Chaz

So, I just revisited this thread now. It's sort of creepy who I used in my hypothetical back in 2007, isn't it?

Note that depending on a number of things, including whether you have contributed more to your FSA account than you have received in reimbursements, you may be entitled to continue your FSA through COBRA until at least the end of the year.

This is a question that should should ask for advice from an experienced benefits attorney. In most cases, a leave donation program will not be an ERISA plan but there are circumstances in which a court may (rightly or wrongly) determine it to be so. You should also make sure the employer takes into account Internal Revenue Code and state law issues with respect to this program.

Two comments: 1-It is distinctly possible that a five-employee health plan, whatever it is represented to be, level-funded or not, may be a fully insured plan for all intents and purposes and therefore subject to the Missouri mini-COBRA law. 2-If the plan is truly a "self-insured plan," the "insurer" is the employer. If the plan's "administrator" is making the determination who is eligible to participate (presumably for underwriting purposes, what else could it be?), that indicates that the arrangement is more akin to an insured product. One more comment: 3-This arrangement seems shady to me. I like the idea that Luke suggests above of the employer instead offering a QSEHRA.

I suggest consulting with an experienced benefits or labor lawyer rather than relying on information posted here. Your situation appears more complicated than can be competently answered in a few paragraphs.

I have helped a number of clients with DOL audits. Off the top of my head, they have involved the Philadelphia and DC regional offices and maybe others. The examiners have all been unfailingly pleasant and have been flexible with respect to the timing of the submission of documents. I am currently helping a client with respect to an audit that started in the Obama administration and has continued to the present time in the Trump era so at the very least the DOL has not abandoned its audit activities. I have not been asked to help with any new audits during the Trump administration so it may be that the DOL is not initiating many new investigations but that's just a guess on my part. All the audits that I have been involved with were resolved with little or no DOL commentary. Hope this helps.

If a fewer-than-20-employer employer otherwise meets the requirements to offer a QSEHRA (e.g., does not offer medical coverage at all), I believe without researching that under the QSEHRA rules the employer could reimburse Medicare Part B, D, or supplement premiums through it. It couldn't do it for just the Medicare folks as that would violate the rule that it generally apply to all employees.

Under no conceivable circumstance is a health FSA a "payroll practice" or a "voluntary benefit." A health FSA is a self-insured group health plan that is subject to (except in limited circumstances such as if it was a church plan) COBRA, HIPAA, and ERISA, among other laws applicable to group health plans. A health FSA with 100 or more participants is required to file a Form 5500. (It can be included as part of a "wrap" plan.)

I did not look at the case that you cite but I am guessing that case involved whether the employer had sufficient involvement to take the plan out of ERISA's "voluntary plan" exception. As you describe it, the employer is paying the cost of the arrangement, which almost certainly is more than enough involvement to take it out of this ERISA exception.

I assisted a client in responding to a 226J. We provided an explanation and evidence that the IRS's assessment was incorrect. The IRS just responded a day or two ago saying that no further action will be taken in this matter. We responded in within the 30-day time period.

I have a question that has bedeviled me. Here's the situation: Both spouses work full-time for the same ALE. Husband enrolls in family coverage and covers his spouse and children, The instructions for Form 1095-C provide that in such as case "the enrollment information should be reflected only on Form 1095-C for the employee who enrolled in the coverage. (However, it would report the other employee family members as covered individuals)." This makes total sense. My question is whether a Form 1095-C needs to be completed and delivered separately for the spouse. (The Instructions also state that one Form 1095-C needs to be completed for each full-time employee.) If one does need to be completed, what codes should be used for the spouse? There is probably no requirement that a form be completed for the spouse but I have not found any guidance specifically saying so, and, as I mentioned, it is bedeviling me. Any assistance would be appreciated.

Off the top of my head, I do not believe that the age 26 rules apply to retiree health plans.

This issue has raised its ugly head again. Anyone have experience with this?

To clarify, an employee cannot contribute (or have contributions made on the employee's behalf) to an HSA if he or she participates in a general purpose FSA. If an employee has an existing HSA, he or she can "use" both the HSA or a health FSA to reimburse eligible medical expenses.

I am not exactly sure what you are asking but the ACA does not contain any out-of-pocket maximum limits for out-of-network providers. If you wanted to take them into account, I believe off the top of my head that HHS permits you to do it as long as you do so in a reasonable manner.

All the points above are good reasons to require employees to make affirmative elections each year. Despite it all, however, some employees fail, for a multitude of reasons, to make elections by the plan's deadline. I find a lot of employers don't want their employees to go "bare" with respect to medical coverage and those employees who neglect to complete the open enrollment process are defaulted either into the lowest cost medical plan offered or, more commonly, the previous year's election. For other benefits (dental, vision, FSA, etc.), oftentimes, these employees would not be enrolled in coverage, even if they had coverage in the previous year. Employers who go this route need to communicate it to employees and make sure the plan documents and SPDs properly reflect this design.

Thanks, Dave! It works for me too.

I am unable to see the posts on the "Securities Law Aspects of Employee Benefit Plans" board. When I click on it, I just get the heading but no posts. The other boards seem to be working fine. Is anyone else having this problem?

I'm not sure what you mean by "The money is fringe dollars and does not belong to the employer as normal" but, ordinarily, HRA amounts are part of the employer's general assets. Under Code Section 105, the employer would not be permitted to distribute amounts to the employee(s). (See Revenue Ruling 2002-45.) The employer should speak with benefits counsel to discuss its options with respect to the left over amounts.

It's Zane Benefits and it is a marketing/spam post. IGNORE.

Employee opts out of medical coverage for 2017 but elects general purpose health FSA coverage during open enrollment because he is covered under spouse's plan. Spouse terminates employment mid-year. Due to the change in status, the employee enrolls himself and spouse under employer's HDHP starting June 1 and wants to contribute to HSA starting then. Employee has exhausted health FSA balance. Can employee terminate FSA effective May 31 and start contributing to an HSA thereafter? I think not but cannot seem to find support either way. Any help is appreciated,

I don't know the answer to your question off the top of my head (speak with counsel!) but what makes you think the judge will permit a transfer?

It would not be a COBRA qualifying event but Peter's comment above is right on point.

I agree with Flyboyjohn's conclusion but not the analysis. The Seller's plan is a group health plan not individual coverage so there is nothing in the ACA preventing Buyer from paying the premiums. What the parties need to be concerned about is whether this arrangement creates a Buyer-sponsored group health plan itself, which would require Buyer to offer COBRA upon the occurrence of a qualifying event. For instance, if the employee terminates employment with Buyer while covered under Seller's plan, Buyer may have to extend coverage under Seller's plan for 18 months after the loss of coverage as a result of the termination. (EBIA has a good summary of the issue and its uncertain application.) Better for Buyer to pay additional after-tax compensation in the amount of the COBRA premiums for a specified period. This amount can of course be grossed up to make the employee whole.

Thanks! I found that right after I posted the question.