oriecat

Is it possible to allow a terminated employee who is receiving severance pay to continue their 401k loan payments from the severance so that the loan will not go into default upon termination, but upon discontinuance of receiving pay? EE has a large loan balance of almost 30k and owner is very concerned about it going into default and she would owe the taxes and penalty. She will be receiving severance for one year. Is there anything we can do? I am certain that he would be willing to make any plan amendments necessary if there is some way to deal with this. Thanks for any thoughts!

I personally don't see how that could be considered a change in cost. Whether you pay a $20 premium pre-tax or after-tax, it is still a $20 premium. What changes are your taxes.

So if an overage dependent has coverage through an employer you want to exclude them, but if they have coverage through an employer and also are a full time student, you don't? Am I understanding that right? Why would you want to make that distinction?

I believe it is not directly because of HC reform, but indirectly due to the IRS changes that were made to coincide with the requirement of allowing dependents to stay on up to age 26. So that those overage dependents premiums wouldn't be taxable, the IRS issued Notice 2010-38 which excludes from taxable the medical expenses of dependents under age 27. So this would apply to the flex plan, as long as the flex plan is amended to include the overage dependents. http://www.mwe.com/index.cfm/fuseaction/pu...2ceff321784.cfm

Seriously! It is ridiculous to me to think that a 401k auditor thinks the payroll schedule will revolve around them. Companies have to pay based on their established schedule, what do they expect you to tell employees "Sorry, yes we should have our bi-weekly paycheck this week, but we can't because the 401k might not get posted on timely. See you next year."??

From the DOL http://www.dol.gov/ebsa/faqs/faq_compliance_hipaa.html Bold added by me.

Agreed. If your employee did not actually lose other coverage, then she would not have a HIPAA qualifying event for special enrollment. Her time frame for HIPAA special enrollment for the marriage and birth already passed, so loss of coverage is her only option at this time and it doesn't apply. This is assuming that when she waived coverage she was given proper notice of her HIPAA special enrollment rights so she understood how it worked and the time frames.

I believe he means 31 days from the loss of another coverage to then get back onto Company A. Like the 30 days you generally have to request special enrollment due to a HIPAA event.

Because it's a plan year, not a plan half year.

Do you have a link or quote of these regs? The section of PPACA that David Rigby quoted said available for the child, not to the child, and I think that might be an important distinction.

My TPA has a special form that covers this situation. It allows the participant to elect whether to make up the contributions, which can be done as a lump sum or spread over the rest of the plan year, or just resume them (which would alter the annual election). Do you have a TPA to discuss this with? Have you checked your plan doc to see if it addresses it?

But how can Medicare pay first if she is not enrolled? Or did I misunderstand something? EDIT: Unless she was also automatically enrolled in Part A, like the first poster. I forgot about that part.

Employment information is not PHI, and employers aren't covered entities. I don't see how HIPAA has anything to do with this.

The regs on short payments: 54.4980B-8 (d) If timely payment is made to the plan in an amount that is not significantly less than the amount the plan requires to be paid for a period of coverage, then the amount paid is deemed to satisfy the plan's requirement for the amount that must be paid, unless the plan notifies the qualified beneficiary of the amount of the deficiency and grants a reasonable period of time for payment of the deficiency to be made. For this purpose, as a safe harbor, 30 days after the date the notice is provided is deemed to be a reasonable period of time. An amount is not significantly less than the amount the plan requires to be paid for a period of coverage if and only if the shortfall is no greater than the lesser of the following two amounts: (1) Fifty dollars (or such other amount as the Commissioner may provide in a revenue ruling, notice, or other guidance published in the Internal Revenue Bulletin (see §601.601(d)(2)(ii) of this chapter)); or (2) 10 percent of the amount the plan requires to be paid.

Sounds like it. http://www.dol.gov/ebsa/pdf/dependentcoverage.pdf

I would think they could certainly drop the coverage at any time. By revoking their election, they will stop paying for it, and I think most policies have a provision that coverage ends when the premium isn't paid. But in terms of enrolling, that would depend upon the policy and how the carrier handles it. They might not allow enrollments at any time.

This is the 3rd time you've posted this. It's starting to feel like you're spamming us.

Yeah, it should only be about $3k to correct, I think. Definitely not happy it happened, but could have been much worse. And if we're gonna give anybody free money, might as well be someone like him, instead of a highly paid salesman or something who would have known to say something.

Actually he's an immigrant making about $10 an hour and I don't think he ever looks at his paystubs, as he probably can't read them.

Great. Thank you, Jim.

Employee elected 15% in January 2009. This somehow didn't get printed in the payroll office and the employee never mentioned that his deferrals never started. This comes to light in May when he is talking to the financial advisor and his account balance is zero. We are being advised that the proper corrective action is to fund his account with 50% of the deferrals that should have occurred and 100% of the missing match, adjusted for any growth. Is this correct? I thought I read something about missed deferrals being at the average rate of the ADP test or something like that, but it's very likely that I misunderstood or that that is for something else. Thank you.

Revenue Ruling 2002-27?

Ditto. We have to wait for someone (whoever will be in charge of this? HHS?) to issue regulations and premiums and stuff.

See if this helps http://benefitslink.com/boards/index.php?showtopic=45476

Thanks Andy!