GBurns

The medical expenses of 105(b) are different from the medical expenses of 213. HRAs and HSAs are 105(b) plans. 213 only provides the definition.

Not everything has a cite. For example there is no cite in the IRC or the Treas Regs that states " An employer may use a 401(k) Plan from Fidelity". Certain things are obvious and need no cites. IRS Publication 560 on page 3 states under the heading "Last Date for Contribution" for Simple 401(k) that it is the due date of employer's return (including extensions) and for Qualified Plans, Due date of employer's retun (including extensions). The IRS gives no cites.

Pata Re: " No cite though. Something to hang your hat on is always nice! " The post stated " here is a Q&A from the Bisys Individual(k) plan site:" I read it and then looked at the Bisys site to see what they cited to support the quote given by the poster. The site is loaded with information and cites. I would never have expected a poster giving a quote from someone else to also give the cites that the person making the quote used. That is asking much too much telling me where the quote came from is enough. It was very easy to look it up myself.

So you were addressing lodging, an issue that the post never raised? What you stated in your post re 213 etc re qualifications etc and your comment that an ND would not qualify etc is simply not reflected in the Revenue Ruling anyhow.

Read it again and read the original post. It is not and never has been my advice. I have rendered no advice.

Blinky Although we are both doing the same thing, as you see it, I am curious. Which is which or Who is which?

For example: Your post: "There is no reference to the qualifications of the individual providing services with respect to the above." "so I'm not sure an ND would qualify." The Rev Ruling: "Amounts paid for medical services rendered by practitioners, such as chiropractors, psychotherapists, and others rendering similar type services, constitute expenses for `medical care' within the provisions of section 213 of the Internal Revenue Code of 1954, even though the practitioners who perform the services are not required by law to be, or are not (even though required by law) licensed, certified, or otherwise qualified to perform such services." "Amounts paid for medical services rendered by practitioners, such as chiropractors, psychotherapists, and others rendering similar type services, constitute expenses for `medical care' within the provisions of section 213 of the Internal Revenue Code of 1954, even though the practitioners who perform the services are not required by law to be, or are not (even though required by law) licensed, certified, or otherwise qualified to perform such services."

As implied by the original post, the employer just does, no mechanism, no plan amendment, they just give it and allow it. The posted seemed to wondering if this could be done. As I posted: "How do they accomplish it? Simple! Do exactly as the original post stated... you offer it as part of the benefits package. That is what the question pertained to. That is all the post stated. Why assume that something else must be done and why must it be only the way that you assume? If the poster had something else in mind, they would have posted so."

Mike Preston, The IRS got it right, but reading your post shows that you did not.

You seem to believe in the old saw.. If you cannot dazzle them with brilliance, just baffle them with ....

The link was to PLR 200012084 which is a simple PLR giving the requested conclusion that the Trust is an integral part of the City, nothing more. It has no bearing on whether the plan described is allowed or not and even specifically states that this ruling gives no opinion on the federal income tax consequences of the transaction described. The PLR also states in the description of the Plan that only the City contributes to the Trust and that no other person is allowed to contribute meaning that there are no employee contributions. Why did you think that it allows pre-tax contributions? Since the employee makes no contribution there should be no election to participate. Even if there was an election by the employee to receive this "free" benefit Why would there be any need for revoking the election? The real question seems to be your opinion that "I think it's unrealistic for anyone to elect an amount or a % and not be able to change it for the remainder of their career." when no such condition seems to exist. There is no amount to elect or contribute even if there was an election to participate. Maybe the real problem could be the person giving explanations and descriptions that are questionable and not supported by the PLR. The PLR seems irrelevant and does not seem to mesh with the description in your posts. The PLR was not issued on the plan but on the tax status of the Trust.

So what does that have to do with the location of their office?

You can only run through the cafeteria plan's FSA the mileage related to medical care. I also would question whether the rate for medical related mileage is .375 or even .37. Look in Pub 502 for the rate which is a different rate than that used for other mileage.

The original post includes "since a new employee (unless he/she owned more than 5%) could never be an HCE in the first year so there is no discrimination" IMHO implying that after the first year that new employee would then be an HCE. As a result others posted " I wouldn't want to see what happens when the early entry is discovered and by then the participant IS an HCE!!!! " and "particular BRF means the NHCE-who-becomes-an-HCE has greater benefits earlier. " and "I guess I thought from the tone of the first post that this person was going to be HCE in future years ....a new employee who was going to definately be HCE in future years." and "those NHCEs who joined the employer that year and whom the employer believes will be a HCE in a later year". The general concensus seems to be that it was known and implied by the poster etc. Mike, Look up the definition and meaning of "irrational comment " then try and see how it applies to my comments which were mainly geared at questioning your comments. How does it become irrational to ask a poster questions such as "How and Where did this idea of an amendment come from?" etc? Or is it really that no one should question your comments and if they do they must be irrational??

RE: "If the original post is not talking about a plan amendment, then they are talking about operating the plan outside of the document provisions. " The poster asked "Has anyone out there heard of this technique and, if so, have you got something specific I can hang my hat on?" The poster did not know how it could be done but knew that the employer "could offer that specific person accelerated eligibility for the retirement plan" as part of a "recruiting package". The poster never mentioned or suggested a plan amendment. If a plan amendment is the only way to do it then that would be a suggestion for a responder to make. Instead what we got was a monologue expounding the problems of a plan amendment etc etc etc. No one had suggetsed that a plan amendment could or should be used. Why make assumptions rather than just asking the poster? Or is it that some people know it all and things can only be as they think it to be? That was my point.

How do they accomplish it? Simple! Do exactly as the original post stated... you offer it as part of the benefits package. That is what the question pertained to. That is all the post stated. Why assume that something else must be done and why must it be only the way that you assume? If the poster had something else in mind, they would have posted so. The post and nothing and nowhere else makes mention of or suggests anything else other than offering it in that manner. No mention or implying of any plan amendment. A plan amendment is solely your idea. Why assume that this is the only way that anything can or must be done? It seems that if the IRS "Step Transaction" doctrine was applied to this situation, it would be easily determined that it was discriminatory. It was known (as per the post) at the time of employment that this employee was going to be a HCE very shortly. The conditions were changed to facilitate this known situation. It seems a simple substance over form issue. It might have been different if this employee had to merit being raised to the status of HCE, but that is not what was posted. It also seems discriminatory in that at the time of employment, the other NHCEs at that same job level (class) did not have the same eligibility. Remember that at time of employment this employee was the same as all the others, except that his future was already planned and agreed on, but at that time and for some time afterwards he was exactly the same as the other employees in that job category or class or level. Should the benefits not have been the same for all?

I am told that in person my argumentativeness and propensity for confrontation makes for interesting and even exhilarating (sometimes boisterous) discourses, but most of all it is welcomed as a change of pace. Maybe, because in person you can see my smile and know when I am teasing or being cynical etc. BTW it never gets nasty or personal. I picked at the post not only because it seemed narrow minded and not thought through but also because it seemed cynical and denigrating of those qualified persons who use such locations. It also seemed that the poster was one of those who believes in form over substance, or show and hype over fact and competence. Such fallacious and/or misguided statements should always be addressed as a means of trying to stop it from influencing others. It is surprising how many people think that "I saw it on the Internet" equates with fact.

There are many M.Ds etc who do work out of their basements and Home Offices, just as was done in the old comedy show "The Cosby Show". The show reflected an actual fact of life that occurs not only in the rural areas but also in many older cities. Is there some reason why you think that it matters? If a "homeopathic guide" worked out of an office in a medical office building, would that make them any more competent? Do you think that having to display a license has anything to do with competence or legitimacy?

Mike Preston A lot of your argument seems to rest on "1.401(a)(4)-5 doesn’t appear to be your cite with respect to the one-time amendment itself.". How and Where did this idea of an amendment come from? I see nothing in either the original post nor any subsequent post mentioning that this employer was making any sort of plan amendment. Did I miss it? All I see is a special eligibility being made for a selected employee.

What is the benefit of cross testing a plan based on prevailing wage?

Although I have no idea what a ""pick up" letter under Code section 414(h)(2)" is, I do know that a PLR is optional not necessary nor even desirable unless there is some special circumstance with this particular plan design. Effective date, as with other Plans, is after adoption by the person/Board/Commission etc with such powers on behalf of the entity. What action, whether legislative or statutory that must first occur to authorize the use of such powers depends on the entity. This adoption is possibily what you mean by "the last governmental action necessary to effect the employer pick up ". The pick-up which is quite often timed to match the payroll cannot take place before adoption of the plan and its effective date.

Did someone claim that there were any "state laws or cases that govern the selection of TSA options." ? Did someone claim that "collection of reasonable charges for providing services to the plan do not make a 403(b) salary reduction plan of a TXO subject to the fiduciary provisions of ERISA." ? You always seem to bring up or invent issues just to either extend an argument or just to divert the discussion.

29CFR 2510-3-2 et al adequately explains the limited exceptions, which if not applicable creates the ERISA involvement. Even without ERISA, as pointed out to you many times in many threads, there are sometimes state laws that would apply when ERISA does not. The subject has been discussed many times in many ways, rather than rehashing obvious things, maybe some of the old threads will help you along with a re-read of the postings and 2510 etc: http://benefitslink.com/boards/index.php?showtopic=18566 http://benefitslink.com/boards/index.php?showtopic=14267

School districts do not become fiduciaries because "because the district permits employees to make contributions by salary reductions." They usually become fiduciaries because of being involved in other things such as the selection of providers; endorsing in various ways, whether directly or indirectly, the providers; the setting of marketing parameters; the collection of "administrative service charges"; and involvement in availability etc etc. A school district that limits their involvement to that of only providing a payroll deduction slot, making the salary reduction and remitting the reduction would not become, or have much chance of being made, a fiduciary.

If the dependent has these scheduled appointments for service set, for example, on the 14th of every month, and the claims administrator only reimburses at the end of the month, the reimbursement would be AFTER the service related to that reimbursement has been rendered. In fact, I cannot think of it being any other way unless an appointment is not kept and no service rendered in a particular month. As far as compliance and IRS audits go, this should not be an issue. The Treas Regs only require that the expense be incurred not that it be paid. the expense is usually incurred when the service is rendered. If the appointments are kept, then the service would have been rendered BEFORE the reimbursement.