SLuskin

My understanding is that dental and vision benefits are defined as excepted benefits, whether fully insured or HRA.

Sure, Guapo. my email is susan@div125.com. Send me an email and I will forward you what I got.

Thanks. I am surprised we haven't been inundated with stuff about this from all the subscriptions that we have. We do prepare the Welfare SPD and Wrap Documents, and our attorney has given us the language for this, so now the small clients have the choice of either having the welfare spd (which they are required to have but generally do not) or the 5500.

You are correct. If you have a plan that starts July 1, 2012, you can have a medical FSA cap of more than $2500. However, for the plan year which starts July 1, 2013, the plan will have to be amended to reduce that cap to $2500.

Has anyone had a small fully insured plan penalized because they didn't file a Welfare 5500 and they didn't have a Welfare SPD which spells out the "refund allocation" language? See below, which one of our clients received from the IRS. Thanks. If you have fewer than 100 participants on your group welfare benefit plan(s) you are exempt from filing a Form 5500 provided you have an SPD in place with the appropriate "refund allocation" language. The Form 5500 filing exemption may be lost if a Plan Sponsor does not disclose how insurer refunds are allocated. This can be problematic because many small employers do not prepare and distribute an SPD containing this language, nor do they file a Form 5500-relying on the small plan exemption. However, failure to prepare and file Form 5500 by the deadline can result in a DOL penalty of up to $1,100/day.

I agree.

We are on the same page, George. I sent her what I had and then asked her to show me where she was looking. The 2011 version of Publication 969 is the most recent one. She has alot vested in being correct because she had everyone do that at her former employer. I would actually not mind her being correct either, as we could use that for marketing if it were true.

Her husband retired from his job and she moved from his health plan to her company's plan. She had a choice of a copay plan or an hDHP plan. That's definitely ok. However, she has a general purpose FSA which is a calendar year plan. She has a balance in that account of $800. I am questioning her ability to move that into a limited FSA midyear. I have never heard of that.

Has anyone heard of a rollover from an FSA to an HSA that does NOT have to follow the rule of: the lesser of the balance on September 21, 2006 or current plan year end balance? Client is saying the 2006 requirement was done away with. The 2011 Publication 969 still contains that requirement. Thanks.

An employer has both a general purpose FSA and a limited purpose FSA. We just got an email from the employer saying that an employee has had a status change and is moving from the copay plan to the HDHP plan. She wants to change her general purpose FSA to a limited FSA and start making contributions into the HSA instead. Has anyone ever heard of anything like that? I have not. Thanks.

No, I don't think so. This was covered in an advanced Cafeteria Plan seminar that I attended, put on by EBIA. It's the same as if they made after tax contributions via check while they were out on leave.

Agreed.

In an FSA, a child is considered to be the dependent of both parents. regardless of where the child lives and regardless of who claims the child on the federal income tax return. The only thing you cannot do is double dip. So, as long as the parent is paying the medical expense for that child, it can be properly submitted to the FSA for reimbursement. This was true long before the age 27 item referred to above.

FSA reimbursement is based on date of service and not date of payment. I would only allow this in the year the lasik surgery was actually performed.

We sell these all the time. The employer has to offer the FSA. Lots of people get confused and think that HDHP means HSA. However, it's just a health insurance plan. If you have a true HDHP, employers CAN offer FSA, HRA and HSA. If they do offer the HSA along with one of the other consumer directed plans, then you have to follow specific rules about what expenses can be reimbursed in the FSA or HRA. However, if the HSA trust account is not offered, then you can have a "general purpose" FSA or HRA.

For ASO plans, how do you know if you need a Schedule A or a Schedule C? Last year, the carrier sent us information for a Schedule A and this year they are saying we only have to prepare a Schedule C. From what I can tell, the plan design hasn't changed. They are saying the requirements have changed. Thank you for your help.

Could you not let them finish their plan year, and then become newly eligible for yours? It would be mid year but that should comply with both sets of plan documents.

My company administers Section 125 plans and we do not give the option of medical FSA/DCAP rollovers for all the reasons correctly stated abouve.

It's all employer money. You can get the document from a competent plan services provider. No 5500 if not set up with a trust and less than 100 participants.

The daycare expenses incurred have to be employment related. So, if you are not currently employed and not looking for a job, you could not submit for expenses incurred after September 1.

No, this is not a group plan sponsored by the employer.

We have had employer matches in DCAP but never determined by age of child. Also, of course, employer plus employee contribution could not exceed $5000 for plan or calendar year. I think if you did the dcap testing and it passed that this might be workable.

You cannot do anything retroactive in a cafeteria plan. So, look at what the status change is - birth of a child - hasn't happened yet. Unpaid leave of absense (for the birth of a child) ok. But the increase in election can only go toward prospective expenses, not expenses that have already occurred, but the participant didn't have the foresight to elect during the election period. I just don't see any real way for the participant to be reimbursed for expenses which have already been incurred, but were in excess of an election made at the beginning of the plan year.

I agree.

We have the whole EBIA suite and attend their conferences. I also use 2 law firms when things get sticky and you actually need to talk to someone.