Chaz

Are the employees who are staying able to join the hospitals' FSAs?

Opt-out payments are permissible and are increasingly common. Your cafeteria plan will have to be amended to provide for the payments. Any election will be subject to the irrevocable election rules so employees must have a valid change in status event to add coverage (at least on a pre-tax basis) and cannot add coverage simply because they "changed their minds."

As soon as the anesthesia wears off, I think she will be fine completing the 5500.

I believe that the employer intends that the warehouse store the records but retrieve them (and presumably necessarily have access to the content, some of which would otherwise be PHI) to deliver to the employer in the event that the content is needed for ERISA/Code (really, more likely for ERISA) purposes. The agreement between the employer and the third party would bind the third party to comply with ERISA and the Code as far as the record retention requirements. The records may be stored electronically. The scenario is worrisome to me.

HIPAA exempts from the Privacy Rule a plan with fewer than 50 participants that is self-administered by its employer-sponsor. An employer with fewer than 50 employees self-administers its health FSA. It is looking at moving the health FSA records to an off-site warehouse location. Assume that all ERISA and Code record retention requirements are met. Will the use of the third-party warehouse cause the plan to cease to be "self-administered" for purposes of the Privacy Rule's exception?

Yes, in order for HSA contributions to be made on a pre-tax salary reduction basis, the employer would have to set up a cafeteria plan. It appears that your employer (i) has a cafeteria plan but just for HSA contributions or (ii) is not in compliance with Code Section 125. Either, you should try to convince your employer to establish a cafeteria plan for employee health plan contributions. In addition to the benefit to employees, the employer will save on its share of payroll taxes for the amounts taken pre-tax. These amounts will probably offset the costs in setting up the plan. Many brokers will prepare documentation establishing a cafeteria plan at no extra cost to their employer-clients. (It is always a good idea to have counsel review the documentation, however.)

At the risk of repeating myself, under PPACA, the child, was REQUIRED to be eligible for the mother's plan and the step-mothers plan before, during, and after the move.

Deposit them where? Most dependent care plans are funded out of the general assets of the ER. That is, no separate fund. The ER's general assets are enhanced by not having to pay the EE by the measure of the salary reduction elected to pay for the elected day care benefits. When a claim for day care expenses is submitted, the ER pays it out of its general assets. You ought to look at the plan terms to see what is said about the timing intervals (if any are imposed) for submitting claims and what the time lines are for paying them. If there is a separate fund being used as contemplated by your OP, then there might be a problem. DoL Reg 2510.3-102(a)(1) provides DoL Reg 2510.3-102© provides They are depositing them into a checking account used for the reimbursements. However, until they actually deposit the deferrals into the checking account they will not pay out any reimbursements. The ER might have inadvertently (and voluntarily) created an ERISA trust by using that separate account. It depends much on how that account is titled. If it has created an ERISA trust, then that plan needs to be reported on a Form 5500 each year even if it is under 100 employees, and it will need to have an annual independent audit performed. An ER that is a laggard in paying claims or transmitting to a separate fund those salary deduction amounts is often someone that also overlooks these audit and reporting requirements as well. Looks like this ER could be especially vulnerable to a DoL audit, initiated by just one upset EE complaining to the DoL's regional offices. DCAPs are not mentioned in ERISA Section 3(1) as employee welfare benefit plans. How then do the plan asset rules apply? And why would it be within the DOL's jurisdiction?

Under health care reform, an under age 26 child must be eligible for coverage where ever the child lives. Thus, moving to live with the birth mother would not result in a change in eligibility for the child (under either plan) because, effective January 1, 2011 (assuming a calendar plan year) the child was eligible under both plans. I think this type of scenario is screaming for relief in the final regs.

No court order. Before PPACA, this wouldn't have been a problem because the child would likely lose eligibility under the employee's plan because the child no longer met the definition of dependent but the age 26 requirement changed this rule.

I am not familiar with NY's law in detail but I think that, to get around the ERISA preemption issue, the law probably regulates insurers not employers. Therefore, I think that it is the insurer's obligation to comply with the NY law, not the employer's. (The employer still has to comply with COBRA, of course.)

Employee has enrolled 17-year old step child in cafeteria plan. Step child moves out and in with birth mother and enrolls in birth mother's plan. Employee wants to end contributions for the step child. Change in status?

Why not? (Assuming it's at-will employment.) If there is no contract, there can be no forced enrollment/payment. Again, I'm not sure why not. What law prohibits it?

Why not? (Assuming it's at-will employment.)

This is out of my area of expertise but couldn't the employer require the employees to sign an authorization (again, as a condition of employment)?

In the case of at-will employment, which I assume is the case here, and in the absence of a contractual promise, which I assume is not the case here, an employer can change the conditions of employment at any time and for (most) any reason. The change is in consideration for employment going forward.

I am not aware of any law that prevents an employer from requiring its employees to purchase health insurance as a condition of employment. In my view, a cafeteria plan is not required in this scenario because the employees are not given a choice between receiving health benefits and cash. Their only choice is between a job with health benefits and unemployment. This is not a comment as to the advisability of this scenario, just a comment on the law. I'm not seeing a connection between this and the individual mandate. Am I missing something?

Are you saying that the employees would not have a choice whether to take health insurance and that paying for benefits is a condition of employment? If so, you are correct that no cafeteria plan is necessary. This is permissible, but, as QDROphile alludes, it is not a common plan design.

Frankly, that's not surprising.

That's a great question. There hasn't been a clear guidance from the regulators. We've considered that here and have concluded that it likely depends on the plan structure (we've had different answers for different funds).

The COBRA regulations explicitly provide that, in the event of the death or incapacity of a QB, the QB's legal representative, estate, or spouse can make the COBRA election for the QB. See 54.4980B-6 Q/A-6.

You count to four? How can you stand to wait that long?

I have the same problem when I do searches and want to change my search terms.

vebaguru - Are benefits captives practical only for very large employers or can moderately sized employers use them as well?

I think the cops will know where to look for the prime suspects.