GBurns

There is nothing in 105 that says it has to be a group health plan.But, the plan has to show elements of insurance, such as the shifting of risk, so you might have other problems caused by the accumulation of any money that could be used for other purposes. Also, the availability, even eventually of the money, could violate the constructive receipt rules and the old assignment of income doctrine.Therefore, the money must never become the employees.

Benefish. Have you spoken to you old friend at the IRS re the MR106 Plan? I am curious as to what you could have asked him based on limited knowledge of the plan, since they have not been providing in depth info without a confidentiality agreement.A similar situation is reported by EBIA in their Cafeteria Plan Newsletter. The IRS person mentioned there was Mr. Beker who has since said he only answered based on what was read to him from a Paychex brochure on their version of the same plan and not on what the plan really might be. Ask a dumb question and you will get a dumb answer, Ask a proper question and you should get a much more valid answer.

Benefish. What section of the Regs makes such a choice affect ALL or OTHER employees? What about "formal" arrangements as opposed to "informal" ?

What do you mean by the "benefit of coordination of benefits"??

Try an Hour Bank Medical Plan. These use a base hours worked per week to pay for the next periods insurance and the "excess" hours are "banked" to accumulate for periods of layoffs or work stoppage. I dont know what state you are in so I cant give you an agent referral.

Kip, isnt it dangerous for someone to wait until there is a problem before you advise them to fix it. How do you fix if you fail testing, you would still have failed and would be liable for the penalties.

We now have TWO (2) direct solicitations? Moderator ???

If the employer violates the State or COBRA then the Plan would lose its status and loose the tax benefits etc and in certain cases be subject to State and Federal Labor law violations and EEOC action etc etc. Check out the penalties from DOL and IRS and you will se how foolish it would be to think that there would be no liability.

In most states including Californis, the State regulates not only the insurers and agents, but also the insurance products and the marketing of them. While the dont regulate benefits plans per se, it would be nearly impossible to provide the coverage that the benefits plan would require without complying with the State laws. Kirk,How do you propose or have done it ??