Peter Gulia

Belgarath's question is apt. In your experience, does an insurance company or trust company respect an employer's choice not to be involved (beyond furnishing factual information in the employer's control) in claims decisions? And let's ask the flip-side question about who relents: If an employer refuses to decide a claim, how often does an insurance company or trust company back down and decide something without an employer's instruction?

ESOP Guy, thank you for helping me. Independent appraiser, independent fiduciary, and independent counsel for the independent fiduciary; that's strongest.

We recognize that an employer seeking a correction regarding the plan would have different circumstances. But what about the one individual seeking a closing agreement only for herself?

Imagine the taxpayer engages a lawyer to propose (without revealing the client's identity) a closing agreement with these provisions: (1) for all back years, the taxpayer is treated as if she met her minimum-distribution requirements from her 403(b)s; (2) the taxpayer pays a sanction in some modest amount (perhaps $100 x the number of affected years, or $1,000). Do you think the Internal Revenue Service would accept such an offer?

ESOP Guy, when you say most examinations end with no DoL enforcement action, am I right in guessing that this refers to examinations that you know about (or have heard about from practitioner friends)? One imagines that other plans, about which an employer or fiduciary might have been less well advised than what you or your friends would do, could have a higher likelihood of unwelcome outcomes. For a situation in which a top executive sold his or her stock to a plan that was long established, what does an EBSA examiner look for to find that the plan didn't overpay?

Why not just amend the plan's governing document each time the employer declares a contribution and decides how to allocate it?

As others here have noted, it seems that the nuances of defining normal retirement age might matter if the employer might hire (or rehire) a middle-age person who might reach the relevant age without having completed enough vesting service for a fully vested benefit.

Without meaning to diminish a discussion about how text choices can affect provisions in a way that a document's adopter might not understand (and might not intend): If a 401(k) plan's terms permit a retirement distribution before a participant's normal retirement age and do not require a distribution until a participant's age 70-1/2 (or even later if a non-owner employee has not ended her work for the employer), is it likely that a participant's normal retirement age triggers only an election (or deemed election) to delay a distribution? Is there anything else that turns on the happening or non-occurrence of a participant's normal retirement age?

Which States have a State income tax treatment for Roth 403(b) amounts that differs from the Federal income tax treatment?

Which States have a State income tax treatment for Roth 401(k) amounts that differs from the Federal income tax treatment?

KJohnson, thank you! In addition to anti-assignment provisions, is anyone seeing a health plan impose restrictions or conditions on who may act as a claimant's representative?

I continue to care about this issue because to me it seems strange to deny an otherwise available tax treatment merely because a corporation buys individual insurance rather than group insurance. It seems especially harsh if State insurance law makes it impossible to buy group insurance (for example, if shareholder-employees don't count in defining whether a group exists). I haven't analyzed how the tax law sorts out because the circumstances in which this problem happens typically don't have enough money at risk that a client would pay me to do the necessary research (and I'm too poor to use the time just to satisfy my curiosity).

Is the natural impulse of insurance companies to push things into standardized boxes another reason for an employer that has 50 full-time-equivalent employees to abandon health insurance and go "self-funded"?

jpod, thank you for the help. I told my inquirer (who is not the employer) that, if the health plan uses health insurance, a State's insurance law or even an insurer's contract terms could involve requirements or conditions about which employees form a group. Also, I told my inquirer to invite the employer to reevaluate how carefully it had evaluated its liability for the play-or-pay excise tax. But the employer is not my client. The employer has decided to manage its workforce so that a "line" employee is credited with no more than 28 hours in a week. But the employer seems to care about not providing health coverage to an office employee if he or she works more than 29 hours but less than 40 hours.

John Simmons, thank you for the good reminders. Spectrum Health proceeded on Judge Quist's findings that "the Plan contains no limitation on, or requirements for, a valid assignment of benefits", and that the participant had made an assignment. Belmont Community Hospital held that ERISA does not preclude an assignment of a benefit under a health or other welfare plan. But it didn't decide whether a plan's terms could preclude assignment. In Productive MD, LLC v. Aetna Health, Inc., 969 F. Supp.2d 901, 56 EBC 1841 (M.D. Tenn. 2013), the court found it unnecessary to consider whether an ERISA-governed health plan's anti-assignment provision was effective because a claim administrator had waived the provision. The claims-procedures rule says a proper claims procedure must not "preclude an authorized representative of a claimant from acting on behalf of such claimant[.]" But there's a big difference between being an assignee who is the owner of a claim and being merely an agent who is permitted to help a participant pursue her claim. Among others, a representative can't require the health plan to make a benefit check payable to a person other than the participant. In your experience, do you see health plans including and using anti-assignment provisions?

May an employer's ERISA-governed health plan make void a participant's attempted assignment of his or her right to get a payment concerning a covered medical service?

This might be an opportunity for thepensionmaven to remind the broker that hearing nonsense from fools is among the burdens of being an EX-client.

Answers suggested at a continuing-professional-education meeting are not only not a rule or regulation but also not any kind of administrative law. Could the idea for separating the groups be supported by enough interpretation of whatever is law that a taxpayer that files its tax returns and information returns under that position has a reasonable-cause defense against penalties?

Aside from nice questions about what does or does not invite difficulty for IRC 401(a)(4) non-discrimination (on which the Treasury department still hasn't furnished guidance despite many questions over the past 30 years), an employer (usually acting both as a plan's creator, and as a plan's fiduciary) might consider whether a provision about which directing persons may direct an investment other than a designated investment alternative is one that can be definitely expressed and can be administered using only the plan's records. How about a much simpler way: The plan permits any participant to direct investment using a securities "brokerage" account. Whether a broker-dealer desires to keep an account for an individual is the broker-dealer's business decision.

An employer maintains a health plan. For the plan's eligibility provisions, the plan defines a full-time employee as one who regularly works at least 40 hours a week. Being a full-time employee is among the plan's conditions for eligibility. A consultant told the employer that it cannot maintain the 40-hours condition, and must change it to 30 hours. The employer replied that it is fully aware of the play-or-pay excise tax, and nonetheless prefers to maintain its 40-hours condition. The consultant continued to assert that the employer MUST change to 30 hours. Apart from offering coverage so as not to attract a play-or-pay excise tax, is there some other law that constrains an employer's choice about which of its employees is eligible for its health plan?

If the transferring-out plan is a multiemployer plan, that might involve some concerns that fiduciaries might not have concerning some other kind of plan. Consider whether it's possible that the trust agreement was the only document in which a change to support the transfer is needed.

What if the person who has authority to act for a health plan's administrator does not have a Social Security Number?

Now that the government has delayed enforcement, it might be a while before anyone figures out an answer to my query.

Were these dealings negotiated with a person who was independent of the CEO? If so, why wasn't everything in writing? If not, should an advisor be concerned that the CEO might have complete control over the timing of his compensation?

Beyond considering how a change might affect a participant's tax treatment and each business organization's tax treatment, consider how much right the plan's sponsor has (or lacks) to change which person is obliged to pay the deferred compensation. Although an employer might seek broad powers, sometimes a well-advised participant succeeds in negotiating one or more provisions that restrain her employer from changing terms without the participant's consent.