GBurns

Where did you find this 30 day limit. I have looked but must have missed it? Why is this not allowed under Final Reg. 1.125-4 ? It seems to be exactly as Example 2 illustrates as a permitted election change.

First, are you sure that the FSA is with "the insurance company" and not with the FSA Plan Administrator or Cafeteria Plan TPA? Second, What does joining one insurance company or another have to do with your FSA account? Third, Is it the money that was transferred or was it the account administration? I think that you need to talk to your Benefits Dept to get an understanding of what you really are into, then talk to the Plan Administrator.

I keep hearing of people who have done "research" yet no one can say what they researched. Did they research the sales brochure or did they get explanatory material with technical details and legal support or basis information? What did the authors say that they believe? The basis for the plans (legal or illegal) has never been 106 but has always included many other areas.

Since neither the DOL or the IRS recognizes a "co-employer" especially a PEO, I would seek experienced knowledgeable legal advice. You might also want to first get some basic knowledge of the problems that every employer who uses a PEO faces by visiting the Q&A columns especially "Who's the employer" and "Advanced Plan Design" also see if there is a COBRA Q&A.

The marketing of these products is getting interesting. Did they show you any proof of these alleged endorsements? If they did I would be very surprised, so would AE, PWC and the others. If they did not, did you suggest to your clients that they should reconsider doing business with that sort of person? Almost all of the programs out there are just as you described and are similar to what Mr. Beker spoke about. they are illegal not only because of the "double dipping" but also because of defective SPD, Plan Document etc, and when sold to many small employers in most states violate either State law or the insurance contract when a mandatory employer contribution is required. I have seen cases where the insurer either cancelled coverage or refused to pay claims because of the contract violation. If the employee assumes to pay 100% of the premium there is no employer contribution. Almost every one of these that have been cloned requires that the client user send in payroll information that is "recharacterized" by the Plan Administrator and payroll entries are provided. A straight payroll adjustment.This procedure wal outlawed by IRS Notice 84-22 and Announcement 84-44. They were originally referred to as "Zero Balance Plans". If you are just massaging the payroll it is illegal. If there is some other mechanism or procedure that provides the "make up" amount such as actual medical expenses, then you have a different legal position, that has its own problems. There are legal plans out there that look similar in the illustration. This what these guys are cloning.

First, we do not know if the plan that S Luskin is referring to is the same plan as before. If we assume that it is and also assume that the salesperson did say that the plan was reimbursing the pre-tax deduction and is not the interpretation of S Luskin from reading the brochure. Then it would be "double dipping" which is not allowed in this case. However, to be accurate you should be aware that according to the transcript: What Mr. Beker said was that the plan that was being described to him by Mr. Hickman was not allowed. Mr. Beker never said that any other plan would not work.Mr. Beker has verified what he sais and what he was referring to numerous times. He said that he was only answering the questions asked of him there at that time and not commenting on anything else or any other plan. Although he has stated this many times, I guess he would still take telephone calls to explain what he said and what he was referring to.

What is the Group Health Insurance Standards Provisions Model Act 27 ? What is its relevance to the Internal Revenue Code ? Section 125 benefits are for employees. (Period) The fact that an employee ALSO serves as a Director is irrelevant. The benefit is provided to the employee NOT to the Director. There is no relationship between the two only coincidence. You should separate the two different hats that any of those individuals wear.

IRS has said no to this re-charaterization of income many times. The first was probably Notice 84-22 and Announcement 84-24. There have also been some PLRs denying this. Unfortunately, there are a few of these products that are being promoted.

Are you sure that it was GALIC that refused the transfer or was it the agent? What were the reasons given for refusing the transfer? Almost every one of the dozens of claims that there was a refusal to transfer that I see are either mis-statements by the agent (usually fearing loss of commission) or a mis-understanding of advice given against the transfer. Very rarely is it ever a refusal by the Company.

What would you say if this same employee was scheduled for surgery and his surgeon estimated that he would need 4 pints of blood for use in transfusion. The employee, however, has a blood problem or rejection problem of some sort, so it is decided that the employee would pre-donate his own blood and have it processed and stored for future use. Personally, I dont see any difference, unless the employee wanted to store the embryo for "cosmetic" reasons and not medical reasons. If the embryo storage is in any way related to a fertility problem, it most likely would be deemed a medical problem. If your plan does not explicitly exclude fertility (infertility) I strongly suggest that you get experienced legal advice with supporting case law before you decline this case.

Can anyone point me to a site or source that shows what States have opted out of Social Security other than Illinois and Texas?

To geekster in particular and everyone else in general. Where can I find information on the States that have opted out of Social Security?

I am starting to see a lot of Heart & Stroke and Critical Illness policies being offered, both in and out of Sec 125 Cafeteria Plans. Has anyone heard of the reasons why the benefits are not taxable income? In particular the benefits that are not related to any expenses, such as the Dianosis Benefit and Home recovery Benefit etc.

Joe, Can you give any cites for the cancer benefits being taxable income, if premiums were paid on a pre-tax basis?

What is the purpose of the 125?

Aside from the US Embassy, there are a number of Consular offices. All usually have a notary or will use an approved local Justice of the Peace. Also the Big 5 accounting firms and some of the big brokerage houses have offices in many of the Italian cities. There are also US banks with international offices. Credit Suisse will also provide the service.

I have never been allowed to post a response similar to what Mike and Gregg just posted. The Administrator usually deletes my comments even my apologies.It is nice to see such cool responses.I also apologize for being a little harsh.I guess I can blame it on being in S.Florida, you all know what we are like.

There are still quite a few carriers available, but it depends on what State the members are in etc. etc You did not define "health" benefits. What do you need? What type of association? What function will the association serve?

You still seem to miss the main point that quite a few people have been trying to get across. There is no ERISA requirement for the insured product because it is State regulated. There is an ERISA requirement for your PLAN. Two different things that you dont seem to grasp. Your medical insurance is a benefit it is not the Plan. ERISA covers Plans not benefit products.

Mike, Dont be so defensive you "blah, blah, blahed" first and you were only being corrected or challenged on overly broad statements that you made. We all mis-speak at some time and as long as we do it in public some is going to point it out.The personal attack regarding his clients could make me wonder the same thing about your clients. As you said we are here to give our best advice, and we should do this to the best of our ability and as accurately as we can. Reasonable people will at times disagree.

To add to Kip's question.. What is pre-taxed and is it done through a 125 Cafeteria plan? In looking at the literature it uses the phrase "employer and employee pre-tax contribution" but does not explain. Have they explained it to you, especially the "employer" portion?

I thought that Nader12 had adequately covered the issue in two responses, but let me give my thoughts... I think that you have confused your Employee welfare Benefit Plan with your medical coverage and as a result confused the Q&A answers which were both correct but not related to each other. Your EWP is the arrangement (written or otherwise) that the employer makes agreeing to provide a benefit or set of benefits. These can be provided on an insured or an uninsured basis. in otherwords be self-funded or be insured or a combination. If insured then the employer buys an insurance policy. Your EWP is the Plan.......Your medical coverage is the benefit and which is provided through an insurance contract. Your EWP is under ERISA which requires an SPD. Your medical coverage is through a State regulated insurance product which requires a certificate of coverage etc. These are 2 separate issues.As pointed out by jeanine the SPD is not necessary for the insurance policy but is necessary for your EWP. I agree with KJohnson, I have found very very few insurance agents or companies that know about SPDs. Regarding your last issue about claims turnaround time, Are you the Claims Administrator? I thought that you said that this was a fully insured product. If not, what is their position? I cant see why this is your problem.

The "Personal Care Account" is not the product itself, it is a component of the package. It is also the name of only one of such concepts being marketed under various names by other groups. None of them fall under Sections 125 or 213, they all fall under Sections 105, 106 etc.

I disagree with advice to use a fee-based advisor. It implies that the fee provides competence, which it does not. There are numerous cases of incompetent fee-bsed advice. Getting the services of an expert who is competent and consciencious is the important factor. Please make a differentiation between a "captive" agent who has few sources and a true "broker" who can shop nationally etc.

1. The original post stated "normal" membership. Normal memberships are discretionary. 2. Pub 503 states "to alleviate or prevent". 3. IRC and Treas Regs 105 etc allow for cure and treatment. Item 1 is not allowable since it is "merely beneficial" as per Pub 503 etc. Expenses under 2 & 3 are allowable but I suggest that you get a prescription thereby certifying the "physical or mental defect or illness" needing the "cure, mitigation, treatment" etc.