taxllm

The employer went trough chapter 11 bankruptcy; it has a self-insured plan for active employees. Before bankruptcy it offered retiree medical plan. Now, it has to offer the retirees COBRA coverage for life. Can the employer offer the retirees an insured plan and the active employees the same self-insured plan? Assume that the insured and self-insured plan offers the same benefits and coverage but the premiums for the insured plan are higher then the self-insured plan. The retirees would get the same benefits and coverage but would pay a higher premium than active employees. Is this allowed?

I cannot find authority saying that the ADP/ACP test must be run if the plan used the prior year data even if it adopts QACA. Anybody can point me to it? TPA says they must run the test even if plan satisfies QACA.

In 2008, 2009 and 2010 the plan made in-service distributions when participants were 60, 62 and 63 years of age. The plan allowed for in-service distributions at age 65. Under EPCRS the in-service distributions can be corrected by asking the participants to return the unauthorized in-service distributions under SCP or under VCP by amending the plan to allow for in-service distributions at an earlier age. The question is can the plan correct the 2010 distributions only by retroactively amend the plan effective Jan 1, 2010 to provide for in-service distributions at age 60 without going through EPCRS? Any authority?

What about a B organization? LOAN is a FSO and Bob, Inc. is a B-org. Treas. Reg. 1.414(m)-2©.

What "nursing services (including nurses' board where paid by the taxpayer)" mean? Is it possible to be reimbursed under a Health FSA for room and board for a nurse who provides medical services to a qualifying individual and the nurse lives with the participant and dependent 24 hours? Are there any conditions? I cannot find anything more specific under the IRC.

Does a cafeteria plan that offers a health FSA need to comply with Michelle's Law (amend the plan, provide the notice)? The plan does not define dependent child, it defines dependent as Section 105(b) dependent. Shoud we define dependent child for purposes of Michelle's Law?

Due to economic conditions there was a partial plan termination in 2008. At the time of the partial plan termination the affected participants were 100% vested. Some of the affected participants that were terminated are now rehired. Are the affected participants subject to the vesting schedule for employer contributions made after the terminated employees are rehired? That is, are the rehired employees 100% vested on the employer contributions made after the date of rehire or are they subject to the vesting schedule provided in the plan document?

"Change in coverage" would be changing from the non-HDHP to the HDHP with the HSA. I agree that having the mid-year election only because the policy renews is not enough. If for example the employee keeps the same non HDHP policy the mid-year election would be allowed only if it fits under other 1.125-4 events, such as 1.125-4(f)(2) cost changes. If there is automatic change and the plan document provides for it or the cost increase is significant. Thanks a lot for the feedback, it helps clear some of my confusion on the 1.125-4(f)(4)(ii) reg.

In July the employees can elect between a non HDHP and an HDHP with an HSA. The employees are allowed every December to change their elections for DCAP and health FSA. When would the 1.125-4(f)(4)(ii) apply? 1.125-4(f)(4)(ii) The cafeteria plan permits participants to make an election for a period of coverage that is different from the period of coverage under the other caferia plan or qualified benefits plan. Qualified benefits plan can be a health plan. Thanks

We have a cafeteria plan, which is a calendar year, and an underlying health plan, which is a fiscal year. The employer allows health FSA and DCAP elections in December and election for the health premium in July when there is an open enrollment period for the health plan. Does the employer have to allow employees to make an election for the health premium in December, before the start of the cafeteria plan, or is the July election enough? Is the mid-year election allowed under 1.125-4(f)(4)(ii) change in coverage under another employer plan?