hr for me

I know I am a little late to this posting, but if it is the same large PEO that we used back in 2010 (in TX used to start with an A and now starts with an I), they were never willing to split out the employer portion of the health insurance premiums for us. We just got a total cost of benefits by employee and a bill each month. Where did you get the calculation for $200 employer portion? I have to wonder if that was done incorrectly. That is where I am getting a red-flag, not on the COBRA amount part. It is my understanding (at least for small group coverage in TX), the insurance provider requires that the employer pay at least 50% of the single employee coverage to be willing to quote coverage -- but maybe it is different with the PEO. So the $200 should have been questioned at the time given if all numbers are for a single employee paying $350 themselves. And was the $1100 single employee coverage or family? Because in 2010 when we pulled out of that PEO and took HR back in-house, that was the COBRA amount for family coverage (we did have great health insurance benefits under them but they were pricey). I will say one of the reasons we pulled out of the PEO was often they depend on their client being very un-versed in labor, employment and benefit laws. But in the end the employer bears liability that they think the PEO is covering (just ask the DOL/EBSA). And there is a risk there that I think a lot of their clients don't realize.

Directly from the IRS 401k Plan Fix-it Guide: "Although the law doesn't treat amounts deferred as current income for federal income tax purposes, they are included as wages subject to Social Security (FICA), Medicare and federal unemployment taxes (FUTA)." http://www.irs.gov/Retirement-Plans/401(k)-Plan-Fix-It-Guide---401(k)-Plan---Overview

This was much more common back in the late 90s when many of our clients allowed employees to put in both pre-tax deferrals and after-tax contributions. There was usually no requirement that the employee do pre-tax before after-tax, but many clients only matched pre-tax amounts. If they allowed after-tax deferrals, it was much easier to recharacterize pre-tax deferrals for the nondiscrimination testing because the money buckets already existed. Yes, the after-tax deferrals were tested under the ACP part of the test. And that was way before the safe harbor regulations. So we did everything we could to pass nondiscrimination tests. Aftertax contributions are not needed so much anymore because of Roth and Safe Harbor. Wow...I sound old.....that was "back in the day" when we were still processing quarterlies and annual plans!

sorry for asking the question the way I did--let me try again. Employee X has single coverage under HDHP with single contribution HSA--spouse covers self and kids under her ER's plan (non HDHP). Can monies in X's HSA account be used to cover unreimbursed expenses for spouse and kids? Based on what my broker has told me : http://www.hsabank.com/hsabank/Education/F...5-A6CDAD6AAE04} Question: Can a spouse or dependent have any other insurance other than another qualified HDHP without causing the account holder to be ineligible to contribute to an HSA? Answer: A spouse or dependent can have other types of insurance coverage without making the individual ineligible to contribute to an HSA. For example, if one spouse has self-only HDHP coverage and the other spouse and dependent children are covered under an HMO, the first spouse could establish an HSA and use it to pay for HMO-related out-of-pocket expenses for the other spouse and kids. However, if the first spouse has "family HDHP coverage", at least one other person in the family could not have other coverage except HDHP coverage, otherwise it would not be family (spouse + 1) coverage. (IRS Response, July 16, 2004).

What does the election form state? -- "from each paycheck" like you first stated ? Or"$300.00 per pay period" as you stated after that? If it is truly pay period, I would argue that unless the bonus comes before the paycheck, you already taken the $300 for the pay period, then you would not take more. If it is per check, then yes, the whole check would need to be deferred.

(Putting on my payroll hat) You need to check state law on wage deduction authorizations. If you go aftertax, generally in most states, you would need the employee's signature to take that deduction (taking off payroll hat, changing back to HR hat). Are you truly willing to force the issue such that you would terminate over the employee's decision to not be covered under your health insurance plan? Because I suspect in every group there will be at least one. Are you ready to fight that battle? Brainstorming idea....is your compensation structure such that you could think about changing it to where the employer pays 100% of the employee's health premium, but that their salary is lowered by this years premium amount? In essence, the take home pay would be the same, but every employee would automatically be covered under the plan? Also you need to consider what happens if the employee refuses to fill out an enrollment form/medical questionnaire. Will you be able to take the group to underwriting without it? And again it gets back to how you will enforce it or deal with non-cooperation (especially with existing employees).

We are small and here is how ours works: (1) The broker is paid by the recordkeeper (American Funds). AF requires that we use a broker to use their recordkeeping since we are so small. I do not know if it is required for larger plans or not. She does suggest fund changes and provides some educational material and help to employees if they contact her. I often know more about 401k issues than she does. She is more on the investment side and knows way more than I do on that front. (2) We also have a TPA who does all our compliance work and legal paperwork (plan docs, amendments, loan paperwork, nondiscrimination testing, etc). If we were not 100% vested, they would also do our distribution calculations. To my knowledge, I have never had a participant talk directly to them. We pay them a quarterly fee plus $x per participant. Usually between $1500-2000 per year for about 20 participants. (3) The recordkeeper does all the other work keeping track of money. They are the ones who provide the online access site to employees. They are the ones I send biweekly data to, etc. We do not pay them at all. Instead their fees are directly within the investment returns of the funds. Each prospectus tells how many basis points are charged. I don't remember off of the top of my head what they each are, but they are reasonable. And on most days, I find them to be the most helpful of my 3 choices. Now in the past and depending on the setup, the same person/company could be all three or could be separate. Ours are separate. When I worked with Mercer HR Consulting, we did all three for clients,but did have a separate trustee setup....if I remember correctly.

If ML is still using the same daily recordkeeping system that they started with back in the mid 90s (and I expect that they are), this is a system wide problem. You will find other recordkeepers who use the same system have the same problem because of the way it is setup. The loan amort schedule (both principle and interest) is fixed once the loan is setup. There is no varying available, except to pay the whole loan off. Plus in the past, 401k recordkeepers have not wanted to mess with the stated signed amortization schedule and changing that. It is much harder to recordkeep partial payments and the interest changes as they are incurrred differently than the stated amortization. Since each transaction the recordkeeping system is timestamped, it isn't setup to advance the last payment date and recalculate the interest amounts on the next payments. My very first project out of college in the early 90s was auditing 401k loan amorts for a company that allowed multiple loans at once. It was a nightmare. And that was back in the balance forward quarterly processing days. Unfortunately when the daily recordkeeping systems were setup, they still had the balance forward/quarterly recordkeeping mindset. There was no such thing as payments made online or even over the phone. One last point...many plan documents/processes require all loan payments flow through payroll. How do you expect your payroll to be able to handle non-standard payments? Do you expect that the employee should be able to pay ML directly? If so, how are you going to update your loan balance/shutoff in your payroll system? How are you going to know the extra payments that are made? Honestly, there are some payroll systems out there that aren't setup to handle 401k loans well either...especially a non-standard payment. And often the communication sequence is not setup for the 401k recordkeeper to pass that information back to the client. And the recordkeeper doesn't want to be responsible. And as a benefits manager, I would not want the payroll processor(s) to be able to accept instructions to change the loan payments without authorization nor would I want the plan recordkeeper to accept payments without my knowledge. When I have seen this issue in the past, I have recommended that the employee put the extra payments into a savings account until they had enough to pay off the loan. I truly didn't want to become their banker. We communicate very clearly to employees at the beginning of a 401k loan that this is not like taking a personal loan or credit card debt. That payments happen on a specific cycle and the only choice is to keep paying the same amount on the same cycle or to pay the whole loan off.

Thank you so very much. I knew someone would have the answer. I usually try to research myself, but I don't have a whole lot of time before I have to explain this to our CEO! Actually the participant did not move however there was some type of problem with the mail. The Post Office decided they didn't like his address anymore (changed a county road/rural route address). Unfortunately, I was not here when all of this went down. The first I heard of this was when he requested a distribution in 2006. George --- no I don't want to change it now, but I was wondering if maybe the participant hadn't been given bad information in the first place (about the fact that he could have been auto-distributed) or if his account balance had been too high to have a forced distribution. There is nothing in the file to show why he was not auto-distributed so I was just grasping at straws....in case I get asked.

(Behind the scenes I am trying to figure out why the prior HR person didn't auto-distribute to a terminated person even though she wrote him a letter stating that she would do so if she didn't get the forms returned by October 2001. His balance at 3/31/01 was approximately $2700 and there were no future contributions. She took this language directly from a letter from the plan recordkeeper as they were terminating the plan. His money was left in the plan until he requested a distribution in 2006 -- by 06, his balance was almost $4,000). I remember that the amount that could be auto-distributed out to a terminated employee changed, but I can't remember when or by how much. It added on a chance to rollover to an IRA between two amounts also. Is there anyone out here that remembers where that amount stood in 2001? And when the change occurred? I know sometimes it can be dependent on the plan, but I am mostly looking for what the IRS/DOL would have allowed in 2001 to see if that is the possible answer to why the scenario above occurred. Unfortunately I was out of the 401k side of the business from 1999 to 2005.

Well, back in 1999 and prior to that I was processing/administering 401k plans and loans for multiple clients through an HR consulting firm. It is my recollection that there was a max of 5 years for most loans. The only ones that could go beyond that were for residences and I remember there being a max of 15 years. We helped companies write their 401k plans and that was a standard in our plans. Unfortunately I can't tell you if it was IRS/ERISA law of a max of 15 years or if it was just common practice. But 15 years is sticking out in my mind. I too would question how old the participant was in 1999 and was 30 more years of working for the company reasonable?