GBurns

Insurance companies are not charitable organizations, they are in business to make money. One popular way to make money is to not pay claims. To do this they set up elaborate schemes with supposed deadlines and criteria which are difficult or impossible to meet. If you have a problem, I advise that you immediately seek a lawyer who is experienced and successful in litigating such claims. Make sure that you check their track record in this specialized area. Successful lawyers in this speciality will consider contingency fees. Do not try to do this yourself. I would also make sure that the DOI is brought into the picture ASAP.

Even if ERISA pre-empts the employers plan it still does not pre-empt the insurance providers policy. In general insurers providing services to residents of a state must file ang get approval to use the product within that state or must do an informational filing showing that the policy has been approved in the state of domilcile. ERISA has to do with the employers plan which can be insured or not insured. If insured there are other rules if self insured the plan itself is exempted by ERISA but the service providers are not.

Yes. You can use a Cafeteria Plan to fund post-retirement medical benefits on a pre-tax basis. there are numerous PLRs and Rev. Rulings on this subject. A few that I had hard copies on hand are 199902016 and 9513027.

While you cannot change the salary reduction agreement amount you can change the Payee. In any case this is a Loss of Coverage issue not a change of status. Under both the Final and new Proposed Regs. a change in election is allowed when the coverage ceases as was always allowed under old 1.125-2 Q&A 6 (B).

All the cases, like this, that I have seen were settled by the local DOL PWBA office. As pointed out you do have to make the formal written, return receipt requested etc, claim and request for explanation of denial and appeal etc, then let the clock run out. This can all be done under the eye of the PWBA. In my experience they can be very effective. In one case they instigated an IRS request for plan info and a state unemployment audit. If there is eventual civil court action they would be your best witness.

The employer premium is never paid through the section 125, only employee choice between cash and qualified benefits goes through the 125. If the employer pays 100% there is nothing left to pre-tax. What is being pre-taxed is the employee portion to cover an employee share or to cover additional choices that the employee voluntarily made. Even if it is a benefits credit type of scenario roughly the same is true. The employer can pay 100% for HCEs and 0% for NHCEs provided they are separate classes of employees under the Plan Documents. The employer could have an Executive Plan and a Service Workers Plan. As long as they are separate and there is no discrimination within the class it can be done, usually. I do not remember "key employees" being a consideration under 125 so you might want to look it up.

Yes. Most likely no. Definitely NO. However, this is because you said "reimbursement". If the money is used to pay the premium, that is okay. If you mean reimburse the employee for the premiun deducted under the cafeteria plan, then NO. You cannot reimburse the employee for the amount that was previously deducted on a pre-tax basis.

I suggest that you post this question on the Health Plans and the Cafeteria Plans boards.

It was all privacy and cofidentiality issues.

I know a life insurance company that got sued and lost because they told the agents wife that he had met a sales target and was receiving a bonus. If your company is ever going to do this get the employee's written permission and competent legal advice.

What makes an FSA exempt??

What is an individual health insurance premium reimbursement account and how does it work?

Before you get to the 5500 issue you should first realize that you most likely dont have a MEWA and it might not even be legal. Because the promoter said that it is a MEWA does not make it a MEWA. I suggest that you check with your state Dept of Insurance for registration of the MEWA (which is required of many MEWAS) and also check the DOL web site for their recent publication on MEWAS available in their Library under Publications under the Pension and Welfare Benefits Admin section of Special Reports. This guide was put out because of the large number of plans that were claiming to be either MEWAs or ERISA but were not, worse they were not even legal. You might also want to check the Florida DOI website regarding the recent action against NATP (and its 24 aliases) that was a similar plan to what you are describing. Also check Texas and Maryland regarding SAI. Also NJ regarding purported MEWAs, union and ERISA plans.

The definition of "accident and health plan" is found at Treas. Regs. 1.105-5. It is any arrangement a employer makes to provide or pay for the expenses of medical care for his employees and former employees.

Why would his signature be on the vendors checks??

Since the State Employees Group Benefits Program and other large employers in the state of Louisiana have regular FSAs, I suggest that you look again to make sure that there really is such a "suggestion", as you put it, in the law. In any case how could a state agency that is governed by and participates in the SEGBP set up its own Cafeteria Plan separate from that which is already in place as part of their plan. I would be surprised that there was such an insurance product. The nearest thing that I have come across was for a discriminatory executive plan (Exec-u-Care and Exec-u-Med) which would not be suitable for youe application.

What I was wondering was: 1. What years W-2 and what Quarter's 941 is the January 1 paycheck allocated to ? 2. What Quarter's 941 is the April 1 paycheck allocated to ? 3. What happens when some one is terminated during the month of December before the January pay date? The issue here relates to constructive receipt etc. that is why the period for which the service is rendered is relevant. As far as I know the date of the payroll determines the preiod of inclusion for W-2 and 941 etc. This company is accruing otherwise. The accruing for the FSA should be the same for the W-2 and 941 etc.

I think that you have to solve your payroll problem first. When the employee gets a check on January 1st, what is he being paid for? If he is being paid for services rendered in the previous year what do you report on the W-2? The FSA problem should also be the same as a Year-to-Date wages problem. The solution for both is the same. Decide what you are paying for and when and the report according to the when.

I have quite a lot of info but I have no way of relaying it to those with no email addresses. Re the message count, remember its only human to err, how much better can a machine be. Can it count a chad etc.?

I hated to reopen this thread but I have no other way of getting to card, beth beaube and SLuskin. So I do apologize to all. card, beth ans SLuskin, What was the final outcome regarding the plan that you were looking at? Did the promoter provide enough documentation to prove their point? Did any clients take the plan ?

I read the posts to be that Jeanine was adding a new benefit whereas boberlander wanted to change his FSA. A change to the FSA is not allowed for boberlander but jeanine seems to be allowable as the adding of a new benefit type. Jeanine, I suggest that you go over to the EBIA site and look up the series titled "IRS Officials Comment on Various Cafeteria Plan Issues" especially 8/10/00 -Adding a New Benefit type in Mid-Year and 8/24/00 - Automatic Cost Change Rules. There are also other valuable items so take a good look. This should point you in the right direction.

Regardless of what any Plan Document says or claims, many plans are subject to either a State or ERISA "Prompt Payment" rules. I advise that you see which ones govern your plan/plans and act accordingly.

Since there is most likely no real medical reason for the reversal and the reason usually is vanity or personal it should not be an eligible expense. If you can invent medical reasons such as a failed dead sperm test, anxiety disorder caused by fear of increased risk to testicular or prostate cancer, health threatening weight gain etc you might get a doctor to state that it is medically necessary. Other than that it is voluntary elective vanity surgery.

If the client is thinking of a Cafeteria Plan with an FSA to cover out of pocket expenses etc and/or dependent care, I would contact a local competent TPA and let them provide the education.

The basics of medical expense reimbursement plans is found in Treas. Regs 1.105-11.