GBurns

Something is wrong here. This is not what mbozek would post. Yes, at times he will lose his cool and be aggressive or curt, but never in this manner. So I have to give him the benefit of the doubt, that he was not calling a poster names. It might have been a yet to be corrected typo, so let's wait and see what response or explanation is given.

It is now currently underwritten by Jefferson Pilot. In the past there have been Monumental Life, Guarantee Life and others. Why the insurance companies and the writers of the various opinion letters get changed every now and then is a question that should be answered.

I do not remember ever seeing anything of authority on this issue except for general IRS employee comments about administrative or other errors. As a result I would look at this in the same way that I would look at an employee who made a choice at Open Enrollment in say November for effective date January 1 and who then changes his/her mind in late December before any payroll deductions are made or cards etc issued. I would advocate allowing an employee to change their election since neither coverage nor the salary reduction have yet become effective. So the change really is not governed by any rules as yet, just administrative procedures and precedent.

I have not seen any that did not have that same financing structure nor have I seen any without an opinion letter that had a caveat (or sidestepped) regarding the qualifying as insurance issue.

Can you give some examples of these recent cases so that we can see if there is any similarity to the Exec-U-Care type arrangement? In general, since the benefit is the reimbursement of eligible medical expenses, for the benefit to be not taxable it has to be a benefit paid under an accident and health plan whether insured or self insured. Since it is discrminatory (for certain executive) it should have to be fully insured. The question is whether this arrangement constitutes insurance. This is an issue that none of the opinion letters used, have been willing to address. Look at the "premium" arrangement and you will see why many would question the ability to qualify as insurance absent a risk factor etc. The fact that an insurance company is involved does not make it, and has nothing to do with a product or arrangement being, insurance.

Over the years they have used an opinion letter from a Big 4. However, the opining Big 4 keeps changing for reasons not disclosed. All the opinions read roughly the same with the same caveats basically saying they think that the plan is... but if... then.... and mainly that it depends on whether the plan qualifies as insurance but they are not saying that it does etc.

Just because the promoter of a plan claims that the plan has certain tax benefits does not make it so. Have you read the current opinion letter? Wondered why the old opinion letters were withdrawn or replaced? But most of all, read the disclaimers and caveats in the opinion letter. For there to be the purported tax benefits, the plan has to be an insured plan, doesn't it? Does it qualify? Because something comes from an insurance company does not make it insured? What does the opinion letter say about it qualifying as insurance? Re your Question: If the employer pays the benefit, wouldn't this be a self insured plan? If self insured and covers only the executives, Why would you need Exec-u-Care? If self insured and covering only the executives why would 105(h) not apply?

The issue is deferral by a partner in an LLC who has no W-2 income. See the OP and Chris's subsequent post etc. The issue is not about contribution it is about deferral.

As per the OP, the item is a deferral. How can you have a deferral if there is no W-2 income from which to make the deferral? If the person, partner or otherwise has no income from which to make a deferral, How can a deferral be made? If a deferral cannot be made, How can the person be a participant making deferrals? If the person has no W-2 income and is not an employee, How can they participate in the Plan? I might seem that I went in circles, covering the same issue, but it seems that you have some way of looking at this that I and others are not seeing. See mbozek's last post.

As long as it does not state the treatment or diagnosis etc it would have no health or PHI, would it?

Bird It seems that you are saying that all that a partner in an LLC has to do to make a participant deferral to the LLC's 401(k) is just to draw a check and have it deposited to his 401(k) participant account. Is that what you are saying?

How do he defer if he has no wages or W-2 compensation?

Is there a reason why the insurance company is not adequate?

Isn't the issue of "inurement" that QDRO initially brought up important? It would seem that if this HCE does what is proposed, it would be an action that has significant personal benefit and no benefit or business purpose to the Organization, in addition to not having as great a relative benefit to the other employees, even if age can be used as a reason to increase the HCE share of the benefits.

If the LLC filed to be taxed as a partnership, Wouldn't this person be an ilegible participant? If so, then deferral is the main issue. Correcting the compensation has its own problems since all past year deposits and reporting have already been done, and quite likley tax returns filed. You should need to file 941Cs, W-2Cs, 1040X etc.

I do not think that your research would turn up anything that specifically addresses gratuities, sales tax or dispensing fees either. The fact that something is not specifically addressed should not be the deciding issue. Was the expense incurred related to medical treatment? Was it a customary part of the transaction? Would you have also treated a gratuity or service charge that is added (without option) to a bill by a restaurant etc as a questionable item?

Would you care to expand on what you mean by "a reimbursement account type of cafeteria plan "? The reimbursement plans in a Cafeteria Plan is either an FSA for medical expense or for Dependent Care expenses. However, you could mean something else.

You say that she stopped contributing, but did she leave an unused balance in her account? Is this what she is seeking reimbursement from?

Shouldn't this reflect whatever wording is in your PD and SPD rather than be generic or reflecting someone else's situation?

Depends on who Ned (or you) thinks needs the protection. The PS who might get attacked or dismembered by the IRS etc or for the Plan in case of death (by lack of funding)? An early start for savings for anything is always a good idea.

Would the coverage be for the DB Plan, the Plan Sponsor, or for the participants?

The rules of DBRA do surprise many people.

There seem to be details missing. If the DB Plan was the beneficiary and they disbursed to the participant's estate, or beneficiary, more than they were supposed to after receiving death proceeds from the insurance companies, then a request should be made to the recipient od the disbursement. But the questions this raises are Why would they disburse before receiving settlement? and How was such an error made if they did not advance disburse? If however, the insurance companies paid the death benefits etc directly to the beneficiary, then recourse should be to the insurance companies. But that raises the question of how this affects the Plan and why it should care. But somehow, this seems too simple, and suggests that there must be more to the issue. What did cause the problem?

Employee contributions that are part of that employee's wage determination are 100% vested and not forfeitable. After all it is part of the employee's wages that could/should have been paid in cash. Employer contributions that are not part of the wage determination can be subjected to a vesting schedule since this is not employee money nor was it used to satisfy the wage determination.

The Instructions for Line 31 has conditions for use of that deduction, such as "Health insurance benefits paid for you may be shown in Form W-2, box 14". What happens if it is not but shown included in box 1 or elsewhere? The Instructions also state "But if you were also eligible to participate in any subsidized health plan maintained by your ... employer ...... amounts paid...cannot be used to figure the deduction." It also states that for details see Pub 535. Pub 535 pages 24 and 25, in Section 7. Insurance explains and includes Worksheet 7-A. bzorc, It should not matter since a section 125 deduction is not for "section 125 plan" itself but for the "health insurance plan" or other eligible benefit.