GBurns

I would advise the ER to change TPAs. Too many issues, too much potential liability, to much chance of a problem. Here you have an insurer accepting payment for other than the named payor (probably inadvertently). This sets up a bad situation in case of litigation or conflict if there is a denial of coverage for some reason some day in the future. Then you have an agent invoicing for premium. I don't think this will fly with the dept of insurance. Then you have the issue of undisclosed or disguised invoicing. Then you have an insurance agent billing for what amounts to compensation for services related to the sale and servicing of insurance, with or without disclosure. I do not think that many states allow a "placement fee". I now see the relevance of Chao v Crouse now that you point it out. It is a further nail in the coffin of this situation, especially pertaining to the administrative fees. This situation is so rife with potential problems that I think that any ER who knowingly continues with it would be guilty of negligence, imprudence and a breach of fiduciary duties.

I wonder about your conclusions when you cite Chao v Crouse. I have not looked at the other cited case. I do not recall Chao v Crouse as having any facts or circumstances that have any similarity to your situation. There was no stop loss and apparently no claims adjudication or history of claims payment. In any case, I have a problem with the TPA invoicing for and receiving insurance premiums. I doubt that this was approved by the insurer and seems to raise state insurance law issues. Who is the named insured on the stop-loss policy? Who is the writing and servicing agent ? Who does the policy say is the premium payor? Now that I think about it, Are you sure that a stop-loss policy exists ?

Larry Sections 125 and 401(k) are both from TRA 1978. Also their Treas Regs are dated fairly close to each other. So both started at roughly the same time. As someone who started marketing them early 1985, the difference in success has to with the benefit promoted to the employer along with the drive to control the investment dollars. 401(k)s were a "new' pool of money, whereas section 125 just split the source of the same $ amount. 401(k) plans for many years were promoted as a wealth transfer strategy. Give the employees a little so that the HCEs (and owners) can get more of the company assets. After a while the "save the company the pension liability, let them save on their own" was an added mantra. Section 125 cafeteria plans were sold as a way to pass premium cost sharing to the employee. Since FSAs did not save the employer anything and took work time for adequate employee commuication and enrollment etc, they were discouraged.

Isn't this a common problem among well funded non-profits ? How is handled by others? I do not know anything about this issue except that I have seen and heard of it many times over the years. If I recall correctly it is caused by the midset of spending down before next budget and/or fundraising drive. Cry poor to raise more.

Larry I am surprised that a lawyer would think that warnings or attempted education would suffice. Consider the many product liability lawsits involving labeling/warnings and directions for use. Consider 401(k) fees lawsuits. Consider the Spitzer bid-rigging lawsuits. Remember hot coffee bought at the drive thru ? People in general no longer use any common sense. And unfortunately our juries are made up of those same people. So the consumer, no matter how stupid, quite often shares no responsibility for any of his/her actions. To me, the DoL is just mirroring the society in general.

LRDG In the thousands of plans whose enrollment and communication material that I have seen over the years, very very few, if any, have what you propose to any meaningful extent. As a result, very few have 50-60% participation. I also have not seen much of what you list available in the material from the providers of section 125 employer "packages" of suggested material. This means that for most employers not only does such material not be available, but since such is not even being suggested for use, most employers are not even aware of it. Hence, another reason why there are very few with 50-60% FSA participation. Here is a claim by a reasonable size TPA to "significantly above average" participation rates of 25-30%. http://www.benefitresource.com/Employers/f...ng-accounts.htm I hope that some of our FSA TPAs will chime in regarding what they are seeing and have heard.

Look at it from another perspective. The vast majority of employees are "low information" persons. They have no training or experience in selecting, monitoring or directing investments. Many are not able to do even basic research. Then there is the expectation that their employer used their superior resources to have researched, evaluated and negotiated the best possible choices for the menu. Add to this that the employer delegated such responsibility to staff with various titles, with the expectation of that being done but not realizing that the selected staff members were just like the regular employees, but who mainly relied on sales pitches from providers and provider reps. Add to this the questionable merits of relying on a sales rep who is trying to make a sale. Someone has to be responsible for causing the employee to be faced with the choices on the menu. Someone has to be responsible for misplaced reliance. Who? IMHO, the responsible party is the one with the ability to control the quality of the offerings. The employee is powerless, whereas the employer has the resources etc. The employer also is the one with the most to gain. That is my opinion as to why the DoL takes such a position. Just to help the helpless.

Don't you have to notify of a premium increase BEFORE it is due ? Also the employer knew of the increase before July 1 and so had ample time to send the notice even if the subsequent billing was wrong. I see the employer at fault even if the participants owe. In any case I wonder how much money is at stake to warrant an employer considering getting aggressive. I suspect that just a few refusing to pay and terminating coverage would cost this employer more than they are trying to collect.

ojs000 The forfietures do not revert or enure to the employer. They belong to the plan and plan participants. The employer is the plan sponsor, the employer is not the plan. I noted that you said that you "do not want to administer another plan", I hope that you are not now self-administering your FSA. In simple terms, the difference between a MERP and an HRA is that the HRA can allow rollover of unused money. Otherwise it is just an agreement to reimburse the employee for eligible medical expense up to a prescribed limit. The limit is usually the amount of new out of pocket risk (increase in deductible etc) that the employee faces. If the employee has no expense the employer has no cost. It operates just like an FSA but with no employee contribution.

Is there a VEBA or what else ? If there is a VEBA, Why ? There only 2 people and they are the owners of the company. What type of corporate entity ? ********* I just saw that vebaguru had given you a response on the other Forum. You probably got no further responses because there probably was nothing that anyone else wanted to add. It might not have been the answer you wanted, but that's the way the coookie crumbles sometimes.

Larry Giving benefit of the doubt is considerate. By the way, I think that you mis-typed in your 2nd sentence and might want to consider rephrasing. I doubt that is what you meant to say. My response to her post was really triggered by the fact that her post was in response to masteff's mention of enforcement and illegal entry which was in the context of the population issue. Her post included "Problem is local cops call ICE and ICE won't come get them." (take note of "them") and " Locals can't keep them locked up on immigration charges so they have to let him go." (again the use of "them" before getting to "him"). To me she clearly meant "piece of trash" not from the committing of a common crime.

HarborLights You might want to check and see if there are any small governmental agencies that have ever successfully enjoyed "stock market returns" on their portfolio, or have successfully invested in the stoock market or equities. In fact, I doubt that you can even find many large ones aside from the ultra supersized who have large investment management teams eg NYC, NYState, CALPERS etc

What is the concensus ? Viable or not viable ?

JanetM Is he a "piece of trash" because he is illegal or is it becuase he is from Guatemala ? It has to be one of those 2 because it is very easy to find hit and run drivers, hitand run drivers who cause multiple deaths, drivers who kill children, hit and run drivers who kill children, people who kill more than 1 person, people who shoot school children and college students, etc etc. The only difference between this case and many others is "illegal' and "Guatemala", race being unspecified.

What is wrong with Damon's calculation ? What is correct and why ? The link given to the SSA Periodic Life Table seems irrelevant since it does not take health status into consideration. Doesn't John McCain suffer from malignant melanoma ?

I think that ALL your 5 selections are the result of the same problem, the "Dumbing of America". I recall that there was a book with such a title published back in the 1960s that predicted all of this. We no longer act with intelligence or common sense. We no longer measure competence we instead have become what was called in 1980's Sociology textbooks "The Credentials Society". It no longer matters what you know or how well you know it, it nolonger matters of you can actually apply what is in a textbook, it only matters that you have the "piece of paper". In fact we no longer seem to be able to read or hear and understand, we instead rely on sound bites and buzz. So the top issue is How do we correct that which we do not understand ? Didn't someone say that we should first seek knowledge ?

Even if it is legal, I question whether it is worthwhile beyond the first year. At this point and with the limited info, it is hard to say. I think that consideration has to be given to things like number of participants at inception, add rate of new Drs, turnover rate of both Staff and non-shareholder Drs, take up/participaton of Staff after 1st plan year. With poor participation by disgruntled Staff and high turnover of Drs, I do not see a viable plan after 1 or 2 years. I wonder if the promoter of this plan design promoter has any plans that have been successful beyond 2 years ?

Why is a VEBA necessary ?

The weather has not been allowing enough rainbows, so they have been going after purses.

Much of what is offered seems to be concierge care and therefore not reimbuseable. If they were to breakout screenings etc there would be some reimburseable items. My information sources (a participating Dr and a patient) tell me that the annual fee is paid upon joining (up front) so you might want to re-check. From my information and from what I gleaned fron their website, it is just a souped up concierge service which serves to generate leads for the MCEs. I suggest that you do a Google search on "FSA eligible expenses". You should see that in the opinion of most, especially the larger TPAs and The Federal programs, that this would not be reimburseable. It is not an expense for medical care. It is not for the diagnosis, treatment, care etc of a medical condition. Bear in mind that they are "dressing up" their offering with the intention of making a sale. This tends to lead to a bias.

As per Post #5 Q 2): What service does the partnership provide to either and/or both of the S Corps ? Does the partnership provide services to any other entity ? What % ? What other relationship is there ? Although you do not like to answer questions or give details, proper answers are not possible on limited information. With the limted info that you like to give answers concerning controlled group, ASG etc etc are limited. Accuracy is also important. Elizabeth entering into a partnership is quite different to Elizabeth's S Corp entering into a partnership. Are you sure that both are S Corps ?

I suggest that you contact other tracks to see if this is being done any other track. Then copy whichevr one seems most fitting. However, before you start that maybe you should revise your wording. For example, If the jockeys are self-employed they cannot work for the track, they can work at the track.

Relying on cose family members for referrals with which to build a client base is different from making sales to those relatives. Friends are obviously a different issue. It is not the retirement plans that are different, it is that the laws governing the sales of securities and investment advice are different. They have nothing to do with retirement plans. There are even some insurers who place restrictions on sales to close family members. I have not been NASD licensed for some time, so I cannot tell you in which rule and on which disclosure form such restrictive wording appears, but it should be on the initial application for an account. Or as a knowledgeable liscensee and see what they tell you about selling or advising close relatives.

Although I think that it is prohibited, I am not sure. But, I recall this as a issue that was well discussed on one of these Forums. But even if it is not a PT from a plan perspective, I recall that there is an NASD rule and a state securities rule prohibiting this, so the brokerage firm would not allow it, assuming that they noticed it.

How will the IRS/DoL know that the exemption is maintained ? How would the IRS/DoL know that something was screwed up unless they audit the plan? I thought that the purpose of auditing was to see if everything was proper.