GBurns

Steve. Make up a hypothetical list with the type of employees you are hoping to attract add some that you might have to take if you cant get who you really want. Use this data to make up the census and have agents quote. They dont have to know that you dont have the employees as yet. You should also get a CHPA spreadsheet which would allow you to do some of the pricing yourself.

Insurance premiums are payable in advance. This is mid November, which means that the last premium was paid in early Nov for the month of Nov, if you leave before Dec how else would Dec premium be paid? It seems that the employer has no other alternative. As to legality, as far as I have ever seen it is not only legal, it is the only logical thing to do. By the way, every time I have seen or heard of someone giving notice, they were asked to leave immediately. Before they surprise you with this action, check out their usual behaviour, in the past, when they are given notice. Good luck.

It is not the prescription that must be eligible, it is the item. More importantly, it must be the reason for the item and what it does. See the Treasury Regs. 1.213.There is also an IRS Publication on Medical Expenses. You should also look through the Cafeteria Q&A on this site.

To MLS: 20,000 employees is not much. I have many clients who have more than that and I still dont think that they are big. If you ask COBRA Services thay will give you the names of their larger clients. [This message has been edited by Brigid Anderson (edited 11-23-1999).]

Thanks Dave, this is very helpful. I had been thinking of doing this for some agents but yours looks better.

The NASD and SEC requires a prospectus to the investor/participant and the party signing the application or participation agreement. The prospectus is part of the SPD as per DOL and some state Dept of Banking & Securities. Florida, Texas, and NJ are states that reuire a prospectus, so I guess there must be many others. If I couldnt get a prospectus I would call in the State, DOL, NASD etc.

IF you have any retirees, it is very easy to get one of the more agressive Medicare HMOs to coordinate this free of charge for you. In Florida that is what is done very often. They have the whole system set up already. If you dont have any retirees you should still be able to use them but you will have to do more work, but they can give you the contact with the nearby publicly funded regional hospital which will have the blood bany, cholesterol etc. A local chiropractor is usually also helpful. But, in any case make your benefits reps do some work for a change. If I knew more I could give you a helpful rep in your area.

This topic was well covered on this Message Board back in 5-05-99 under the question "Company contribution to self-funded health plan". The last 2 answers are probably the best you will find anywhere, since you have a problem with the instructions on the form. There are also very good explanatory brochures from DOL PWBA on the subject.

What does the consulting firm do? Or did you mean that you outsource to a telemarketing firm that provides inbound answering and processing services?

I disagree with much of the article. I think it is a case of the right answers but the wrong questions. In fact we dont really know what questions were asked by the writer. From my perspective as a Registered Rep and a licensed ins agent, most 401k plans that I see are participant directed. A lot are also not SEC registered. The non SEC products fall under State DOI or Finance & Securities jurisdiction, which in most states, dictate that a prospectus must be given with solicitation of the participant, since there is ongoing solicitation to keep the person active in contributions and account selection, a prospectus is required at any time of request. This request is to be made to the Rep or directly to subscriber services of the investment company. I have never seen an employer who even knew how to get one. The article mentioned that the employer was seen as the contributor. That is incorrect. The amount of the salary reduction is "treated as employer contribution" but the law then state "for the purposes of" and that it shall "be used to purchase the benefit selected" and contributed by the employer "on behalf of the participant". The person who signs investment selection form etc. is the employee and any changes can only be made by that employee. The beneficiary designation etc etc is done by the employee. It is the employee who has the control. We should not allow untrained journalists to be giving out info in complex matter such as these. I wish there was more space and time to really cover the matter properly.

I am suspecting that BB has misread the document. In your original item 1, you stated that the document required contributions even to those "NOT terminated". Why would there be any concern that those "NOT terminated" would be getting a contribution? Isn't that the purpose of the plan? Also, it does not matter whether a person employed on the last day has hours or not, what matters is who is entitled as per the document, standardized or not. If the document required red shoes on the last day, that is the requirement. Regarding item 2, I have very rarely seen any document that states a procedure to be used to pass any test or correct any failure. Instead they make provision to use whatever is allowed by the Regs etc, when the situation occurs, and of course they should use whatever is most beneficial to the employer. What else would you use?

I have tried and I hace had others try and we can't see the discrepancy.

How did you get the employee's contributions?You said that there was no 125 Cafeteria Plan in place. Were the employee contributions on a pre-tax basis and if so how come? I have been searching for a method of doing this.

It is irrelevant if the withheld amount was or had been deposited in an IRS depository. There are adjustment and correction procedures for such matters. Also, regarding the employer giving a "second chance". It is not the employe's choice. It is the employee's right as allowed by law.

The initial post asked for ideas and comments on other benefits that might be available. You and the other person tried to SELL your product. Neother of you gave a referral or advice etc, as is normally done, instead you both tried to make a SALE.

Try HIPAA Q&A 26. You stated that these were new hires. Why are you trying to assume the responsibility of the old employer?. Q&A is an accurate quoting of the applicable HIPAA requirement.

Kirk. The PLRs are public record but the method of using them is not.This includes the Plan design, implementation techniques, accounting etc etc. The Prime VEBA case is a case in point, they complied with the Code in plan design but failed in accounting and actuarial areas and so the IRS killed them.Also look at 401(k) plans, all the major players have a proprietary plan which are all copyrighted etc.

Why not have the Lawyer speak to the Accountant ?? In any case how did an attorney or lawyer get into this issue? [This message has been edited by GBurns (edited 10-22-1999).]

HIPAA certificates are automatic under Sec 9801 upon the termination of coverage. It therefore is a requirement of the former employer, and has no bearing on a new employer. There is a good HIPAA Q&A in the Q&A section of this Web site.

The risks that come to mind first are: 1.The arrangement must be made before any expenses are incurred. 2. Coverage cannot be purchased on an expense by expense basis 3. The full amount of reimbursement must be available regardless of the amount contributed. If the employer had only put in 1 month's worth, the employee can spend the whole years amount anytime. 4. The employer cannot deduct anything from the employee. If the employee in Item 3 then left the job the employer would have to stand the loss, that is an insurance risk.Treas Regs 1.105-11 reads almost the same as 1.125-1 Q&A 17.

As I once told you before, the information is being treated as proprietary until the receival of patent and copyright and currently the companies involved require a signed confidentiality agreement which you have refused to sign. Ask Paychex if they will share their info with you, freely.If not, do what many others do, search or buy the research software from CCH, BNA etc.

What is a PTO type question.Also I dont see where the Pre-paid legal item was on topic.

Linda. Almost everthing that is done under a 125 Cafeteria Plan is done under either Proposed Regs or Temporary Proposed Regs. How can you then question how much weight can be placed on the Regs. that is all everyone has been operating under, especially with the refusal to issue Determination Letters or Private Letter Rulings since 1989. Look for the first Final Regs on 125 in early Nov, these will mainly be 1.125-4T but there will be some important othe line items from the other Prop. Regs.

While it is allowed to have a two tiered plan, it must meet the nondiscrimination rules of Regs 1.105. The other problems that I see are (1) the timing of the employees election (2)the eligibility of any "dependents" (3)the establishment of a formal plan, which for 105 does not have to be written but for ERISA must be.

Benefish. I apologize, but I was not calling your question dumb, I was referring to the individual from Paychex who asked Mr Beker at the Symposium to pass judgement on a bad brochure. However, it does seem like a lot of people out there are passing judgement on a sales brochure.I know that I would never buy a car from a brochure or spec sheet and I certainly would not buy Mr106 from a brochure. There is much literature including relevant PLRs etc available on a similar plan. I also know a number of Fortune 1000 Companies that have such plans.