year from the balance remaining in your dependent care account at the time of termination of employment." Ok, to me that jibes with the above quote. Then a sentence later it says "You must submit all claims within 90 days of termination of employment." Well if you only have 90 days, then you don't have the rest of the plan year. So I believe we need to make an exception in this case, as I was confused and wrongly informed the employee, but I think we also need to clarify the plan doc so it doesn't seem contradictory, so I am just curious on how others handle this. Does the DCAP have the rest of the plan year, or just a runout from the term date? Thanks

We don't do it at this time. I did have one person ask last fall and started to look into it, but never really got around to it... she went off the plan anyway, no one else has asked. One con would of course be the service fee from the credit card company. I don't know how much those run, and if you're charging the full 2% then maybe it would just be an offset. I know for us, we could have to run it through with our customers purchases, so then there would be an issue for moving the funds around into the proper places, which could be an accounting hassle.

Yes, I believe so, provided the plan document allows for it.

Yeah I agree. My matrix shows no changes allowed to the health FSA for adding or eliminating a benefit, which I think is what this would be.

I am not sure I understand. It sounds like they just have a new eligibility date. I would think that if employees become eligible for a benefit that they weren't eligible for before, then they should be able to make an appropriate election for that...

Yes, I believe a 5500 is required, filing the Schedule A, and whether the plan is part of a 125 has no bearing on that. It would be required either way.

Yeah, I wondered that too, JerseyG. We don't allow any of our disability benefits to be pre-taxed just for that reason.

I wouldn't consider that a change of employment status, I would consider that a change of benefit options. (f)(3)(ii). Addition (or elimination) of benefit package option providing similar coverage. If during a period of coverage a plan adds a new benefit package option or other coverage option (or eliminates an existing benefit package option or other coverage option) the cafeteria plan may permit affected employees to elect the newly-added option (or elect another option if an option has been eliminated) prospectively on a pre-tax basis and make corresponding election changes with respect to other benefit package options providing similar coverage.

Well I heard back from the Trustee office and she said to continue deducting for now. After the meeting of creditors they could decide to require it to be stopped and then I would receive additional instructions.

Would you stop it because it is considered an indebtedness? Some of the posts in older threads made it sound like loans are not considered indebtedness.

It looks to me like SB 2 has been sent to referendum in November.

I have an employee with a 401k loan. Yesterday I received a withholding order for a Chap 13 bankruptcy. The notice says "No deductions should be made or permitted for any wage garnishment, wage assignment, credit union or any other indebtedness.... [snip] deductions required by [snip] insurance, pension, or union dues agreement are not intended to be disturbed." So I am not sure if the 401k loan payment should be stopped. Is it considered an indebtedness? Or would it be seen as a pension agreement? I called the trustee for direction, but have not heard back yet and wanted to get some opinions. I read some previous threads on the subject, but they were confusing and unclear to me, with no concensus among respondents. Has there been any clarification on these points? Thank you.

Just my thoughts, not sure of anything... If the money is coming on the paycheck then it is coming from the employer not the health plan, and it would just be a taxable fringe benefit. COBRA only applies to group health plans so it would not be an issue. I believe the benefit would be taxable, as it doesn't really fall under any of the exclusions (that I can think of). It wouldn't fall under the health benefits exclusion because it isn't paying for any actual medical or health expenses. I also believe that the payments would likely be considered non-discretionary bonuses, and thus required to be included for calculation of the regular rate of pay for overtime purposes.

My understanding, which carries no guarantees, is that there is no specific penalty for not providing them when due, but if something requests them and then you don't provide it within the proscribed time frame then the penalties for failure to provide the requested documents applies. See 29 CFR 2560. According to http://www.seethebenefits.com/CRLframeset8...etirereport.htm "The willful violation of the requirement to provide SPDs, SARs and certain other information requested by participants to the participants can result in a fine of up to $5,000, imprisonment for up to 1 year, or both if the person convicted is an individual. If the person convicted is not an individual (e.g., it is a corporation), the fine can be as high as $100,000. In addition, the failure to provide certain information requested by a participant or beneficiary within 30 days after a request can result in a civil penalty of up to $110 per day. This amount is payable to the participant or beneficiary involved."

I have no actual knowledge on this, this is just my opinion! I think that thinking is wrong. You have no way to know how long this person was addicted to nicotine. Nicotine is a very powerful addiction and could very well take someone a long time to get off of it. If you've been addicted for 20 years, do you think you can successfully kick it in just 6 months? I have no idea, I am not a doctor, that is not my judgment to make. It would be much better for the person to be using the patches than to go back to smoking though.