GBurns

A conundrum. To take over or to not take over? To clean up or to hope for the best? I do not see a problem in helping this client as long as there is a clear delineation between the work of the previous TPA and your work going forward. Make sure any "clean up" is a separate engagement and not a part of your TPA agreement. That the client wants to be clean, is the client's decision, as long as the client is aware of all the problems, consequences and penalties and is paying you for your efforts.The client's decision might change when all is made clear. What needs to be done, rather than what should be done is going to be based on the consequencies and penalties disclosed eventually to the client and what his legal advisor suggests. Make sure that you do not give the legal advice, make sure it is someone of his own choosing. It might turn out, after afull evaluation of the consequences etc, that ignoring the past might be prudent, but that advice should not come from you as TPA. You also should not be in any position to pass judgement on the effect etc on 1040s or 1120 etc unless you have looked at them as they would be amendment. Including any aaditional income etc might have no effect because of being offset by deductions etc. You really have to look to know for sure. If there is no serious eefect in amending the returns, then your choices might be simpler. I would not run, this will be a great learning experience, will create a great relationship and generate respect for you with both the client and the client's CPA and lawyers. It might present you with an opportunity to help any others that both this client, the CPA and lawyer are aware of. I am sure that they know other clients of this TPA. And you will be well paid for all these benefits. I would not pass on this opportunity. Litigation against the TPA is a side issue and can only be addressed after all the "damage" is quantified. Getting side tracked or ahead of the game serves no purpose.

In my opinion No. I have to first assume that this is a self insured plan, because you have left the decision regarding continuity of coverage etc up to the employer rather than to an insurance company. If it is self insured the PD and SPD etc surely state a non renewal provision. However, if there is going to be termination of coverage but not termination of the Plan, that should cause the need for COBRA, shouldn't it? If there is going to be a COBRA issue, Why bother? If there is going to be termination of the Plan, I think that there is the issue of "bad faith" since these employees were already informed and made to expect continuity of coverage and based on the lateness of this, there is insufficient notice time to do otherwise. Additionally, although state law might be pre-empted and the Plan might not be prohibited from termination etc by the Governor's order, the area has been declared a Federal disaster area by the President and as such termination or a major change in coverage would possibly be a violation. Legal advice is suggested. In any case, the ethics of any employer who would even consider this just because of 1 month's claims, should be questioned. Also consider that any claims made that are possibly attributed to the Hurricane might be reimburseable under their General Liability and other Loss coverages as being a Casualty loss etc. The fact that there is no OE in time for the new plan year does not stop coverage from the old plan year to be extended. Also an OE for the new plan year is most likely not necessary to give coverage anyhow, the employees can continue with the same level of previous coverage into the new plan year without an OE. The pupose of the OE is to allow changes, is it not? The election of a coverage level has nothing to do with the granting of coverage (automatic enrollment or otherwise) anyhow. Is there something I missed? I cannot understand why this employer even has any concern about the issue, since there is no issue. Either extend the plan year or rollover the elections until.

Is the Scool District going to fund on an "as needed" basis or in a lump sum? If lump sum, will this be periodically (specified), annually or all at once (for the entire coverage period)? Why is a "creative idea" needed? What is wrong with a reserve fund? What does "cleaner way to run this" mean? Who is the limit applied to? If the SD is paying premiums or reimbursing expenses, what purpose would the limit serve? Isn't already self limiting?

It smells and as suggested needs competent legal advice. The bank is closely held.. is he a shareholder? Is he related? Does he have some other relationship with either the bank or its shareholders? You posted that "he will be a director of that bank", which I read as being that he is not currently but will become. After the investment? Why? Because of the investment? Is this closely held bank something that a prudent fiduciary would invest in? Very questionable since being a closely held bank, it might have severe restrictions on the sale or disposition of shares, thereby limiting liquidity etc.

You seem to like to create your own obstacles. The suggestion was made, that you might want to consider distance education teaching. and What do you do? You start limiting yoourself to being an "Instructional Designer" something for which you see a "catch-22" because you have no direct experience. Why not just try for "distance education teaching" and see what that gets you first? It will be much easier to transfer to or dabble in "Instructional Designer" AFTER you have secured a position with an institution. This is part of the "chip" and "bad attitude" of which I spoke. Get the cake first then add the icing when you have taken it home.

Belgarath, The IRA is a different item from the underlying investment, which is why you will have the IRA agreement or Plan Document plus an insurance policy (annuity).There is usually a difference between the beneficiary of the IRA and the beneficiary of the underlying investments, in this case, the annuity, usually because they each have their own separate beneficiary designation section. The insurance company employee to whom you spoke might not (1) have sufficient knowledge to have given a valid answer or (2) might not have been aware that there might very well be 2 different documents with 2 different beneficiaries.

AshleyL Any suggestions or references as to how this might be done?

oriecat, I thought that you were in a state other than California. State of the union, that is, not state of mind.

A few suggestions: 1. Consider working in the Public sector preferably the governmental employers or School Districts. The larger, the better. Your circumstances would be more common and accepted. 2. Do some research (even a simple Google search) on your conditions and the possible treatments and medications. From your post and past experience I would bet that your claudication is being seriously mishandled. Remember that the AMA recently admitted that almost 50% of cases were misdiagnosed (in certain major diseases) and that the majority of treating physicians did not even know what the established treatment guidelines for the popular major diseases were. Chances are your situation is the same. 3. Take a few very deep breaths and be thankful that it is not worse. 4. Take some more deep breaths and then go back and read all the posts. You seem to be getting too resentful of the situation and developing both a "chip" and blinders. You will need to plan your approach to life very carefully and should not carry any unnecessary items such as "a bad attitude". 5. Consider what your appearance and demeanour should be. Maybe such things as keeping your head down and not looking people in the face might not have been such a good idea in a society that likes to "look you in the eye". There might have been other ways to handle the situation. All that said, it is very easy to sit on this side of the fence and give advice, however, your situation is not unfamiliar to me. I had an uncle who I watched suffer with a fairly similar situation and I am familiar with how he handled it. I have a 23 year old niece with the worst case of Atopic Dermatitis ever imaginable, and I have watched how she handled it in Public School, college and now work. I am also very familiar with what people subject to racial and other prejudices go through and while not the same as your situation is not all that much different. everything that you posted is applicable to many black people especially those with afflictions and not so good looks.

Well then the references that were given will give you what you need. I would lean towards the book by Ellie Lowder and Kristi Cook.

Why would a participant changing from union to nonunion be a transfer or change in employment or even a change in "status"? What would trigger a distribution?

I would argue that it has nothing to do with "trickle down" or any economic theory and also has nothing to do with "get to the top at all costs" either. I think that it is more a failure of ethics and morals caused partially by the failure of "religion" and religious and educational thought and teachings (or lack thereof). I do not think that most people try to or are even interested in "getting to the top". As a result there is not much in the way of those at the top trying to keep others away. The air is too thin at the top and the base too wide for the "top" to keep anyone "down". I also do not agree with "our current employment/HR philosophy is that if you don't want to climb my ladder, and grovel all the way up (whilst pushing me ahead)" etc. I do not think that there is any concern about anyone climbing any ladder, however, I will agree with the "grovel all the way". I think that that is really what they want to see employees and co-workers do, sweat and grovel. "Grovel all the way" and debasing your fellowman seems to have become the norm along with "if I don't have it you should not have it". Envy, sloth and petty greed have replaced or redefined most of our ethical and moral standards.

If there is an employee contribution there has to be an Open Enrollment of some sort, if only to renew the Salary Reduction Agreement. And, unless no change to the initially selected coverage is allowed or there is only employee only coverage, there has to be some way to add/drop dependents etc. Why the thought that "open enrollment is not required for welfare plans"?

In what context will you be working? Administration, selling plans, selling product within the plans?

In the explanations that they have attempted to give me, the individual is not selling his interest or his stock, the ERSOP (or whatever) is an additional investor who gets their stock from the company's "Treasury". The individual still has X number of shares and the ERSOP has the additional amount that is issued to match the $200K. The individual also does not receive the cash, the Corporation does. FLPSOP is another variation on the theme. By the way, there was more than 1 thread discussing this issue, in fact almost the exact same scenario and phrasing was used by an initial poster to describe the plan. It makes me wonder if we are the victims of Viral Marketing. http://benefitslink.com/boards/index.php?s...t=0entry77472

Someone on 1 of these Forums reminded me once that I could not "police the Internet" nor the Boards. There are some things that you cannot change and which are not worth your effort. Believe me when I tell you (from many personal experiences) NO ONE will thank you for making the corrections and while you are doing NO ONE will visibly support you. You will be the lone voice crying in the wilderness. and if you are ever successful at causing change no one will thank you if they even remember that you did it. Remember the Peter Principle, these people will all eventually rise to their level of incompetence. Crud usually rises to the top and floats with the current. Then it all gets flushed, anyway. Unfortunately, that is the way societies historically rise and fall. Maybe its just the start of our turn. Do that which furthers you along your chosen path and let other solve their own problems. Let them be "ground to dust" if that is what they allow, just don't inhale any of it.

I am not sure what you mean. PS 58 are insurance rates. Insurance rates (whether PS58 or other) X (times) units of coverage = insurance costs.

This might shed some light on the issue, especially the references in the footnotes: http://www.benefits.net/pwecfcmo/flexreporter/v0302.htm#5 I omitted Part 1: http://www.benefits.net/pwecfcmo/flexreporter/v0301.htm#5

It is quite possible that that 1998 opinion expressed by Robyn Morris might have been different or might have been expanded if the Court opinions in Express Oil Change, and the other similar cases in other Circuits, had been available at that time. Express Oil Change, Inc v U.S., 24F. Supp. 2d, 1249, 20 E.B.C. 2184 (N.D. Ala. 1998) aff'd, 1998 U.S. App. LEXIS 37753 (11th Cir. 1998). Read the lower court and Appellate Court documents and opinion.

I agree wholeheartedly that "I just find it very depressing that people have to cut off their conscience to do their job". How did we get here? I blame the HR people as being the ones who fostered the growth of this environment. I also blame them for causing the situation you described regarding job separation and references etc. They are the ones who caused all of this by setting the tone and conditions of job interviews, screenings and references etc. You might also be partially right regarding "that there aren't enough laws (or enforcement of existing laws) to protect employees from "the boss"." however, it might really be a case of the non-reporting and non-litigating of violations. Again a situation most likely fostered by HR who neither will report incidents to the authorities nor support employees (or ex-employees) in any dispute with the "boss". Why won't they? They are protecting their own butts and just putting on a show. No different from what we just discussed about Benefit Managers.

I would say that all individual plans have pre-xs whereas group plans very rarely have them and when they do it is very limited (usually by negotiation with the employer). I have not seen or heard of any trend that is changing this long established practice.

Yes, a separate MERP. However, funded versus unfunded seems to be where the problem is. If you look at the books of that NP and also the funding calculation parameters set by the funding source, such as Medicaid, I bet that you will not see any support for the position that there needs to be an "expense". I have only looked at 2 NPs this year in response to exactly the same statement made by a fair size NP client. The other 2 NPs did not interpret the same way as my client NP. When the matter was reviewed and referred to their CPA it was agreed that they had misunderstood. In the past I have seen a number have greatly reduced funding and program eligibility based on similar misunderstandings. While the same might not be true for your NP, the track record suggests that the matter be reviewed. By the way, are you sure that there is a separate unfunded MERP or is it the section 125 FSA to which you are referring? If they already have an unfunded MERP, Has it caused any problem with their funding? Since you stated in your original post that "They are ok with incurring additional costs and administrative requirements to gain comfort that the funds will be available even if grant money dries up" , it probably is best to use either a trust or a bank account set up in the name of the New MERP. I would use the bank account method. The Bank Account should create the necessary "expense" that they think they need. I do not think that a Trust is needed since this is all employer money, but that thought needs some review.

Lori, Why the concern with the employer having "wiggle room" on the Sec. 404 calculation ? Are you trying to exceed the $50,000 or the calculated limit? A number of posts are discussing the "deduction limit", however, I read your post to be concerned with an employer match or contribution and not the employee's deferral.

The Reserve Account or Fund is a bookeeping entry, unless for some reason you think it should be set aside in case the employer runs out of money or will renege. If that is the case then you should use either a Trust or a separate bank account. The Trust will have a cost and an administrative burden and quite likely might also have reporting (this is off the top of my head, so do not hold me to it yet). Additionally, once the money is in the Trust it most likely cannot ever revert to the employer. However, a separate bank account would still be the employer's general asset but will be more visible to those who might want some feeling of security. Both the bookkeeping and the separate bank account methods are on the employer's General Ledger and still employer funds and if not used remain employer money. They are both the same so choose the one that feels better. It is an item that needs both the PD and SPD.

"Do you see tax issues with any (pre-tax) contribution made by the employer?" An employer's contribution or payment of all or part of any premium is not pre-tax and not under your Cafeteria Plan. Pre-tax amounts appear on the employee's pay stub, employer's contributions do not. The pre-tax amounts are the amounts that the employee elects to have reduced from their wages under section 125. Employer's contribution, whether partial or full premium, are excluded from the employee's gross income because of section 106 not section 125. Maybe I do not understand your question, because I see no problem or even a reason why you have an issue with the $300 - $500 change. Re"Part of the problem is that we are limited by our payroll system in our ability to implement post-tax payroll deductions for benefits." I suspect that the real problem is not your payroll system but the persons using it. If it is your policy not to allow late enrollment, Why are you questioning yourself this time? I hope that this "no late enrollment" is written in both your SPD and Plan Document. If not you really are taking a risk in denying this person by adding restrictions beyond those of the insurance carriers and your own PD.