GBurns

Did you really mean to say "that some employers believe that it is a good idea to have separate VEBAs for actives and retirees based on the differences in the 419A account limit rules and the UBI rules." or did you mean some promoters convinced or try to convince some employers? I would also question your comment that "the real answer is that there are different strategies for how to fund and invest the assets." It more likely is that there are different sales ideas being promoted that really should be questioned rather than regarded as being answers. As Kirk asked...Has the IRS bought any of this approach?

There is no algorithm usage in what you have outlined, all that you outlined are simple matching of the data within a field and not the use of a formula or procedure for solving a problem, which is what an algorithm is and does. The use of the term seems like sales hype to make something seem more complex or important thereby commanding a higher price. All fluff no substance makes me wonder about the quality or effectiveness of the work.

If all retirees (regardless of previous job title) get charged $1 and all actives (regardless of job title) get charged $100, why would something be wrong? There were no other classifications given and no mention of the possibility of any sub-classes within the 2 given classes.

Here is the link: http://www.benefitslink.com/mbmirror/869.html

Do a search of the old posts. There was an excellent discussion over 2 years ago ans someone provided a super worksheet which you could upgrade to find the crossover point.

It is all in how you sell it to them. An illustration is necessary showing the earnings even with investment in a Money Market Fund, a GIC or other guaranteed investment (fixed annuity, CD etc). $120 monthly deferral + employer match $6 = $126 x12 months = $1512 account balance at end of year. A 5% minimum return. Add the fixed interest and show maybe 9%. Stress the tax savings and compound interest growth and you could be showing them close to 15%. Most of the better 401(k) investment providers have excellent employee communication material, make use of it. What will your provider do to help? This should be a major factor in your choosing a provider. Who did you choose? Why?

alanm raises the important issue .. Is there really a plan? The original post said that the plan was a single employer plan by the PEO. Therefore the clients who joined would create multiple employers joining a single employer plan. This sounds like a disqualification which would mean that there really is no plan. So whether it was a merger, transfer or rollover, it might have been to an ineligible plan. I would seek competent legal advice from someone not connected with the PEO or plan.

What "executive loans" are you referring to?

What sort of algorithm could you possibly use to determine claims maximum overpayment (whatever that is)?

Does anyone have any idea (or reference source) of how many employers are allowing the supplemental accident & health plans other than Cancer plans that are being sold? The main plans are apparently the Sickness & Accident and the STD plans. It would be nice to find out employer paid versus employee paid and pre-tax versus after tax premium patment. I thought that these plans were quite popular, but during this week alone I have had 2 benefits attorneys fron top 100 (possibly top 50) law firms and 1 HR Director at a college tell me that they have never heard of these plans and were not aware that such plans could even exist that paid benefits for injuries etc.

I do not understand your post. Health spending arrangements whether FSAs, 105(B) or "new" HRAs are all self funded plans. Usually these are all used in conjunction with a medical/health insurance plan which can be whatever it wants to be.

Why would you think that the employer gets back the unused FSA money and not the Plan or the plan participants?

Unless the audit (and they do take place) shows a pattern of abuse or mismanagement, occasional errors such as these or even frequent but rationalizable errors, that can easily be corrected within the plan year are not cause for disallowing the plan or affecting other plan participants. The usual position taken by the IRS in training and in public comments has always been as Mr. Beker restated at the March ECFC Conference: ==> WHAT TO DO WHEN AN EMPLOYEE IS REIMBURSED FOR AN EXPENSE THAT SHOULD NOT HAVE BEEN REIMBURSED. If a health FSA reimburses an expense and it is later determined that the expense should not have been reimbursed (e.g., the expense was not for medical care, or the expense exceeded the employee's limit), the IRS says that the employer cannot just report the excess reimbursement amount on the employee's Form W-2 as imputed income. Rather, the employee must repay the amount to the employer with after-tax dollars (e.g., by writing a check).

What are they trying to sell under the VEBA? Since the start of this year there has been numerous cases of actions taken by a number of state DOI against unlicensed entities many of whom were unlicensed health plans and also selling them under alleged multi-employer plans which were deemed to be MEWAs and therefore also illegal etc. A number of these groups have tried to replace the unlawful or unlicensed coverage with other unlawful or unlicensed coverage and some will continue to try to do this. It is not as important to know the current names being used as it is to know who is using them. I t might be prudent to get more details on the promoters etc (names of principals, addresses etc) then run that info by your state unlicensed entity investigators to see if any of the names are familiar to them and why. Y ou might also want to do the same thing with some of the more active state DOI, Texas, Louisiana, Kentucky, Florida. Also check the names and addresses on the Court Orders at www.texasreceiver.com and on Order 02-0487 on the Texas DOI website. MEWAs are most likely not allowed in your state so ask your DOI. Also VEBAs and MEWAs are not things sold by agents, they are legal entities set up by lawyers. An agent could promote the services of a lawyer who will set these up for you, but an agent should not be selling one or setting one up.

What does being a "501© plan" have to do with being a Supplemental Unemployment Plan? What does "501©" have to do with the benefit ?

The National Council on Compensation Insurance, Inc (NCCI) has a rule book that is divided by states. I do not know their website but any WC sales rep should be able to give you the info you need. [Editor's note: This link to a commercial firm might have useful information: http://www.hrollp.com/practice-areas/labor-employment/workers-compensation/list-50-states-d-c-s-workers-compensation-agencies/ ]

If you have illegal aliens working for your company, I suggest that you not worry about the 401(k) matching funds. There are many much larger and expensive issues to worry about first.

The only time I ever heard of them was from a School District in the MidWest that claims to have been approached by a C-Biz rep. Maybe one of their local reps could help you. Let us know, I am also curious, but have not been able to find a rep in S. Fl.

That still leaves questions including............ What UCR? Which UCR? How was the UCR calculated? Why not use negotiated fee schedules? Why would the reimbursement to even an out-of-network PPO be paid at billed rate rather than being subjected to re-pricing etc?

The reason for the question was that for quite a while now, all the self funded plans that I have been seeing were comparing or benchmarking the discounted rate negotiated with the provider. In other words a comparison of the discounted rate rather than the original UCR. The premise being that it does not matter what the UCR is, it only matters what your reimbursement rate will be because that is what you will be paying. Benchmarking is done against the average for that Code. I have also not seen any PPO or POS that reimburses on UCR all I have seen are reimbursements in accordance with negotiated contract rates. The contract rates sometimes were sometimes not negotiated as a discount off of the UCR but were developed otherwise.

I am curious as to why a database of UCR is used. What is the purpose?

You should be able to find this info on the Bureau Of Labor Statistics or the MEPS website, most likely the latter.

Moe ... The question still is.. Where does it say that only 1 test must be met? Where is there an "or" that shows that only one or the other must be met and not both as in "and"?

Moe.. Where is it stated that " a plan will pass the ELIGIBILITY TEST if it complies with either the "percentage test" or "the classification test"."? 1.105-11©(1) state "unless the plan satisfies subparagraphs (2) and (3). There is no "or" that I can find. Without an "or" means that both apply.

I have to side with Kirk.. Treas Regs 1.105-11©(ii) is titled "Classification test" and it clearly deals with the ELIGIBILITY to be in the plan to then get the benefits. It is not a test of receiving the benefits. In fact the whole section mainly deals with Eligibilty e.g the very next section (iii) continues onto "Exclusion of certain employees".