SLuskin

This sounds like a de minimus fringe benefit that would not have to be considered. Also, I have some employers with on-site daycare that give discounts to their employees and charge full price to non-employees. The discounts are not taken into account when figuring the $5000.

If the participant is rehired within 30 days, he steps back into his original election. If the participant is rehired after 30 days, then the employer has several choices, and they should be stated in the document.

The software that we use tracks that. Otherwise, it would be a nightmare, and yes, you expressed the concepts correctly.

My son is a licensed massage therapist who works on people with repetitive stress injuries. We have been accepting receipts from the therapists as long as they include the nature of the injury, i.e. back pain, shoulder pain, chronic headaches. One thing the IRS does not allow (unfortunately, because it is great for this) is massage therapy for stress reduction.

You have to test the whole controlled group as if it were a single employer. So, you might have some problem with the eligibility test and the availability test. How many employers are involved in this group, and how many employees in each? Are there more highly comp in the group that wants the flexible spending accounts?

George, I have only 1 client that is a Real Estate agency. They do not permit the agents to participate in any of the benefits because they are independent contractors. Alot might depend on their contracts. If you remember the Microsoft case, the contractors were treated like employees for purposes of hours worked, projects they worked on, who they reported to, etc. So the IRS determined that they were, in fact, employees, and needed to participate in the 401K (don't recall if other benefits were involved in this ruling).

Gloria, how large is the company that you work for? Do they have a method of filing a grievance in your Employee Handbook? It does not sound as if they are treating you fairly, looking at your side of the story. Many plan documents provide for "evergreen" for premiums only. I have not seen one that does so for the flexible spending accounts. And I do believe that everyone must be offered the opportunity to enroll. Of course, you could always contact the Department of Labor, but you might want to have another job lined up in that case.

If you shop hard enough for an attorney, you can find one who will say pretty much anything that you want. On this point, however, this attorney is incorrect.

I don't think you can properly reimburse that expense pretax as an expense.

Alexa, are the plan years the same? Do you have more than 100 participants in the medical reimbursement account? Are your definitions of eligibility and "participant" the same? Certainly this is one way to do it, but answer is the same for many IRS type questions, which is "It depends."

It will qualify if the employee has a choice of whether or not to pretax that 20%. It will also qualify if the employee is given any sort of cash for not participating in the plan. Is there also an option to add coverage for dependents and pretax that, or is this an "employee only" insurance plan?

I think the regs are pretty clear that you can't change the medical FSA due to a change in the employer-provided health insurance benefit. You can change the dollar amount of the premium, and you can choose other insurance if available, but not the flexible spending accounts. Same idea holds here. Say an employer adds a new dental insurance benefit mid plan year. An employee has elected a certain amount based on dental needs, and no insurance. If the employee elects the dental insurance, then she would no longer need such a large amount in the medical FSA. She still can't change the election.

Most of the employers I work with want to save the matching FICA, and that is one of the motivators for them to put the plan in in the first place. In addition, Social Security may not be there in any recognizable form for the younger workers. We also tell the employees to take just some of the savings generated by the cafeteria plan and put it into their 401K or other type of retirement plan. Surely they can do better for themselves than the government can.

We have been administering Cafeteria Plans since 1990. About 1 1/2 years ago, we switched to DataPath. I am very happy with the program, and even happier with the customer support. Everyone there is very knowledgeable and very nice as well. Our clients liked the switch too.

In a change from a previous response that I made to a similar question, there was a letter to the editor in today's Employee Benefits Weekly saying that absent the strong possibility that the blood would be needed (either for a sibling already in need or else known family medical problems), that this would not be a reimbursable expense. I had read somewhere before that it was, but apparently it is one of those that the answer is "it depends".

You need to see how your plan document addresses rehires. If the rehire happens within 30 days, the employee moves back into her previous election. Otherwise, there are several choices, but your document must specify.

Yes, employment related daycare can also apply to a spouse or other dependent who is incapable of self care. It's the same section 129 of the code as the child care.

Actually, if the plan document provides for a separate reimbursement account for private individual health insurance premiums, you can pretax those premiums.

In addition, the former spouse could have had an FSA at his job for a portion of her or kids' expenses, and now has lost that benefit. We do think that the increase effective date should be the date that you use for the expenses.

Yes, all employer and employee contributions to the flex accounts need to be taken into consideration for all the tests. I have a number of employers who contribute to the FSAs, specifically to make some of the tests pass.

Thank you. I called the DOL and they told me no financial schedules and no audit. So the form was pretty easy to prepare after all.

We use equity partners. The income partners are not actually owners of the company.

Also, you have to look in the plan document. Some plans are written so that you have to be in the cafeteria plan if you want to be in the health insurance plan. Some plans are written that the employee has a choice. In either case, what this guy wants to do doesn't look right.

The employer should surely know that the employee is out on leave. and the HR department, if any, should know that the employee is not eligible for daycare while on leave. If no HR dept, then the Section 125 Plan consultant that they deal with should have some kind of avenue of communication for this type of thing. I don't believe the ee has to sign anything if out on upaid leave. but it wouldn't hurt to institute the procedure.

Help! I have never done one of these before. I usually just do the Cafeteria Plan and fully insured group medical plans. There were 117 participants at plan year end. First year of self-funding, and also the last - client hated it. Do I need a schedule H or I? Does the return need an audit? How do I find out exactly what questions to answer?? Any help is greatly appreciated.