MARYMM

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 employer just started doing this for a group of employees whose positions were eliminated last month. It was also done for what was, as far as I know, a mutually agreed upon separation with a severance agreement executed. In our case, we ensure continued HSA elgibility based on the former employee's participation in the HDHP via COBRA George is correct - there is no FICA savings. Our HSA contributions are made thru a Sec 125 plan, so am I correct that the comparability provision does not apply? Can HR pick and chose to whom they will make the employer HSA contributions ?

An independent contractor who performs services for the firm will receive a 1099 but will not b e partner. A non equity partner will receive a W-2. When I worked for a law firm, they had several non-equity partners. They received K-1's not W2s. Since they didn't have equity, they were not 5% owners. IIRC, they were not key employees either. The use of the term "draws" may be a little confusing. Their draw is not taken in anticipation of their actual income tbd at year end. Their income for the year is fixed and known. It is just characterized as a draw because it is not a salary and is not paid thru payroll.

I don't have citations for you, but this is the same interpretation we are getting from our benefits consultants. Our issue had to do with children over 19 who are not students who now must be covered by group health plans according to CT state law. If a single parent employee has the HDHP/HSA and adds a child to their coverage who is not Federally tax qualified, they can contribute the family deductible max to their HSA.

My state is the 2nd or 3rd to do this. Unmarried dependents up to age 26 are eligible to be covered whether or not they are students or reside with you. For state income tax purposes, coverage of a overage dependent (or a civil union or same-sex marriage partner) has no tax effect. For Federal tax purposes, we need to impute income to the employee for the cost/value of the coverage for the inelgible dependent, withhold taxes and not use the Section 125 Plan for payroll deductions for the coverage. That much we've figured out. What we can't get a definitive answer to is whether that overage dependent can/should be covered under an HDHP/HSA plan . The HSA component is the problem since we contribute most of the deductible ($1500 single, $3000 family) to each employee's HSA. If we have an employee with single HDHP/HSA coverage who adds an "overage" dependent, can/should we contribute $1500 or $3000 to the HSA ? The employee shouldn't use the HSA funds for that overage dependent, but the ee owns and controls that account, not us. There is no TPA to adjudicate claims. If the employee already has family coverage, we still need to impute income for the cost of coverage for the federally inelgible dependent, but the HSA funding question goes away. The employee assumes the risk if they use the HSA funds to pay for pre-deductible expenses of the dependent. Is it actually a company policy issue ? Should our policy be that our contribution to the HSA is based on the number of federally eligible dependents ?

GBurns - that info was in another post made by Alexa. It was a discussion revolving around fronting the employer contribution to the HSA. Sorry for the confusion.

When they first started, there was no limit ! I don't recall when the $5000 limit was added, but it was probably more than 18 years ago.

If you have payroll deductions for health insurance, you may be able to increase participation by the way you price the various choices. Plan design can help, too. If you increase co-pays/deductibles for the non-HDHP plan, you make the HSA look more attractive. Our broker provided us with a web-based tool where the employees could enter their anticpated medical expenditures for the year and see what their out of pocket would be under both options (HMO and HDHP/HSA) You're already making an employer contribution to the HSA which is a good strategy. Do you contribute the entire deductible - or most of it ? That strategy helped here to increase participation and net cost was the same or lower.

Usually the pharmacy can give you the discounted price on the spot. That's what I've been told by HR. Knock on wood, I have not had to use my HSA for any Rx yet. You can pay for them by 1. using a check from your HSA account 2 using the debit card from your HSA account or 3. paying out of your own pocket and then reimbursing yourself using a check from your HSA account. Be sure to keep a file will all bills and receipts for payments made from your HSA for each year. If you are audited and cannot provide backup, the distributions can be taxable income.

Employer contributions to an HSA are allowed. See : http://www.treasury.gov/offices/public-aff...-english-07.pdf I guess I'm confused- page 1 of attached pdf from treasury indicates employer money can go into the HSA as well Yes, employer contributions are definitely allowed. There is another document on that site,"All About HSA's", that also discussses employer contributions Sorry for the confusion, this is my fault. Yes, the employer can contribute. I had a brain freeze when responding earlier. If only employer contributions of 1250 goes into my HSA account on 1/2/2009 and I terminate employment on 1/15/2009, will the 1250 need to be returned to my employer? As I understand it, once the funds are deposited to your HSA, the employer cannot remove them. The employer can ask the former employee to have the funds returned to them. Our HSA vendor has an Excess Contribution option on their Distribution Form that the employee can select to make that request. It is my understanding that if the funds are not returned and the former employee is not in an HDHP plan after 1/31, a portion of the $1250 is taxable to the employee.

Employer contributions to an HSA are allowed. See : http://www.treasury.gov/offices/public-aff...-english-07.pdf I guess I'm confused- page 1 of attached pdf from treasury indicates employer money can go into the HSA as well Yes, employer contributions are definitely allowed. There is another document on that site,"All About HSA's", that also discussses employer contributions

Not correct. See the US Treasury's website for HSA FAQ's http://www.treasury.gov/offices/public-aff...ing.shtml#hsa10 I have an HSA but no longer have HDHP coverage. Can I still use the money that is already in the HSA for medical expenses tax-free? Once funds are deposited into the HSA, the account can be used to pay for qualified medical expenses tax-free, even if you no longer have HDHP coverage. The funds in your account roll over automatically each year and remain indefinitely until used. There is no time limit on using the funds.

Employer contributions to an HSA are allowed. See : http://www.treasury.gov/offices/public-aff...-english-07.pdf

I've been googling a bit more and found some info on the MN and MA state websites. Their laws were effective this year, so they've done the legwork already. Here http://www.co.hennepin.mn.us/portal/site/H...0000f094689RCRD and here http://www.mass.gov/gic/dependent19qanda.html#imputed They are using FMV of the coverage, i.e. the employer's actual premium for single coverage, to determine the imputed income. (An employer I contacted in MN is using the COBRA cost - not sure how they arrived at that yet.) That makes sense. If the ee has an increased contribution for the dependent, it would be after-tax and the imputed income would be the single coverage cost. If there is no increased contribution (already has family coverage), then it is the same imputed income, but no additional premium deduction.

How do you determine the amount of the taxable benefit ? Say an employee has a spouse and 2 dependent children (who qualify under IRS guidelines) in addition to the 21 year old in your example ? The premium charged to the employer is the same whether or not the overage child is covered. A quick look at what NJ did seems to show that they carved out coverage for the overage dependent and assigned a cost to it - a % of the single premium amount. Unfortunately I don't see where CT has done that in the legislation that is effective 1/1/09 Also, I'm assuming that if there is a premium difference (overage child causes coverage to change from single to 2 person) that additional cost can't be paid pretax thru a Sec 125 Plan.

It is possible to have both a 401(k) and a 403(b) but it may not help the HCE since his/her deferrals to both plans combined will be subject to the limit. However, there is a special additional catchup contribution of $3000 available in a 403(b) plan for employees who have 15 years service. See IRS Pub. 571 for details I don't think you can avoid the 5500 since new 403(b) regs were issued.

YOu may be surprised at how many employees drop the dependent coverage since the dependents are covered by the spouse's employer. You don't mention it in your message, but you should do this thru a Sec 125 Plan to soften the blow a little for those who have elect coverage thru you.

I don't think it matters - the plan doesn't care where the money came from. The "fair" thing to do, well, to have done, would be to pay out the vested amount and then increase his capital account to make it up. I've worked at a firm where this was came up fairly regularly. We paid out/rolled over the vested amount but the "make up" was not to the capital account since a distribution from capital would not be taxed. We paid the forfeiture amount to the ex-partner as earnings for the year of termination. It was included in his k-1 for that year so it offset the tax deductions that had been taken when the contributions were made.

Also, the employer cannot provide a Medigap coverage. The employee would be own their own for that

Sounds like the plan design that we have. Does yours cover preventive care at 100% ? That is an option in plan design which we do have. My employer saved so much with this plan that they funded the deductibles in our HSA the first year. We amended our Sec 125 Plan so that employees could contribute pre-tax to the HSA if they wanted to.

Yes, it could be a problem depending on how many employees this company has. I'm rusty on this stuff and can't quickly find the Federal Law that controls this, but here is an explanation of it http://www.adminastar.com/providers/MSP/Pr...WorkingAged.pdf edited to add : I found it in a post I made months ago on another BB. It is TEFRA (TAX EQUALITY AND FISCAL RESPONSIBILITY ACT OF 1982, REVISED 1986) AND DEFRA (DEFICIT REDUCTION ACT OF 1984)

I haven't done Benefits Admin. for almost 2 years but I remember that there was a requirement to notify ee's 15 days in advance of any changes to medical benefits. I'm not sure if it was a State (CT) or Federal requirement, however.

Chloe's scenario is correct. If election is made on 8/1 for Aug. coverage - payment is not due until 9/15 Payment for Sept. is due by 9/30 That being said, some COBRA participants like to get current so that they don't run into any claim denial issues.

Yes, your State or your County Bar Association should have a lawyer referral service. The ABA has a referral link on their website for each state - also links to pro bono legal help: http://www.abanet.org/legalservices/findlegalhelp/home.cfm Ask the current lawyer for an accounting of his time spent so far. He should return to you any portion of the $3000 retainer that he has not earned yet.

I am so sorry to hear this. Brett was very helpful to me when I had a question a few months ago - giving me guidance on the phone and offering to stop in when he was travelling from NJ to CT where his daughter recently started college. Thank you for letting us know.