Miner88

In section 2715 of the Affordable Care Act it talks about the new uniform benefits summary and says that guidance about the new format will be out by March 23, 2011 and the new format must begin being used no later than March 23, 2012. Within section 2715 there is also a provision that requires plans to provide 60-days advanced notice of material modifications to plan participants. Section 2715 falls under the general effective date of the first plan year beginning on or after September 23, 2010. If a calendar year plan is going to make changes effective January 1, 2011, does the 60-day advance notice provision apply? Here are my choices: A. No, because the 60-day provision isn't effective until March 23, 2012 when the new uniform benefits summary provisions apply B. No, because the 60-day provision isn't effective until January 1, 2011, so the duty to provide advanced notice doesn't arise until that date (and therefore would be impossible for changes implemented 1/1/2011) C. Yes, because the changes will be effective January 1, 2011 What are your thoughts??

If an employer and union pick one of several alternate schedules under a rehabilitation plan in year 1, I understand that the schedule remains in effect until the end of the CBA, even if the plan sponsor changes the schedules. My question is - at the end of the collective bargaining agreement, say year 3, if the employer and the union cannot agree on wage concessions to pay for the schedule that was chosen in year 1, can they at that point opt for the default schedule under the rehab plan?

Thanks for your reply Vebaguru. Apparently, I've been told, unions use welfare funds as "conduit trusts" all the time when they have union members from other locals working in the jurisdiction of the welfare fund. The trustees have no problem with the welfare fund holding the employer contributions for both the welfare and profit-sharing plans in their fund for later transfer to the union member's "Home" local welfare fund and profit sharing fund. Normally, the welfare fund would cut separate checks to the home local's welfare fund and profit sharing funds. The question that has come us is whether the welfare fund can just cut one check (including both welfare and profit sharing contributions) to send to the home local and have the home local split the one check into its welfare and profit sharing funds. I was having trouble with the fact that the welfare fund was holding profit sharing contributions. But, if you assume that is OK (which is what I'm being told is done all the time), I guess it doesn't matter whether the welfare fund cuts separate checks to the home local funds or just one check into a "home" local conduit trust and have that trust distribute the funds to the "home" local separate funds.

I'm new to the Taft-Hartley plan world, so any help would be appreciated! Can a welfare fund accept employer contributions for both welfare and profit sharing benefits for "away" employees and then reciprocate the money back to the "home" locals for allocation between that local's welfare and profit sharing funds? For example, assume under the "away" contract that an employer must contribute $2 for profit sharing and $1 for welfare benefits. Can the welfare fund alone hold the $3 and then cut a check to the home local for $3 and have them allocate the money to their welfare and profit sharing plans?

Under the Early Retiree Reinsurance Program regulations, plan sponsors are required to have a written agreement with their health insurance issuer or employment-based plan, requiring the health insurance issuer or employment-based plan to disclose information on behalf of the sponsor to the Secretary of HHS. Does the Business Associate Agreement that is already in place with the health insurance issuer cover this requirement? Or do we need to get a separate agreement signed? Any thoughts?

Wonderful - thank you!

When is a multi-employer, collectively bargained, health and welfare fund required to comply with the requirement to cover dependents up to age 26? I know for most plans, it is the first plan year beginning after September 23, 2010. However, there is a provision in PPACA that appears to extend the effective date to the date of termination of the last collective bargaining agreement. There is also a question of whether or not that provision even applies to self-funded plans. What are others thinking?

Thanks for the reply! His social security number is still active - HR believes he may have moved out of the country.

We have a deferred vested SERP participant who became eligible for payment on 1/1/2009 (due to turning age 55). Several attempts were made to contact him, including using the IRS locator service and the SSA, but he cannot be found. What must be done to comply with 409A at this point? Any suggestions would be appreciated!

We have an employee called to active duty effective May 4th. Under the terms of our plan, his coverage is continued through the end of May. The employee does not want to pay for coverage in May since he will be covered by TriCare. Is this a status change under the cafeteria plan rules? Unless TriCare is considered an "employee benefit plan of the employer of the employee" I don't think it is. Any thoughts?

Thanks for all of your input. There are no missing participants at this point, we're just trying to deal with the forfeitures. Company A did not want to merge this plan into any of its existing plans - although I think that is the only way to deal with the forfeiture, based on the comments I'm getting.

I really need help with this one! Company A bought the stock of Company B 4 years ago and merged that company into itself (so no more Company B). Prior to the closing of the deal, Company B was to terminate their 401(k) plan. Just last month, Company A discovered that the former plan administrator for Company B was still trying to distribute the assets of its 401(k) plan and that there was a balance in the forfeiture account. Apparently, all 5500's have continued to be filed for the plan and the former plan administrator has even adopted a restatement of its prototype plan as of August of this year! (Not sure where he gets the authority to sign for a company that no longer exists!) Here's my issue - since the assets were not distributed within one year, I assume Company A now "owns" the plan. Company A can continue to pay out the remaining balances of the participants. However, what can be done with the forfeiture account? The plan document says that forfeitures may be used to satisfy employer contributions or to pay plan expenses. At this point, no employer contributions have been made for 4 years and there are no plan expenses (the recordkeeper apparently is getting paid from the participant account balances). Any help would be appreciated!

Does anyone have any thoughts on the following: A plan requires documentation verifying the eligibility of a dependent before the dependent may enroll in the plan (eg. marriage license, birth certificate, etc.) Under the special enrollment rules, if a "request for enrollment" is received within 30 days (or longer if the plan allows) of the event (marriage, birth, adoption or placement for adoption), coverage must begin no later than the first day of the first calendar month beginning after the date the plan receives the "request for special enrollment" for marriage and on the date of the event for birth, adoption and placement for adoption. What is a "request for special enrollment?" Can the plan require that the dependent verification documentation be submitted within the 30 days (i.e. consider that documentation part of the "request")? Or must the plan enroll the dependent based only on a status change form that is received within 30 days even though the verification documentation is not also provided?

Thanks for your reply John. Any thoughts on how the COBRA subsidy would work? Can Company A reduce its payroll taxes for the subsidies it has paid out for Company B employees even though they were never on Company A's payroll? If not, then how would the subsidies be recouped since Company B is no longer paying payroll taxes?

Any ideas on the following scenario would be greatly appreciated! Company B is a wholly-owned subsidiary of Company A. A and B each maintain their own health and welfare plans. Company A has been selling off the businesses/assets of Company B over the past few months. Eventually, all of the busiensses/assets of Company B will be sold off and only a few employees will remain with Company B to wind down its affairs. All of the employees who went with the sold businesses will get coverage under their new employers' plans. So, my questions relate to those employees who are left winding down the business of Company B. 1. I believe the COBRA rules require that Company A provide COBRA coverage for the remaining employees once their coverage is terminated under Company B's plans (since their is still coverage under the "controlled group"). Is that correct? 2. If Company A is required to provide the COBRA coverage, must it provide only the plan options that were similar to what Company B offered its employees (e.g. PPO to PPO coverage) or must it give the former Company B employees the option to enroll in any of Company A's plan options (e.g. PPO, HMO, HRA, etc.)? 3. Any thoughts on how healthcare FSAs should be handled? Thanks in advance for your comments!

I have a situation exactly like what 401_Chaos has mentioned. The subsidiary is going out of business and is terminating its group health plans. The parent, however, continues to maintain its GHPs. Based on the COBRA regs, it appears the parent must provide COBRA through its plans for the terminated subsidiary employees. Does anyone know how this would work administratively? The parent's plans offer completely different options (and many more) than the subsidiary plan offered. Does the parent have to offer ALL of its options to the subsidiary's former employees or just those options that were similar (e.g. if sub had a PPO, parent offers only PPO option). Any thoughts would be appreciated!

Thanks for the reply QDROphile. I don't really feel sorry for him! However, he still wants to make an election for this year - can he do that even though HR missed the 30 day deadline?

We have an employee who was hired in September at a level that is eligible for our deferred compensation plan. Due to an administrative reporting error, the HR department did not receive notice of this person until November. Under 409A, an initial deferral election must be made within 30 days of first becoming eligible to participate in the plan. I don't see anything in the 409A regs that allow for a correction of an administrative error such as this, and I don't think this error is covered by Notice 2007-100. Does anyone have any thoughts on this?

A defined benefit plan purchased an annuity contract several years ago for some of its deferred vested liabilities. The annuity contract offers a 50% and 100% annuity. Per PPA, the plan has been amended to provide for the 75% qualified optional survivor annuity. What happens with the annuity contract? Is the insurance company required to offer a 75% annuity also? Any thoughts would be appreciated!

Thanks JanetM - now I just need some documentation to back up my assumptions on what happened to the assets!

rcline46 - thanks for your response. I believe the assets were distributed, but the 5500 was incorrectly completed. The prior owers (a married couple) of this small "mom-and-pop" shop were the plan sponsors, administrators and trustees and I'm not quite sure they knew how to complete the final 5500 correctly. If my assumptions are correct - how do I file the amended return since we never had anything to do with the plan - who signs the 5500?

We received one of the IRS's notices of late filings of 5500 for 2004. It is for a 401(k) plan sponsored and administered by a company we acquired in 2003 (through stock acquisition). I have a copy of the board resolution which states that the plan was terminated prior to our acquisition of the stock of the company. Unfortunately, the prior plan administrator did not indicate on the 2003 5500 filing that it was the final return and actually showed plan assets in the trust at the end of 2003. (I'm still trying to determine where those assets went - we believe they were either distributed to participants or rolled over into our 401(k) plan.) How should I handle this? If I amend the 2003 filing, who would sign as plan administrator and plan sponsor since the plan was terminated prior to our acquistion? Any help would be appreciated!

To pass the non-discimination test for our dependent care flexible spending account, we need to reduce contribution levels of HCEs from $5000 to around $3500 for this calendar year. We are in the process of hiring a new HCE - should we also limit this employee's contribution level to $3500 to be consistent? (I'm aware that the determination of who is an HCE is made based on prior year's earnings, which would be zero in this new employee's case.) If you think the contribution should be limited, does it make a difference if the employee was hired later in the year and his actual earnings would not meet the HCE definition? Your thoughts are appreciated!

Thanks again leevena!

Thanks for the reply leevena! So you don't think the disease management piece would be subject to COBRA either?