MARYMM

We are a CT employer and have had to cover dependent children to age 26 on our health insurance since 1/1/09. There are a dozen or so states that have this mandate. The PPACA (Health Insurance Reform Act) that was signed into law 3/23/10 will extend this coverage to all states effective 6 months from 3/23/10. In the Reconciliation Act, there is a provision that makes this coverage non-taxable. One bulletin I rec'd says this is effective immediately. A blurb on the website of The Journal of Accountancy confirms that the Reconciliation Act changed the definition of dependent for purposes of IRC Sec 105(b) but does not mention an effective date. This would mean that we no longer have to impute income for the value of the coverage. It also appears that medical expenses for these "adult dependents" could be reimbursed from an FSA/HRA/HSA. Has anyone else looked into this? What have you concluded ?

The US Treasury Dept has a website with lots of good info on HSA's. http://www.treasury.gov/offices/public-affairs/hsa/. I looked at their FAQ's and found some answers for you : 1) No - I’m on Medicare, can I have an HSA? You are not eligible for an HSA after you have enrolled in Medicare. If you had an HSA before you enrolled in Medicare, you can keep it. However, you cannot continue to make contributions to an HSA after you enroll in Medicare. 2) and 3) No Who is eligible for a Health Savings Account? To be eligible for a Health Savings Account, an individual must be covered by a HSA-qualified High Deductible Health Plan (HDHP) and must not be covered by other health insurance that is not an HDHP. Certain types of insurance are not considered “health insurance” (see below) and will not jeopardize your eligibility for an HSA.

The benefits broker that I worked with when I was involved in benefits admin at a prior job has such a tool . not sure if it is proprietary http://www.ovationdsc.com/moreinfo.php

When I worked for a law firm partnership, we had separate election forms for staff and partners because they had different pay periods (biweekly and monthly). All elections were for flat deferral amounts - probably because we made the 401(k) contributions to the Plan before the monthly draw amount was finalized. We only took deferrals from the monthly draws, never from the supplemental ones.

Employer has 401k and 403b Plans. After year end it is discovered that the deferral limits were not updated in the payroll system for several employees. This caused their deferrals to stop at $15,500 instead of $16,500 which is what they elected. How is this corrected ? Does the employer make contributions to the plans ? Is it 50% of the missed deferrals ? Thanks

Yes, you can keep them both. Just be sure to amend your plan documents to eliminate the FSA and add the HSA ( assuming empkoyees will be contributing pre-tax to their HSA Accounts)

If you determine that it is allowed, don't forget that the fair market value of the prize is taxable income for the employee

THe other thing to watch for is any deferral limit the plan might have such as 50% of comp. You could have someone defer the 402(g) max in their 1st paycheck and then leave employment - unexpectedly !

I think that because the account balance is positive, you do have to offer COBRA -but no payments would be due from the employee. IIRC, the employee can only be reimbursed for expenses incurred before termination unless they elect COBRA. If the employee does elect, they can can be reimbursed for expenses post-termination thru plan year end. But I agree with leveena - check your plan document to determine when the employee is no longer a participant

If this is a qualifying event and the employee has a positive account balance in the FSA account, a COBRA continuation offer should be made. Are you offering COBRA for health insurance ?

So sorry - I just added the link to the original post. The benefit is entirely employer funded. There are restrictions if the employee is also receiving transit pass or van pool benefit

Bicycle benefits are not a pre-tax option but are tax free. Here's a link to ADP's newsletter which discusses this benefit and the limitations on it. edited to add link http://www.adp.com/tools-and-resources/new...tober_2008.ashx

Does your plan document address this ? Ours states that they are forfeitures Q-26. What happens to unclaimed reimbursements? Any reimbursements that are unclaimed (e.g., un-cashed benefit checks) by the close of the Plan Year following the Plan Year in which the Eligible Expense was incurred shall be forfeited.

I believe that this is NOT allowed. You cannot drop your elections without a qualifying change in status. There are no hardship provisions in Section 125. I agree- but there is an exception for HSA contributions made thru a Sec 125 Plan.

There may be other reasons for plan amendments besides the actual Sec. 125 regulations. For example ,some Sec. 125 Plan amendments may be required for the SCHIP law which was passed earlier this year.

good question. I don't see a clear answer in the bill or on this website which has FAQ's on it http://www.ins.state.ny.us/health/S6030_Age29.htm Here is what was done in CT (where we only have to cover them thru age 25 not 29): 17. Does this change in dependent definition apply only to medical? Would dental, vision, and prescription drug coverage also qualify? All Connecticut individual and group medical policies are required to follow the new dependent definition. If the dental, vision or prescription drug coverage is combined with the group health benefits in a policy or a rider to a policy, the new dependent definition would also apply. However, if the dental, vision or prescription drug coverage is “free-standing” in a separate policy, these new rules are optional for the health insurer for those benefits. You might want to contact the insurer or the NY State Insurance Dept. for clarification of NY's position on this. I see that that NY did not exclude the imputed income on this coverage from NY State Income tax as MA did. CT didn't either.

Would state laws be applicable ? I thought one of the benefits of self-insuring was that the plan did not have to cover state mandated benefits.

I don't have a cite handy for this, but I've read that the FMV is the single COBRA cost of the coverage. For a domestic partner situation this maybe almost the same as the difference between single and 2 person coverage. But several states (MA, MN, CT and IA are the ones I am aware of ) are now mandating coverage for overage dependents. We need to figure out the FMV value of coverage for an overage child when the employee already has family coverage and there was no incremental cost for this dependent. We are planning to use the single COBRA cost. edited to add : see last paragraph in this article http://www.davisbrownlaw.com/documents/new...4E653C6AB0B.pdf

Not sure if this falls under HIPAA or not . But what we are doing is this. I do payroll tax deposits and I have requested that HR send me a report each month of # of AEI's and the premium credit amount. I've given them a copy of the IRS guidance on what detailed info is to be retained and they are going to keep that backup info in their files. http://www.irs.gov/newsroom/article/0,,id=205376,00.html I'll ask them to give me a quarterly recap and I'll reconcile that to the monthly totals as part of my 941 prep process

I was looking for something similar recently and found this http://www.jacksonlewis.com/articles/1005_Bender.pdf It is a little old

I thought the subsidy only applied to Federal COBRA, not state continuation programs

The COBRA premium for an HDHP would be 102% of the premium. I think you are asking about the HSA which the employer in this case is funding. HSA's are not subject to COBRA http://www.irs.gov/pub/irs-drop/n-04-2.pdf Q-35. Are HSAs subject to COBRA continuation coverage under section 4980B? A-35. No. Like Archer MSAs, HSAs are not subject to COBRA continuation coverage. However, the terminated employee can continue to fund the HSA on their own if they choose to.

Note that employers generally cannot provide direct cash reimbursements to employees for transit passes unless the "Readily Available" test is passed (or failed, depending on your perspective). If transit vouchers are readily available, many employers don't offer transit passes because of the administrative headaches involved. Its been a few years since I adminsitered a Sec 132 Plan, but IIRC there was also a "cost test" the employer could pass/fail. If there were fees involved in obtaining vouchers or passes, the employer could do reimbursements to employees.

This would not affect Medicare taxes. If they are wrong, something else was done incorrectly. This only affects FIT and SIT wages. How to avoid this in the future ? Can you insist on getting a payroll report of some sort (such as a withholding register) when contributions are submitted? I would also be concerned about constructive receipt. Was the entire $15500 deducted from one paycheck? Or did owner write a personal check ?

Allen - the claims you enumerate are preventive procedures and that is why they are covered prior to your deductible being met. Alexa - you need to address your question to your insurance broker. My question was is it legal to design your HSA this way? Someone here at the office said it was required in the HSA regs. Can you provide a cite if optional? thanks Actually, it is the HDHP design that you are asking about and since it is an insurance product, I suggested that you ask your broker. Most HDHP's seem to use the aggregate deductible but I think they can be designed so that if a family member meets the single deductible, their further expenses are covered. This topic is dicussed here too: http://benefitslink.com/boards/lofiversion...php/t31542.html Apparently, the embedded single deductible has to be at least the minimum statutory family deductible amount. Of course, the premiums would be impacted by this change.