GBurns

J Simmons You asked about HIPAA in May, 2000 ? I am surprised that he even attempted an answer considering when the Regulations were finalized and that this was while the comments made to the NPRM were probably still being reviewed. As I recall, at that time everyone was still studying it and opinions were as numerous as opiners.

Don Premium issues start with the aplication for coverage where Payor Information and Relationship is established. These have to be acceptable by the insurance company and if so, is then made a part of the contract. Look at any contract. Also established is Premium Amount, Frequency, Due Date etc etc. Here is a standard BBSTX individual application. It is a matter of contract and that insurance contract and underwriting etc is as approved by the state dept of insurance. ERISA does not pre-empt state insurance laws. The insurance contract is not the benefit/welfare plan. More so since we are talking about an individual policy bought outside the confines of employer. As for state law see your state Small Employer health insurance regulations. You might want to start with TAC Rule 26.13(k). I do not know where to find the List Billing prohibition that relates but the Texas DOI did issue a Bulletin on the subject in the last few years. You might want to spend an hour listening to the 2006 TIC conference on individual policies in the employer market and the issues involved. The IRS excerpt should need no explanation since in most cases state regulation of insurance policies is the norm.

pre-taxing = salary reduction = deducting on the payroll from the employee's wages without applying FICA and FWT. The same as is done for health insurance premiums in a POP section 125 cafeteria plan. The amount taken on the payroll was not subject to taxes. If you read 61-146 you will see that the employee self paid on his own (by check, cash or otherwise) not through a payroll deduction, then got reimbursed by the employer. The reimbursement by the employer is not taxable income. Mr. Beker probably did not quite understand what you were asking since the acceptance of premium whether from an employer or employee is neither a cafeteria plan issue nor even an IRS issue but is governed by the insurance contract and state law in some cases.

The first concern was illustrated in a recent thread where a popular posted made it clear that he was not aware that there were even new Proposed Treas Regs. The second concern is regarding whether the new Prop. Treas Regs will be either changed or ever become final. Other than those I have seen questions regarding whether 1.125-1(m) allows pre-taxing of the premium and whether it can be done through an FSA or should be a direct reimbursement as per the literal reading (and as per 61-146). In any case, the OP is not seeking a 61-146 type reimbursement, but rather a pre-taxing by the employee of the premium.

Matthew Just as you sought help here, and I hope that we were helpful, others also are seeking help. It is only fair that you share what you can so as to help others.

I find this a rather amusing and convenient definition. What is so special about life insurance premiums that makes it exempt but golf club fees not ? Life insurance is not the 162 bonus arrangement it is just the line item to which the 162 bonus is being applied.

aswolff I advise that you put pen to paper and plug in some figures so that you can compare alternatives. 40% premium reduction versus what coverage ? A reduction in premium is not the same as a reduction in costs ? Did you factor in the HSA contribution ? It is possible to greatly reduce premiums by placing internal caps or limits on various illnesses and treatment. Maximum out-of pocket could be quickly exceeded by 1 major illness but if the internal limit for that illness is then met you have no further coverage for that particular illness. Premium is sometimes not as important as policy maximums and specific limits.

lovemymgb There is no "reimbursement" in the same way that there is no "reimbursement" of the premium amount that is pre-taxed for the group medical insurance. It is just another pre-tax salary reduction but payable to a different insurance carrier. Look at any illustration for a POP cafeteria plan, or look at most Aflac brochures that show a cafeteria plan. The premium payment is directly from payroll to insurance company so no "reimbursement" is done. No different from group premiums. If you use the procedure in Rev Rul 61-146 (which was looong before cafeteria plans were conceived) the employee paid the premium privately so therefore "reimbursement" is necessary. There is no pre-taxing anything on the payroll nor an FSA nor anything else in 61-146. However, the new Proposed Treas Regs allows pre-taxing of individual premiums, but there seems to be some concerns as to exactly what is meant and how it works.

I still cannot see this as a 401(k) or QDRO issue. I do not see it as a plan issue, I see it as a simple breach of the agreement. The agreement is not asking that the Trustee do anything. All it says is that one person pay the other 50% of the value of what is in the 401(k). The OP says that she was awarded the value, she did not say that she was awarded the 401(k) or assigned access to the 401(k).

Frankly, I see no problem and nothing new about an employee pre-taxing the premium through the cafeteria plan for an individual policy. Premiums for supplemental policies for all sorts of coverages from providers such as Unum, Aflac, Colonial, Allstate/American Heritage etc etc has been acceptable for years. It is part of many POP cafeteria plans. The only caveat in some cases was the issue of taxation of benefits, which would not be applicable in this case because of the exclusion of medical expense benefits. Don, You are correct, premium reimbursement is not an issue here. But the issue raised regarding HIPAA etc applies not to the cafeteria plan, but to the plan/arrangement related to the coverage.

katieinny Why does 414(e) apply to a seminary ? Or exactly where in 414(e) ? Aren't seminaries church related rather than church controlled ?

Don Aren't you confusing HIPAA with ERISA ? ERISA, COBRA and applicable state law are issues that should also be part of the consideration ? Not knowing the group size, I would also point out that reimbursing the premium would cause the application of State Small Group health insurance laws which would create another set of issues, in many states.

If there was such a blanket prohibition by ERISA, I doubt that there would be so many thousands of Entity Purchase etc Buy/Sell arrangements which are funded by life insurance. I suggest that you get that attorney/lawyer to be more specific. I also suggest that you find out the factual written reason for the purchases. This should lead you to the agreements that will tell you what was intented etc. Have you found the Buy/Sell ? Have you had any input from the insurance agents and advisors who structured the arrangement ? What do the policy applications say ? It could very well be that the beneficiary designations were intended that way so that the share purchases would end up in a pre-determined manner, which everyone haas forgotten about. That is why the documentation outside the policy is important. By the way, I am wondering How you know the various designated beneficiaries yet still have this sort of question? In the past whenever I saw this it always turned out to be incorrect.

Check with the state Dept of Insurance regarding the state's rules for eligibility, certificate of prior coverage etc. Also try to get the BC reps statements in writing of some sort. How did she know that her application was declined? I also do not understand why she is arguing with a telephone rep rather than the writing agent.

LRDG I do not see where anyone mentioned FSAs. Proposed Treas Regs 1.125-1(m) cited by J Simmons is certainly a change from what was in the old Regs. What do you think they are allowing to be now reimbursed?

A claims administrator might or might not have an arrangement with Independence BC. They usually have discount arrangements with PPOs, which Independence might or might not offer to them, assuming that Independence does have its own network rather than "leasing" an existing network. Most, if not all, the large insurance carriers offer ASO contracts which is another reasonn why there might be no arrangement with TPAs for self-funded groups. So you have a choice of any large insurance carrier, Great-West, many benefits consulting firms and most cafeteria plan administrators. Geographic location is usually irrelevant. Since few are listed with BenefitsLink as service providers, it would be unethical to give you names. IMHO, you probably got no responses because no one thought that you were serious. They probably don't see many people who put the cart before the horse, if your OP is any indication of how you might have worded that email.

You apparently misunderstand my post or do not understand what I am saying. You should not be at the stage of having already found stop-loss carriers BEFORE finding TPAs and completing other steps. In other words you should not be asking your question at this stage.

In my experience, a short list of TPAs is one of the first things done in order to evaluate the merits of self-insuring a Plan. How did you decide on the merits without knowing the costs and processes involved ?

I do not know the answer, but wonder Why does it matter anyhow ? Is there something that you think that you can do about the amount distributed in 2006 ? Do you thnik that you can go back and correct the failure to distribute as warned in the letter ?

Not usually and could depend on how far apart the cities are. I had a client with car dealerships in multiple cities in South Florida. Some cities border each other and the distance between dealerships in different cities is less than 5 miles in most cases. I had a client in Ohio where the dealerships were on the same road but in 3 different cities.

Jacmo The restriction that you and LRDG refer to are under the old Proposed Treas Regs but not under the new Proposed Treas Regs cited by J Simmons.

But, How does the payroll system AND the Plan know when the limit is reached during the year ?

See Post#5. The OP has corrected, it is an MP Plan not a 403(b).

In the PLR the subsidiary company is not a US company in anyway. It is a foreign corporation incorporated in a foreign country operating in that foreign company using US citizens as employees. Whereas in the OP, it is a US incorporated company operating in a foreign company using Non-US citizens. That seems like quite a distinguishing factor.

That would be true if he was seeking answers but according to his OP he is seeking to find the source of the employer's quote. How will he ever be sure that he has found it ? It leaves him open to finding the wrong source, which would make his response , to the employer, questioned. I can just imagine the employer saying, "That is not what I was talking about. I thought you knew about these things.".