GBurns

What is the relationship between the spouse not working and the expenses for dependent care not being eligible? remember you are addresssing a DCAP not a Schedule A. Box 1 of a W2 carries all wages, salary etc regardless of whether any amount was withheld or taxed unless specifically excluded by some other provision of the Code or reportable elsewhere.

Yes, a 105 plan could be set up to reimburse the employees for premiums paid with AFTER TAX money. See Rev Ruling 2003-3 and Rev Ruling 61-146 for the conditions of such reimbursement.

I have a similar interest in internet marketing and am seeking help. I looked at Leapfrog and could not see where they offered anything of interest in this are. But I have been unable to locate Digital Impact or DEI Marketing. Can you provide any contact info?

What else could you do with the money in the benefits bank? How come the bank builds up other than a minimal surplus?

Thank God? 1 should have been enough.

A simple answer might not serve you well but a simplistic one might serve to put you in the right direction. However, you do need to do some research and reading to better understand. In a nutshell Section 125 allows an employee relief from the constructive receipt rules of section 451. This relief is enjoyed by making a choice between cash (taxable) and certain qualified benefits (non taxable). The amount by which the employee elects to have his/her compensation reduced to pay for the selected qualified benefits are not included in the employees gross income, hence it is not taxed. The employer might provide a selection of benefits from which the employee can choose, much like a menu, hence the term Cafeteria Plan. You select what you want from the menu and your salary reduction is used to pay for them. These qualified benefits are group term life (section 79) medical benefits (section 105) dependent care (section 129) and a few other items. Section 105 governs the benefits derived from accident or health plans whether ifully insured or self funded (self insured). Accident or health plans include medical or health arrangement, dental, vision, Disability (short term and long term), workers comp (to an extent) and medical reimbursement plans. In fact Treasury Regulation 1.105-5 is titled Accident or Health Plans and is where the definition of such plans comes from. Treas. Reg. 1.105-11 is titled Medical Reimbursement Plans and provides the rules for such plans except for FSAs that are under the Proposed Trea. Regs 1.125-2. Section 125 does not govern benefits it provides relief from taxation of a part of your salary. Section 105 governs the taxation of benefits received from accident and health plans. A Cafeteria Plan provides a method of choosing what benefits to buy.

Although I am not yet offering my opinion, I must ask, Why do you regard the payment of the deferred compensation as being pension income? In what box on the W2 do you report these amounts etc?

Unless there is some contractual reason (employement or collective bargaining etc) the employer can do as he wishes. There is no legal requirement (except in Hawaii) to even provide health insurance much less to pay any particular portion. However, the employer should be aware that either state law (especially for small groups)or the insurance contract (most carriers for even large groups)usually have a mandatory employer percentage contribution that is built into the premium rate and is therefore a part of the contract. To make the change that you indicate might mean violating the insurance contract and could have severe consequences.

Aside from any HIPAA issues, What does your plan say regarding pre-xs? Outside of self-funded plans and small group plans, I do not remember having seen a pre-ex in a group plan for quite some time.

I am curious... why is there a concern for "inactive" employees? Usually I find that "inactive" relates to being on an unplanned leave of absence or extended leave related to FMLA etc. Terminated usually means no longer employed and no longer on the payroll, any payments due for structured severance, vacation etc is usually an Accounts Payable item not a Payroll item.

While I do share your "unwritten" sentiment that quality does not mean large size, I find it necessary to use a standard unit of measure... Revenues.

Thanks. It does seem that BI is the only thing out there.

mroberts, I dont think that you quite understand what Gregg or I mean. "And as far as the opponents of these plans go, no they don't pay a lot. Usually less than most PPO plans that are out there." This implies that you are regarding the DC plans as being an alternative to PPO plans etc. To most of us DC plans are alternaive funding methods for whatever health insurance provision method that is used not plans themselves. Regarding employees not knowing the costs etc. That really should be corrected by education including employee benefits statements, disclosures at open enrollment etc and not through a "plan" that they do not understand and which the industry still cannot define much less understand. If benefits people and insurance providers habe not yet understood, How can you expect the employee to understand?

Now all of this raises the question of, What is a DC health plan? There seems to be no definition. The Aetna and Humana models are very different from the Definity which is different from the Vivius which is different from the "fixed Benefit amount" used in the Benefits Credit approached long used by many employers. Melinda..... What do you mean by DC ? Is there a particular version that you are seeking info on?

Considering that last year the IRS moved the issue from an item that was under extensive review to an item that they will not rule on, what and where have you seen signs of them endorsing any aspect of the tax issue? See Section 3 of Revenue Procedure 2002-3. For the historical No-Rule position on these issues see the 3rd Rev Proc of any year since 1989, eg 1999 is Rev Proc 1999-3. Even if the tax issues are resolved favorably there are still the state insurance law issues that affect a large number of the plan designs. Then there are the issues of adverse selection which would affect renewals and the issue of whether or not they really are of benefit or danger to employees when they eventually have more than minimal medical expenses or worse have the MSA money in investments that "melt down". There are too many "ifs" and "maybes" for my liking, especially since most of the plans have not even had a full calendar year of experience or rate renewal, and yet there are horror stories already surfacing.

Can anyone provide or direct me to a listing or source that shows the largest or Top 50 etc employee benefits consulting firms?

Can anyone provide or direct me to a list or source that shows the largest or Top 50 etc employee benefits consulting firms?

Can anyone direct me to a listing or source that shows who are the largest or Top 50 etc employee benefits consultanting firms and their size or revenue?

Can you give any cites to these IRS support guidelines. I know of many large employers who have "on-site" programs which are referenced in their employee handbook and employment contracts as being part of the "on the job training" and which programs are also degree granting courses run by recognized colleges/universities as off campus locations yet qualify under the various tax credits and allowances etc for deductibility etc. If they qualify for the employee and employer I wonder why not for a dependant.

While the majority of articles are more advertorial than not there are a few that really explain the pros and cons. There are mostly cons especially from a tax perspective. Here is a good recent article written by one of the people most qualified to write such an article. http://www.groom.com/articles_display.asp?display=161 Aside from the fact that the IRS has long refused to rule on one of the aspects on which such plans rely there is also additional clear law that would give even a risk taker cause for concern. Here is another article. http://www.benefitnews.com/subscriber/Arti...cfm?id=37880462 In some plans there are also state insurance law issues that have to be considered and which are not in these articles. In my opinion there are too many unanswered questions to make these plans viable.

I am surprised at how often I hear this question, but usually it has to do with PEOs. Prop. Treas Regs 1.125-2 Q&A 3 defines a Cafeteria Plan as a plan maintained by an employer for the benefit of its employees. If you do not like the rest of that Q & A because of either the fact that the Regs are Proposed or that there is a reference to section 89 there are many many other rules (DOL, IRS, state insurance law, insurance contract etc ) that dictate that there has to be an employer provided plan. I do not think that Company B could ever be the employer and if it is a PEO it most likely could not be the "common law" employer either. Remember that if you deduct pre-tax under a section 125 the rules apply Proposed or not. If you deduct pre-tax under another section of the IRC you most likely will see the IRS in court. Also there are state insurance laws pertaining to List Billing by insurers to employers. In general, the situation that you posed most likely would be disallowed as a pre-tax deduction by the employees.

I should point out that the agent is not a responsible party nor a party eligible for service of process etc, so any request should be sent to the company in order to be binding. The agents usually are Independent Contractors or at best Statutory employees. Even if this was a salaried company employee, the agent would still not be eligible for anything that would be binding or for which the company could be held responsible. Remember the contract is with the company not the agent and the agent is not a company officer etc.

A cafeteria plan is not "for medical and dental expenses". It is for the choice between cash and qualified benefits. The current qualified benefits do not include legal expenses.

You are right. I did not realize that it has been around for almost 6 years. There still seem to be a lack of investors or distributors.

The site mentions that the loan is unsecured and that there is a "No-Loss Guarantee". Carefully, used as they suggest, it seems that the risk could be on the Lender not the employee. I have only juggled some basic figures but so far I see no problem with the basic mechanics. However, there could be problems with the terms and conditions etc. in a particular case. In any case its viability, assuming that it is legal, seems to be a case by case determination. Regarding Enron, it seems that an Enron employee using the "No-Loss Guarantee" would be no worse off. In addition, using a default against an unsecured loan would also have made them no worse.