GBurns

Included and not usually itemized on a receipt for a precription drug is a dispensing fee. Are you saying that you would want to exclude this also? Shipping and delivery or Shipping and Handling are the same as the dispensing fee (a charge imposed for handling etc) and are a component of the cost of the item prescribed and for which the expense was incurred. It also is a cost incurred for the treatment, cure and mitigation etc etc. Nothing says that the item has to be anything specific.

Did you ever find out what this "LEO" Plan was? I was guessing that it was just another Big 5 secret tax shelter that probable does not work as is frequently the case.

mroberts You need to clarify your statement. What is the relationship or connection between any 105 plan and Dependent care? How would any state law affect section 105 or section 125 as far as FWT, FICA etc go ? What list of covered expenses do you find in any regs that are applicable to sections 125 and 105? ......... The solution to the original post is to simply set up a self insured medical expense reimbursement plan as per Treas Regs 1.105-11.

The authority for what you want to do is found in Revenue Ruling 61-146 and was also alluded to in Rev Rul 2002-3. you might also want to browse some of the old threads as far back as 01/1999 for similar but more in-depth discussions.

Can licensed Real Estate agents and/or Independent Contractors participate in an "employers" group health plan and also use the section 125 Cafeteria plan to pre-tax their portion of the premium?

The "evergreen clause" as I know it would keep the benefits and elections that you made in the previous year. However, you seem to be getting a run around because if they applied the "evergreen clause" that they referred to that would satisfy you because that is exactly what you seem to want. But that is not what they are doing. You need to stop screaming at them and go to a higher authority. I was hoping that one of our TPAs would have weighed in with some advice as to who this "higher authority" would best be. Most of the plans that I am familiar with do not use this "evergreen" tactic, but instead use a default election that is prominently shown and communicated. I suggest that you make sure whether or not your SPD and Plan Document has an "evergreen" provision or it has a "default" election. Depending on which one is really there will affect your next step.

Medusa, What risk is there that the attorney assumes?? Are you regarding Treas Regs 1.105-11 etc as being proposed? You seem hell bent on defending this attorney at all costs, rather that thrashing out the issue.

Your solution lies not with your HR but with the Plan Adminstrator or TPA. What has the TPA said? The TPA or if there is none, the Plan Document provider should be willing to explain to your HR that since the benefit was not adequately offered to all eligible employees it could raise the issue of plan disqualification and disallowance. In addition the TPA or PD provider should also point out that eligible employees who are not participating should have signed a Waiver. Either of these issues are enough of a potential problem that they should be able to easily convince HR to correct the issue very quickly. I hope that one of our TPA experts will weigh in on this one. In the meantime take a deep breath, no one likes to help a squealer and threatening will only create obstacles.

The difference is in the details. If the plan is written under Treas Regs 1.105-11 which is titles "Self-insured medical reimbursement plan" then such a procedure is allowed. However, the post stated that this was done under a section 125 cafeteria plan FSA. There is no provision for an FSA under section 125, it is a provision under the Proposed treas Regs 1.125-2. So if the attorney is going to regard the Prop. Regs as "merely" proposed etc as Medusa states then he has absolutely no authority under section 125 that allows his plan design. You either use the Regs (Proposed or not) or you do not you cannot have it both ways. In any case, I think this has gone off the track. It is for the attorney to prove his case, for which I am sure that he cannot, ant not for any of us to "adequately demonstrate" to either him or Medusa, as Medusa seems to want. The problem lies not with us but with the proposer of an unsupported plan design.

Just point him to the Treas Regs 1.125-2 Q&A 7 in particular (B)(2) Example 2. Or send him to Tax Management Inc Portfolio on Cafeteria Plans or the EBIA Cafeteria Plan Manual. Better yet let him show the authority that he relies on for his position. It should not be for you to prove him wrong but for him to provide support for any position taken.

KEK.. What do you mean by "pre-tax premium reimbursement"?

WC is not something you can offer to an employee, it is something your company must have if it is so required by state law. It is no different from your General Liability coverage in this respect. It is also usually not some thing that can cover an independent contractor. Maybe you want to consider rephrasing.

What is wrong with an employee contribution only 403(B) plan? What makes a 457 the appropriate plan?

It seems like WC or LTD are the only recourse especially in light of today's ruling by the US Supreme Court in the CTS case of a Toyota auto assembly worked who sued under ADA and lost. I expect that today's news will carry the details.

KJohnson, I am trying to track down the Legislative history of section 125. Do you have such material also? Can you give the names of some of these benefits research cos who might also have it?

No one can sign away a constitutional right nor can they waive a federal law requirement. A simple call to a lawyer who specializes in Contract Law or the Law Library librarian should provide a reference and cites. A search on one of the law sites should help.

Contrary to what many people seem to think we do not have a Free Market system, however, we aare a society of laws. The original post asked the question "Is it legal..." to do what was done. The employer made a commitment but although that commitment might be changed, there are laws governing the change. Was the emplyer compliant? For employees to want an employer to observe the law does not seem unreasonable nor does it seem that they want cradle to grave benefits etc. They seem to want what the law provides. To ask any person to put their tails between their legs and walk away from mistreatment is to show total disregard for the freedoms that we enjoy and for which so many have fought for and died. Employees have to take a stand for their legal rights. There have been too many meltdowns of employee rights and benefits by taking the position of subservience that some are advocating. It is the laws of this country and the enforcement of them that makes this an amazing country. All the original post asked was "Is it legal...?"

I think that you would be much better off posting your question on other sections of this Board, try "Form 5500" and "Health Plans".

Have you tried using the material developed by the OPM that developed to address this same issue when the Federal Gov. was putting in their Cafeteria Plan last year? There is also some material available in the Q&A etc on the SSA site. This plus the OPM material should allow you to show authoritatively how little the impact will be etc.

How do you use COLI to fund the liability? Who is the insured? Who is the beneficiary? Who is the owner? If the response is too lenghty can you refer me to any cites, sites or material?

In most school districts the plans are already set up with different benefits for different classes. The Administrators get different benefits from the Educators (Teachers) who get different benefits from the Custodians and Food Service personnell etc. There should be no issue following the same "class" structure.

It is very difficult to do and impossible in most states. The usual thing is to form a "coalition" or "alliance" and negotiate as one large group. Examples are Pacific Business Group or any of the large alliances. However, they ALL purchase separately under separate contracts.

It is very difficult to do and impossible in most states. The usual thing is to form a "coalition" or "alliance" and negotiate as one large group. Examples are Pacific Business Group or any of the large alliances. However, the employers within these groups ALL purchase separately under separate contracts but based on the rates negotiated from the strength of the "alliance". The rates are calculated separately and the underwriting etc is also separate for each employer. The "power" of the group and the "promise" of the business is what gets them a "discount".

The NY Times article points out that: 1. The money in the Fund is not Marsh's money but was donated by staff, friends and wellwishers. 2. A survey of 10 similarly large employers determined that they were offering even better benefits but were paying for it out of their own money, even those with similar Funds. The gesture by Marsh is therefore not one of largesse or any sort of compassion, it seems to be a cheap way of using other people's money and claiming the credit for the philanthrophy.

A MEWA is not something that you should "feel" that you have, it is something that you should know. The consequences of using a MEWA can very severe in many states. Calling things or positions something that they are not is also dangerous. A Broker is a Broker, a TPA is a TPA, a MEWA is a MEWA. To use terms as "shorthand" might lead to misstating and misinterpretations. That is probably what happened with your DOI. If your language and terminology is different to that of the person to whom your are communicating, theie response or answer will most likely be incorrect. To "use" the same PD, as you previously said, is not the same as "adopting" the same PD. It makes it a MEWA in most cases if the unrelated employers are in the same "arrangement" and "pooled" together.