Peter Gulia

In addition to others' observations, a mention of "required" could refer to something other than public law. Just to pick two quick examples: An employer might have an obligation under a collective-bargaining agreement. A plan or its trust might have an obligation under a participation agreement with an investment issuer or manager. Or there could be a requirement or condition under non-tax law, including State or local law concerning the acts of the governmental person that establishes or maintains a plan.

masteff, thank you for the nice help. Concerning non-Medicare patients, one suspects that many of us will learn much more about how physicians arrange themselves from 100% third-person payment to 100% patient payment, and the complexity of configurations between those absolutes.

GBurns and Ivena, thank you for your good help. Today, I learned some new facts. It seems that the receptionist might have been blaming all the ills of the world on the Affordable Care Act; rather, the described belief is that New Jersey insurance law restrains the patient's proposed arrangement. To me, it seems odd that an insurance contract regarding which the physician is NOT a recognized provider could restrain the conduct of the physician merely because the patient could choose to get his insurer to pay for the service if the patient were to choose a different physician. Even if everything described is dead wrong, isn't this more complexity than our society should ask a patient to face?

SheilaD, beyond the text you noticed, New York's courts in 2008 adopted the New York Rules of Professional Conduct, and made those rules effective April 1, 2009. In doing so, the courts obsoleted the former Code of Professional Responsibility (the source of the "EC" [ethical consideration] and "DR" [disciplinary rule] passages you pasted). The current rules make even more clear that a law firm's qualified retirement plan may include nonlawyer employees. A comment to the rule suggests that profit-sharing may be based on the profit of the firm as a whole, or even of a department of the firm, but should not be based on the fee of a particular case. If you (tactfully) invite your prospective client to reevaluate this point, the relevant text is under Rule 5.4 [pages 140-141]. That said, there might be other reasons why the person you describe might prefer to maintain two, four, or some other number of retirement plans.

A friend visiting his physician was told (by the receptionist) that the physician does not participate in the insurance plan that covers the patient. The patient is ready to pay the physician's full fees (and to do so without seeking a reimbursement from the insurer), but the receptionist said that the Affordable Care Act prohibits the physician from accepting any cash payment from someone who is insured. Is that right? If there is a restriction, does it apply differently between those who are Medicare-covered and those who are younger?

My 2 cents has a good observation about the nature of a pension benefit as involving some continuation. But a limitations period that bars a civil action can be useful to make sure that a participant's, beneficiary's, or other claimant's lack of response after his or her claim is denied makes that denial not open to review in court. To pick just one example, this can be helpful if a plan's administrator decided that a domestic-relations order is not a QDRO and the would-be alternate payee didn't promptly pursue that decision. If litigation comes later, the administrator can avoid unpleasant proceedings and expenses by getting a complaint dismissed on limitations grounds. While a would-be alternate payee might return to the domestic-relations court, might get a revised order, and can require a plan's administrator to respond to the newly submitted order, pushing the proceedings and administration into that direction increases the opportunities to cause the participant and former spouse to get an order that is a QDRO and protects the plan and its administrator.

GBurns, thank you for the helpful idea. Can an individual buy "supplemental" health insurance if there is no underlying primary health insurance?

Thank you, Belgarath. Yes, it's about the Heimeshoff decision. After my client's general counsel read a litigation publication's summary of the Supremes' decision, she checked her company's health plan - finding it stated clear limits on bringing a lawsuit, and checked her retirement plan - finding it says nothing. I doubt the idea of describing in the summary a provision not stated by the plan would be effective; the same Supreme Court has said that the summary is not the plan. Even before posting this BenefitsLink inquiry, I advised that I could not state any comfort that the desired amendment would not take the plan "off-prototype", but that I am willing to write an objective memo on the strengths and weaknesses of the arguments for and against. The general counsel decided that the user's fee and attorneys' fees for an IRS determination is a tiny price to pay to correct such an obvious defect in the retirement plan. (By the way, the gc's decision-making could not have been affected by any interest that I might have had in generating work because she knew that my firm doesn't do qualified plans' documents or IRS-determinations work. It wouldn't even have any referral good-will value; the company regularly uses 18 law firms, and 13 of them have an employee-benefits department.)

Benefits 101 is right that some employees would be better off not getting an employer's offer of affordable (within the meaning of IRC 4980H) health coverage. This is especially so if the employer's offer is affordable measured on employee-only coverage, and is not practically affordable for coverage that includes a dependent or spouse. (Some employee-benefits practitioners have been writing about this in the past few years.) How about designing things so that a worker of the kind that Benefits 101 describes instead of having one 50-hours-a-week job gets two 25-hours-a-week jobs with employers that have no relationship to one another? If both employers treat this worker as a part-time employee and so exclude her from any offer of coverage, would doing so help the worker get the IRC 36B credit? Admittedly, this idea doesn't fit every business, because some would suffer productivity losses or other problems. But for some businesses that regularly manage scheduling part-timers, could this idea help some workers get health coverage?

A plan currently is stated using only the adoption agreement and other standard documents of a preapproved volume-submitter plan. An employer would like to amend its plan to specify a time limit on a claim for a benefit - a provision not stated in the volume-submitter base plan, and not available as a choice in its adoption agreement. If the employer makes the amendment, does doing so end its reliance on the volume-submitter IRS approval? Or is there an argument that this added provision is "administrative" and so does not end reliance?

An individual would like to buy an individual health insurance contract that does not cover physician visits. She pays her physician an annual retainer. Her physician never accepts any payment from a person other than his patient. Is such an insurance contract available now? Will such an insurance contract be available a few years from now? (Assume that a premium tax credit is unavailable. Assume that the individual does not object to incurring the IRC section 5000A tax for failing to maintain minimum essential coverage.)

KJohnson and masteff, thank you for the good help.

sprybe, if you think that there's a plausible argument for why the contribution rate obliged under the rehabilitation schedule should not count in computing the withdrawal liability, consider asking the PBGC for an opinion letter.

If the plan you're thinking of is neither a governmental plan nor a church plan, is unfunded, and is restricted to a select group of top executives, such a plan (if it is not an excess-benefit plan) is governed by Parts 1 and 5 of Subtitle B of Title I of ERISA, but is not governed by Parts 2, 3, and 4. The non-application of Part 2 means that ERISA's anti-cutback rule does not apply. A non-governmental employer's 457(b)-eligible plan need not meet Internal Revenue Code section 401(a) conditions, and so need not meet section 411's anti-cutback rule. Even if you're ready to advise your client that neither ERISA nor the Internal Revenue Code restrains the amendment of payout forms, consider other laws, including the law of contracts. (When I represent an executive, we might seek provisions that disable the employer's power to amend the plan without the executive's assent.) If the employer holds an annuity contract as a way to help the employer meet its obligation, consider that removing the plan's annuity payout forms might make further annuity purchases unsuitable under insurance and securities regulators' rules, including FINRA rules.

If an employer abandons any attempt to avoid ERISA but would do what the IRS now calls an employer-payment plan is the employer's payment excluded from its employee's wages? Even if one accepts the premise that "the plan" (whatever it might be) somehow violates Public Health Service Act section 2711(a) [42 U.S.C. 300gg-11], how exactly does that failure cause the employee to lose the tax treatment recognized by Revenue Ruling 61-46?

Has the employer considered monthly payroll?

Before looking to any law source, why would a lender want to have fiduciary duties to its borrower?

WCC, you might suggest that the plan's administrator read carefully its service agreement with its recordkeeper. Some of these agreements specify some details about obligations and conditions for a change in plan investment alternatives. Along with this, consider the possibility that the service provider's desire for a wait is not necessarily related to a notice that the plan's administrator might or might not send, but rather might relate to the recordkeeper's business operations. Some recordkeepers schedule the touches to the computer systems. Also, understand that some service-agreement provisions might be negotiable (if a plan is big enough, or otherwise a valued customer - including because of a relationship with a lawyer or consultant).

Require the participant to furnish her individual taxpayer identification number. If the payee is a non-resident alien and the distribution is not paid as a direct rollover to a (U.S.) eligible retirement plan, the Federal income tax withholding ordinarily is 30% unless the distributee submits to the plan's administrator a properly completed Form W-8BEN (or other form of the W-8 series) to claim reduced withholding under an income tax treaty, or Form 8233 to claim an exemption from withholding. 26 C.F.R. 1.1441-1 to -9. Report a distribution paid to a foreign person on Form 1042-S.

What if the corporation offers to pay each participant's account a purchase price per share that an independent fiduciary finds is more than what would be the fair market value? Could the corporation offer a purchase price high enough that every participant would be motivated to tender her account's shares?

Does this plan provide participant-directed investment? If so, does a participant's power to direct apply to her whole plan account, or only some portions of it? Did each participant choose to allocate employer securities to her account? Or did another fiduciary decide to contribute employer securities to participants' accounts? Was the investment in employer securities a discretionary fiduciary decision? Or did the plan document mandate investment in employer securities?

CitationSquirrel, for tax rulings that treat a direct payment of an investment adviser's fee from the participant's account as not a distribution that could violate IRC 401(k)(2)(B), 403(b)(7)(A)(ii), or 403(b)(11) (and as not a distribution that could attract the extra 10% tax on a before-retirement distribution), see IRS Letter Rulings 9332040, 9316042, 9047073.

My 2 cents, thank you for your good grace. I understood your observation as 'why would anyone' want to .... I just wanted to help other readers understand that my inquiry really was just an inquiry.

My 2 cents, I don't want to do anything; I asked a question because I remember reading a plan, not one I drafted, that in its definition of excluded employees referred to an alien (and not with the usual lingo from Internal Revenue Code section 410). Kevin C, thank you for the helpful information, which gives me a new way to think about this topic.

GMK, thank you for your further observations. About your last observation, Colorado is an example: It has a statute and a State constitution provision that, if not contrary to the U.S. Constitution, purport to restrict marriage to opposite-sex marriage. But the statutes also provide a civil union. "A party to a civil union has the rights, benefits, protections, duties, obligations, responsibilities, and other incidents under law as are granted to or imposed upon spouses, whether those rights, benefits, protections, duties, obligations, responsibilities, and other incidents derive from statute, administrative or court rule, policy, common law, or any other source of law." Colorado Revised Statutes 14-15-107. In other contexts, when a taxpayer argues for a favorable tax treatment by pointing to the form of a transaction, the Internal Revenue Service often argues substance over form. Could someone who is a party to a Colorado civil union but had taxes withheld on the value of the other party's health coverage argue that a word that describes a legal status must have the meaning that follows the legal consequences of that status? After all, isn't that why law invents categories?