GBurns

It does not matter if it is collectively bargained or not. Some CBAs only specify that the CBA covered employees are allowed to join the Plan. Whether it is the employers general plan or a separate union controlled plan is an issue separate from the CBA. The best advice so far is to approach either an employee or the Admin office (whether at employer or at union).

How can anyone be on a payroll who is not rendering service or on an approved leave of absence? And certainly no direct recourse gainst the Plan. But, if this is embezzlement, Why would the client need resources to have the alleged embezzler prosecuted or if it is the alleged embezzler who has no resources, Who cares? Prosecution for embezzlement as with all criminal activity is done by the government not the victim (client).

It seems convenient that you disregard the many more recent comments from Harry Beker and others from the IRS addressing the exact point and are using an excerpt from an old statement taken out of context made by John Hickman claiming that "the example John Hickman raises is exactly what we're referring to". It is not. The issue has subsequently been clarified by IRS people (which John Hickman is not) in the many subsequent comments. Regardless of what John Hickman says the Revenue Ruling does not address any pre-tax salary reduction. Just read it. Also it would be helpful to cite where you excerpted the statement from.

I think that you have misread 61-142 and grossly misunderstood the issue.61-142 does nothing similar to what you are implying. The reimbursement in 61-142 is from the employers assets and not from employee funds as your example entails. If you have already paid the premium after tax and then Pre-tax the additional, Where does this pre-taxed amount go? The Treas Regs show that this MUST go to an FSA whether in or outside a section 125 plan and that the Proposed Treas Regs still apply. Similar thought is in the Notice etc re HRAs. In addition, What medical expense would you use to reimburse the $100 that you are pre-taxing? You cannot use the $ 100 that you paid on an after tax basis since doing so would mean that there was no purpose to have paid it after tax in the first place. You cannot use the pre-taxed premium (see Rev Ruling 2002-3) so you would have to use other incurred medical expenses to trigger the reimbursement. If you have to use medical expenses NOT including the premium so you are now running the risk of "use it or lose it" if these other incurred ME do not amount to $1200 per year. If you want to read all the comments made by the IRS just go to the EBIA website, they are all there. Your last paragraph makes no sense since 61-142 has no connection to pre-taxing or section 125 not withstanding that 1962 was long before 1978.

Why would this IRA have been turned over to the State in the first place? Why would anything have benn reported to the State?

Just stop and think about it for even a second. If the premium is paid through a cafeteria plan it is paid pre-tax. There is no other purpose for the cafeteria plan. A reading of 61-142 and the IRS statements on double dipping and other statements by the IRS regarding the reimbursement of individual or any premiums show no mention of the use of a cafeteria plan. The clear reason being that you cannot reimburse the premium if it was paid through a cafeteria plan. The reason that "health coverage can be provided through a cafeteria plan, and reason is because an employer can provide it on a tax-free basis to employees " is NOT IRC 105 but IRC 106. Where did you ever see that "the IRS has infomally acknowledged this as long as it's strucutred as a separate benefit"? As the recent revenue ruling regarding OTC pointed out 213 only provides the definition of the expenses of medical care not the items themselves. The items in 213 are for 213. Section 213 is in Part 7 of the IRC and is titled "Additional Itemized Deductions for ...." whereas 105 and 125 are in Part 3 of the IRC which is titled "Items specifically exluded from Gross Income". Itemized deductions are taken on Schedule A and cannot be pre-taxed. Exclusions are pre-tax items which cannot be entered on Schedule A. Read the Revenue Ruling. Your faulty logic is the same faulty logic that is used by the promoters of the double dipping arrangements that led to Rev Ruings 2002-3 and 2002-80.

But how would escheat come into play? I would think that an uncashed check would either have been destroyed, or in the possession of someone who either could not or would not cash the check. How does the state get into it? I understand that bank account balances under certain circumstances fall to the state's possession and if unclaimed eventually is escheated, but this is not such a balance and there is no checl lost or otherwise. Re Illinois etc, What is it that caused them to go after uncashed checks? How did the State get possession of these checks? What law empowered them to hold the checks rather than forward them to the Payee or payor and instead knowingly held property to which they had no claim (at time of receival)? After 6 months or so the checks are no longer any good anyhow so how would they be able to negotiate the checks for funds?

eafredel, Why would state escheat laws be applicable? If a participant is deceased should it not be either a will or state intestate laws that are applicable rather than forfieture to the state? Re the original post: If the beneficiary is not locatable because of lack of a valid SSN there are other means such as through the Probate Court, IRS, SSA etc etc. Have these sources been used?

Your use of the term "remaining" implies that some portion of the required contribution was made by the original employer, leaving an outstanding balance. Is that correct? Is this PS contribution allocable to a particular year or period? If it is for plan year 2002 How can it be delayed "4 to 5 years"? What is a "partial plan termination"?

Thanks asire2002, I thought that I was missing something. All the DLs that I have ever seen only address the tax-exempt status of the Plan (trust) and not the design or operational features etc. This looks more like an issue for a PLR or Info Letter rather than a DL.

Revenue Ruling 2002-3 pointed out that you cannot reimburse the premium that was deducted on pre-tax basis. The only way to have deducted premium on a pre-tax basis would be through a section 125 plan. Therefore the Rev Ruling is saying that you cannot reimburse premium that was deducted through a section 125 plan. If I remember correctly, Rev Ruling 2002-3 did state that 61-142 was distinguised meaning that it was a separate issue, facts and circumstances not related to this issue. 61-142 had no section 125 cafeteria plan or pre-tx deduction. The IRS did say that premium could be reimbursed but through a separate account, but that was not through a section 125 cafeteria plan and not where there was any pre-tax deduction. The IRS has never said that premium could be reimbursed through a section 125 plan.

lgolden, Re: Question (2) There must be a written Plan. Did you ask this employee of the client, Who and What authorized any employee of the company to: 1, Pay for employee health benefits? 2. Enter into a contract with BCBS or anyone else? I cannot imagine BCBS not asking for an Adoption Agreement or Board Resolution etc.

Good question. I have always wondered about these issues but never had the time to really look especially at the State requirement (in most states) that there must be written authorization for ANY deduction or reduction from salary. And I have never seen where ERISA preempts any state labor law. Before the Fl DOL was disbanded they said that written authorization was needed and ERISA did not pre-empt. Maybe it would be best to ask some of the providers of on-line enrollment services for their legal standing.

moosegirl A separate section 125 plan still would not allow such "reimbursement". Such reimbursement would be done through a section 105 medical expense reimbursement plan. Why do you use a section 125 plan for this? Is the employee making a salary reduction or does the employee have some sort of choice that would have created a constructive receipt issue?

I can only reflect back on a couple dozen plans but I tend to agree with QDROphile that most plans (to which this is applicable) were not written to cover this, which is probably why there was a need for PLRs such as 9652031 years later and more since. PLR 9652031 illustrates the need to document the methodology chosen.

Generally NO. See Revenue Rulings 61-146 and 2002-3 etc. Why "generally" because I do not know for sure what you mean by "reimbursement" and "Can a 125 plan allow for reimbursement of insurance premiums ". A 125 plan never allows for reimbursement of any kind, however, an FSA within a 125 plan could reimburse eligible expenses (not including other insurance premiums???).

jane123 It is very dangerous to develop your own in house meanings for terms. How will you know whether things you do are correct if the terms have meanings that differ from what the industry, the IRC, the Treas Regs, the DOL and case law uses? How will you understand any new releases of info?

I do not see where this is a question af paying interest on benefit claims. Doctors do not make benefit claims. It is a question of paying interest on provider claims for services rendered. How prevalent is this as calimed by mbozek?? ... "Every contract between a SElf funded plan or HMO and a provider who treats participants that I have reviewed requires the provider to accept the amount determined by the plan/HMO. The provider is required to sign the contract before submitting claims to the plan/hmo. " The plans that I see have an agreement between the Plan and the Provider Networks (Beech Street etc) and not with the Doctors. The Doctors etc have a contract with their IPA, with the Network/HMO or with the Insurance Company NOT with the Plan. I also do not see much of ... "A provider who accepts payment from a Plan/HMO under an assignment " Mainly because the providers that I see do not accept any assignment, they simply bill for services rendered. In fact, I do not see where there is anything for a plan participant to assign because there are usually no values stated in the coverage only rights to service, limitations and exclusions. For example coverage is given for an Office visit, but while the co-pay is stated the value of the visit is not, so there is no known value to assign and I cannot see any insurer allowing an open ended liability. I also cannot see plan participants being allowed to assign something whose value is not known.

Find a friendly employee, buy them lunch and ask for help. Other than that follow Mike's suggestions. I thought that TSA etc sales reps knew all these "tricks" by now.

A provider claim is not a plan issue. I doubt that anyone on this forum can find provider relations, provider contracts or provider payment issues in any PD. Provider payment issues are subject to the contract between the provider and whomever the contract for payment is with whether a Claims Administrator or insurance company. This contract is most often with either the PPO in self-funded plans or the HMO/Insurance Company in fully insured plans. The cases cited such as In Re Managed Care has nothing to do with whether the providers were being paid for rendering service to partipants in fully insured or self insured plans, the claims by the Doctors covered ALL types of payments under ALL types of contracts. In Parke vs First Reliance cited by KJohnson it was a plan participant suing not a service provider. This case cited Knudson which again is related to a plan participant filing suit re benefits related payments. None of these cases which are ERISA cases involved service providers but involved plan participants who receive benefits from the Plan at question. Doctors are service providers not plan participants. Doctors do not receive benefits from plans.

Steve, From mbozek .."ERISA preempts all state laws that pertain to a self funded plan which is not a MEWA, including insurance laws." However, his post was in response to my post ..."ERISA pre-empts those laws that pertain to benefits not those that pertain to insurance etc. Payment of claims from providers is not a benefit issue and providers are not plan participants. His response had nothing to do with what I posted nor with the original post to which I responded. The problems that providers have are very often not solved by ERISA litigation but otherwise, for example: http://www.businessinsurance.com/cgi-bin/news.pl?newsId=2929 Note that "He also ruled that the health care providers were entitled to pursue such a claim under the Pennsylvania Quality Health Care Accountability and Protection Act. " A similar situation exists in the case/cases before Judge Moreno in Re Managed Care Litigation. Not every issue between service providers and health plans is an ERISA issue. That is ALL I have pointed out. ALL that I pointed out is the simple fact that not every issue, whether for self-insured or fully insured plans, is an ERISA issue.

I do not think that that is what eafredel stated. The PD can include the SPD etc but the SPD is not the PD. A PD does not and should not informally do or contain anything, it is a required formal document and should be treated as such.

Whether this is a "true VEBA arrangement" or not has no bearing on the conditions quoted by HarveyC from the Form 5500 Instructions.

mbozek, The point is that ERISA does not "preempt all state laws" as you constantly erroneously usually claim... It depends on the issue, fascts and circumstances, which is why the cited post ststes, if you read it, "The Sixth Circuit had held that the Kentucky law was not preempted because it regulated insurance." That is ALL that I said ... ERISA does not prempt "all" everytime, nothing more.

There are some states where the insurance laws require that policies have a conversion feature.