GBurns

Based on what you posted, this former employee is neither "ascertaining a clam" nor "enrolling in a health plan", So what is the relevance of your comment ? Are you sure that the insurance company requires an application from former employees ? All the documents that I recall only require applications from current employees. Is the former employee aware that if there is no employer health plan because the employer cannot get coverage because of the inability to provide the required information, then there would be no COBRA coverage? In any case the problem seems to be either a lack of understanding by the former employee or more likely a poor explanation regarding the requirement of the application or the waiver.

Yes, they do, but it is not a matter of "miniscule amount", it is a matter of accuracy in reporting and accounting. If you checkbook or trial balance etc was out by $12, wouldn't that be an issue to which you would make an effort to resolve ? If your bank account was overdrawn by $ 1, doesn't your bank make an issue of it and charge you for being overdrawn etc etc ? It is the principle not the amount.

What happens if the employee already has Family coverage? There would be no change in premium only an additional beneficiary. Who set the 30 day window ? It seems easier to change the window.

Try your particular facts and see how it comes out : www.changeofstatus.com

Years ago I saw 3 large employers try that with no success. The main problem was the reluctance of vendors to disclose in that manner their offerings. They all seemed to want one-on-one face to face meetings with the client's decision makers. Apparently they felt that they needed to do a "sales pitch". IMHO, they all have basically the same strategies to offer. So whoever offers first might get an edge. Then there is the basic problem of time limitation caused by such a format, even if you develop an agenda and have a list of objectives or areas to be addressed. You are limiting the nature and length of idea presentat ion. You are also giving valuable time away to some vendors who have nothing to offer. The format also makes you dependent on the limiited knowledge and the presentation skills etc of your local rep and the support that he/she might be able to raise, which will be limited by their influence with their company. I would, instead, produce a paper setting out my goals and objectives etc (an interrogatory) and submit it to each vendor for their response. This will first remove those who have nothing to offer and those unwilling to offer. Doing this will also give your rep the opportunity to shop around within his/her company for ideas etc. Having their responses in writing will allow you to compare and to short-list the ideas, in a mannner that should be better than alllowed by the summit format. Also do notlimit yyourself to your vendors. There are probably many other good vendors who have utilized these same strategies in unique ways that might be just what you are looking for. Big does not mean good much less best.

I get similar solicitations all the tiime from people like Thomson, CCH, EBIA etc In my experience over the years, I am of the opinion that a large number of cafeteria plans, whether small, mid-size or large companies, do not have a cafeteria plan document. So to many it is new. I have had more than one F500 executive (HR, VP Finance and CFOs etc) state that they do not have a Cafeteria Plan, they pre-tax the employee share through their employee benefits program or payroll etc. I have had IRS people at supervisory levels (regional) ask what does a health plan and health plan premiums have to do with the employee cafeteria. A few years ago, a Benefits attorney with a Top 50 law firm asked the same question. In 2009 the situation does not seem to have improved much, because in the last 2 months I have run into tax counsel at F500 companies who were not aware of the new Proposed Treas Regs nor the potential impact on theiir company's benefits plans of any of the recent legislation, ARRA etc. So this marketer could be just playing the odds and assuming that it will be new etc to a large % of the recipents especially the smaller companies with no in-house legal dept etc.

They can use programs which have been carefully planned and properly evaluated instead of buying either hype or buying because of name and references.

I have no idea, but if I were you, I would find some companies (including many that are not health clubs) whose marketing looks successful and then use who they use.

It is quite possible that the majority of employees do not have access to a telephone for the purpose of making personal telephone calls during working hours. Think service employees, factory workers, health care workers, school employees etc.

Why those companies were usually advised to have separate plans was something I never bothered to question so I do not know the facts etc nor the rationale. Also since that was a few years ago, it could be that changes in law have made that advice moot. I do not know, I can only report what happpened. It might be good to do a Google search on something like "separate plan Davis Bacon" and see what comes up. A search of BenefitsLink should bring up some past discussions of this issue. By the way, we do not know the "quality" of the documents of the plan used by the OP. And I do wonder what % of documents would qualify, under whatever standard, as being "good" ?

Since the vesting and eligibility is different for the DBRA employees, I usually see companies advised to have a separate plan rather than do as you propose.

I do not know the answer but would not be so definite without researching the issue. Reimbursement is allowed for travelling expenses for getting medical care, is it not ? Are those medical expenses? The rental of medical equipment such as wheelchairs, respiratory equipment etc is a reimburseable expense. The rental charge includes an amount (disclosed or not) to cover the costs of repair, servicing, delivery and depreciation etc, none of which are technically medical expenses. The rental would have been reimbursed without question or itemizing. The insurance for the hearing aid is so as to provide for the repair, servicing and possible replacement. Is there really a difference ? Would inclusion of the insurance premium in the selling price of the hearing aid have made the question moot ? However, I do recall a prohibition in the Proposed Treas Regs against other insurance premiums. But, is that only against other health plan insurance or does it mean any insurance of any sort ?

From the HSA FAQ available at : http://www.ustreas.gov/offices/public-affa...tributing.shtml Does my contribution depend on when I establish my HSA account or when my HDHP coverage begins? Your eligibility to contribute to an HSA is determined by the effective date of your HDHP coverage. Your annual contribution depends your HDHP coverage. If you are not covered on December 1, your contribution depends on the number of months of HDHP coverage you have during the year (technically, the months where you have HDHP coverage on the first day of the month). For 2007 and forward, if you are covered on December 1, you are treated as an eligible individual for the entire year. However – if you cease to be an eligible individual during the following year, the excess over the pro rated contribution is included in income and subject to a 10 percent additional tax. The amount you can contribute is not determined by the date you establish your account. However, medical expenses incurred before the date your HSA is established cannot be reimbursed from the account. **************** So I would say that the $4,000 has to be pro-rated for the few months in which he had the eligible HDHP and the excess taxed, assuming that he did have an HDHP.

You wrote that "it has a separate section in the plan..". In what plan does it have a separate section ? Or, are you confusing the plan with the handbook ? As an aside, don't you have separate written plan documents for each item in your employee benefits program? So why would it seem strange to also have one for this particular benefit ?

I thought that a "plain SEP" was one that used the IRS model.

I have not been involved in any recent PW or DBRA plans, so I am doing this from memory. But first, I suggest that you seek experienced legal advice about this and other issues peculiar to these plans.. DBRA and most, if not all, PW plans should not include employees who are not engaged in the job. Contribution levels, contribution sources, vesting etc are usually different from non-DBRA/PW. The required audited payrolls should not include employees who are not engaged in the contracted job. Audiited payrolls are a usual requirement and will not "balance". Edit: I think I should have said "certified" rather than "audited".

It might be helpful to both you and the client, if you asked the client to identify the specific rules of concern. Then you would be able to better understand or correct.

QDROphile It was certainly thoughtful consideration of the issue by you to suggest " Pay the $38 of benefits .... ". The $38 (or whatever) was never deducted, so it cannot be refunded. The $38 (or whatever) is not part of the claims submitted for reimbursement. You totally disregard the submitted claims (assuming timeliness as raised by Bill). You also disregard the missed employee contributions. So I wonder what was your thoughfully considered rationale that is above and beyond any criticism or comment.

If you are going to even consider that suggestion, I suggest that you have a good lawyer ready for the employee's subsequent actons. Failure to honor the employee's salary reduction agreement should be a plan failure. That the employee did not notify of the error, is a separate issue. PR also did not notify either the ER, the EE nor the Plan Administrator. Allocate blame proportionately if you want to see who was "more" negligent. There is no paycheck from which to now make the deduction and the only remaining source is the reimbursement check. The Uniform Coverage provision states that the full amount up to the annual election must be available. It is not clear from the OP how much that is. I doubt that it really was $38 for the year but rather per paycheck. It could be possible to deduct the net after tax equivalent of the missed salary reductions from the amount payable out of the amount submitted as claims. **************** Edit: My response is directed at QDROphile's suggestion.

Rev. Proc 2008-50 seems to deal with a "Brief Exclusion from Elective Deferrals ... " where as the scenario in the OP seems to be a " An employer’s failure to execute an employee’s election .." similar to Situation 2 in the IRS link given by JanetM, and which does not seem to fit a "Brief Exclusion".

My Post #14 says "Using your scenario" in response to K2retire.

Using your scenario, the auditor is saying that you cannot use a January 25, 2007 deferral election on that January 31, 2007 payment, you have to use something earlier.

Sieve And Yes, I do know about contest prizes, sweepstakes, raffles etc

J4FKBC Getting paid if quitting is as important as getting paid by demanding. *************** K2retire Therein lies 1 of the big problems. Surely payments are not all made all at the end of the year, some might even be early. So under a commission due on payment scheme, some commission would be earned before year end even if not paid out to the employee as yet. Another problem is the recognition of defaults. Recognition of income would come before default, long before. So are the company's books not closed periodically ? What happens if subsequently collected by litigatiion or otherwise ? I hope there will be clarification.

The benefit is not being provided by or through the employer. There is no vendor relationshiip between the employer and the health club. The benefit is not for the performance of services. Free health club membership is not exclusive to only these employees and is made available to others as the OP can attest. Its a standard practice of large health clubs. They, along with many other vendors, have always targeted employee groups, usually larger groups. But churches are targeted although small, so as to gain entry to the larger local congregation.