leevena

I have never heard of any regulation that requires any employer to offer only 1 plan, so I believe it is legal, but will defer to others. Aside from that, I am curious as to why an employer would have the need for multiple vendors. A 125 is relatively easy to implement and operate, with relatively few benefits. Can you expand on why the need for 2nd vendor?

Ruby, I sent Pete an email about this. Lee

Should not be a problem, why do you ask...do you believe there is an issue?

Any email with PHI should be sent encrypted and secured.

Never heard that, nor can I find anything about...but I will defer to you on this. Thanks for the new info.

I disagree. If plan is cancelled, the employee is no longer a participant and forfeits the funds. Dependent care is not an ERISA plan.

See page 17. Balance in an FSA Flexible spending arrangements are generally “use-it-or-lose-it” plans. This means that amounts in the account at the end of the plan year generally can’t be car- ried over to the next year. However, the plan can provide for either a grace period or a carryover. The plan can provide for a grace period of up to 21 2 months after the end of the plan year. If there is a grace period, any qualified medical expenses incurred in that period can be paid from any amounts left in the account at the end of the previous year. Your employer isn’t permitted to refund any part of the balance to you. See Qualified reservist distribution, earlier.

https://www.irs.gov/pub/irs-pdf/p969.pdf

I am assuming you are referencing a medical FSA. The medical FSA plan can have either a grace period or rollover provision. Since the employer is going out of business I assume the plan will be terminated off anniversary, and as such the rollover is not an issue. Any unused funds are the employers. By the way, just realized the original post was from 2 years ago. Sorry.

I am 99% confident that the employee loses the money. Unlike medical FSA, there are no provisions for continuation after a termination, either an employee termination or plan termination.

To be eligible for a HSA, the person must have a qualified HDHP. I have never seen a MEC that is also a HDHP, so the answer is they are not eligible for the HSA. I am not familiar with EPP, sorry.

Really? I do not do much 125 work, but I did receive information from 2 different tpa’s with the new numbers. Oh well, live and learn. Thanks.

Already released. $3,500 individual and $7,000 family.

I am assuming the group is not in a state that requires under-20 continuation. Highly unlikely the carrier would allow, but you can ask.

Hi Guys. I understand your skepticism. Over the years I have used Cornell law as my main source of information, as well as a variety of legal/consulting sources. See below. Lee https://frenkelbenefits.com/frenkel2015/wp-content/uploads/Compliance-Update-9-4-2018-Cafeteria-Plans-Section-105h-NonDisc-Rules.pdf https://www.law.cornell.edu/cfr/text/26/1.105-11

Ok, you may be correct. When you say paid, I take that as income, and if the employer increases the HCI income by $500 per month, there is no Section 105 issue. If the employer decreases the HCI contribution by $500 per month, then there is a Section 105 issue.

Believe we may be confusing how the amount of penalty is being calculated, or maybe I am not understanding the question. Btw, I would be that I am not understanding the question. Lol. In COBRA the penalty ( if you will) is the added tax that is incurred. By way of example, if the COBRA cost is $500 and the employee tax is $50, the penalty is $50, which is included in their payment to make them whole. Correct? Failure of the Benefits Test the plan calculates the excess reimbursement by determining the benefit available to HCIs that is not available to non-HCIs. For example, assume a plan has a new hire waiting period of 90 days for most employees, but coverage for executives is effective on the date of hire. The excess would be 3 months of premium. The penalty in your scenario would be the value difference the HCI received.

Self-Insured Medical Plan is discriminatory as to benefits, the amount included in gross income is the amount reimbursed to an HCI for the discriminatory benefits, referred to as the “excess reimbursement.” If a benefit is available only to one or more HCIs and not to all other participants, the total amount reimbursed to the HCIs for that benefit is includible in gross income (it is all excess reimbursement). This is not the best way to communicate, so please bear with me. Believe you may be confusing some issues. When an employer subsidizes COBRA there is no legal discrimination issues because it is not a prohibited action. It is a taxable event because it is not technicallly a premium payment. The example you described, the CEO, is discriminatory and will result in a penalty, as I described above. I see no way around it. As for your “stark example” above, yes there are many discriminatory issues. Additionally you will have participation issues. Keep in mind, I am addressing Section 105 issues. You will almost certainly have discrimination issues with your 125 plan.

Self-Insured Medical Plan is discriminatory as to benefits, the amount included in gross income is the amount reimbursed to an HCI for the discriminatory benefits, referred to as the “excess reimbursement.” If a benefit is available only to one or more HCIs and not to all other participants, the total amount reimbursed to the HCIs for that benefit is includible in gross income (it is all excess reimbursement).

Chaz, the HCEs or Key Employees must include in taxable income the highest aggregate value of taxable benefits that could have been chosen for the year, regardless of actual elections. So, what is the value of the highest cost benefit he could have selected, single coverage, family, etc. Good luck.

Makes sense now.

We use a combination of; biometric testing, education, counseling, and financial incentives.

Little confused also. A QDRO is used to divide assets when a couple are divorcing. An HRA is an employer account funded with employer money, and therefore not an asset of the employee. Am I missing something.

From an arms length, it looks ok. Cannot comment on other member of household, I do group only, not individual.

Need to do non-discrimination testing. Normal rules apply.