mdm09

Agreed with previous posters, but posing one question. Is the idea that the school will pay the employee portion only for the retiring superintendent, or for all retirees for the period before the superintendent reaches Medicare age? I'd check the nondiscrimination rules in either case.

I agree with Chaz on both counts. An attorney experienced in welfare benefits and related tax issues is what you need. I've had clients with this issue and the analysis is much more nuanced, and the resolution more complicated, than one might expect.

Agree that it's permissible, but you'll want to consider whether to give 30 days' advanced notice (probably yes, but in certain circumstances advanced notice is not required).

Along the lines of what Fiduciary Guidance Counsel said, most of the time final claims decisions, even for self-funded medical plans, are delegated to the TPA. Most plan sponsors do not want to be in the position of making final claims decisions, both for the practical reason that they do not have the medical expertise to do so and because, as leeveena and Luke Bailey stated, it opens the sponsor to 105(h) issues and breach of fiduciary duty claims. In short, absent some irregularity of the first type leeveena mentioned, I would not recommend this to any plan sponsor. A plan sponsor should stick to the document, in terms of who decides appeals and following the actual terms of the plan regarding whether a particular service is covered. If the employer wanted to do something for the participant, outside the plan is the better place (in my humble view). Of course, outside the plan has tax consequences that inside the plan does not.

Assuming Sooner Care is a form of Medicaid (not Exchange coverage), an employer-sponsored plan can (but is not required to) allow an individual who loses Medicaid to enroll in the plan mid-year, but the reverse is not true--the plan cannot allow an individual to drop plan coverage mid-year if he or she enrolls in Medicaid. See Treasury Reg. 1.125-4(f)(5).

Again, look at ERISA 104(b) and associated regs--that's the citation. It states when the notice has to be given, and under what circumstances.

Most HRAs sponsored by private sector employers are subject to ERISA. ERISA requires advance notice of certain types of changes. See ERISA 104(b)(1) and associated regs.

When I've spoken to the DOL about this in the past, the recommendation was to file the missing Forms (making sure to use the proper year's Form for each filing) and include an attachment explaining the situation. While the response can take a couple of weeks, if you've called the proper DOL number I would expect a response. Try the number listed on the M-1 filing site, if it's different than the one in the regulation preamble.

Thanks for your response. I made some assumptions about what a reader would know when drafting this question, on which you've now taken me to task. (Good for you.) You're right that the (b) penalty can only be assessed if the employee gets Exchange coverage and qualifies for a subsidy. This could happen for a part-time employee even if the coverage is "affordable" for a full-time employee. So, an employee who was part-time and received a subsidy while part-time could move to full-time and, if not offered the opportunity to enroll in coverage once becoming full-time, cause the employer to be assessed a penalty I think. (Which means I might be talking myself out of my initial position.) Maybe an example would be more clear. Employee is hired on January 1 as a part-time employee and offered coverage, which employee turns down. Employee gets coverage on the Exchange and qualifies for a subsidy. Employee moves to full-time status on June 15. Employee is not offered coverage and, if still receiving a subsidy (because income did not go up enough to lose it), will cause the employer to be assessed a penalty for months October through December. I think? This may seem like a crazy law school hypothetical, but the client is in retail so this fact pattern would not be impossible.

The concern is that the initial offer, when the employee began in a part-time position, would not cover an offer required to be made when the employee moved to a full-time position during the initial measurement period. Or, maybe more precisely, that an individual moving from part-time to full-time status during the initial measurement period must be offered coverage due to the status change regardless of whether he or she was offered coverage as a part-time employee at the time of hire. The rule is quite clear that coverage must be offered to the formerly part-time now full-time employee by the end of the required period (to paraphrase) in order to avoid a penalty, but the rule seems to contemplate a situation in which a part-time employee has not already been offered coverage. Further, it's not entirely clear (at least to me) whether the coverage must be offered between the date of status change and the end of the required period, or at any point prior to the end of the required period (including before the status change). I don't think you're missing anything--my own view is that the initial offer is enough, but I can see why the IRS might disagree so thought I'd consult the brain trust. That said, the cafeteria plan rules (obviously different than the ACA rules but implicated in this question) would not allow an election change in this situation, barring a separate election change event of course. The IRS updated the cafeteria plan rules to allow an election change in two situations created by the ACA but did not make any updates related to this situation. This also leads me to believe that the first coverage offer was enough. But I can see how the IRS might argue that as a policy matter coverage needs to be offered again, and failure to offer the coverage would result in a penalty. Thank you for your response! And sorry if mine's a bit rambly.

My apologies if this has been asked and answered; I haven't seen it yet. Employer offers coverage to all employees working 20+ hours per week, with employee cost and coverage options identical regardless of hours worked. New employee in initial measurement period working 20 hours per week transfers to a new position that would have been 30+ hours per week if new employee had been hired into it. New employee is not yet in the administrative period. Does the employer have to re-offer coverage, consistent with the ACA timing rules, when the employee moves to the new position, or is the initial offer of coverage when hired into the 20 hour per week position enough for the employer to avoid an ACA penalty? Thank you for any insights!

Many thanks to you both. I should have mentioned this in the original post, but the employee and partner/spouse are opposite-sex, not same-sex. Therefore, I thought the IRS guidance on same-sex marriages was inapplicable. (I considered using it as guidance but in the end decided the issues were too disparate.) I agree with you both about the approach to take if the employee and spouse/partner were same-sex. In the end I think the better choice in this situation is probably not to allow a change in the coverage from domestic partner to spouse until the start of the next plan year, because the pre-tax nature of a benefit is the essence of a cafeteria plan election and the Service has said (albeit in informal comments) that an employee's mistake as to the tax treatment of a benefit is not grounds to change a cafeteria plan election. Of course, if before the start of the new plan year the employee experiences a change in status that would allow a change under the cafeteria plan rules then the change would be allowed.

I'm not sure this is a cafeteria plan issue--I think it might be more of a straight tax issue. In any event, the situation is as follows: Employee covers domestic partner on health plan and pays for domestic partner benefits on an after-tax basis. Employee produces marriage certificate indicating that the employee and domestic partner married two years ago. Does the employer have to change the tax treatment of the amount paid for the domestic partner/spouse's coverage, and if so as of when (date certificate was produced, beginning of year, back to the date of marriage)? Anyone have any insight? Obviously this is not a permitted election change event under the cafeteria plan rules, as the marriage happened two years ago. Thank you!

Actually, 105(h) does mean exact type of benefits, as far my colleagues and I can tell. It also means contribution rates, eligiblity, waiting period, and the like. See, however, the exception under 1.105(h)-11©(4). Honestly, though, I'm never sure what to make of that rule.

It should be -- the anti-cutback rule does not apply to non-electing church plans. But you'll want to carefully review the rules as to which IRS rules do and do not apply to non-electing church plans.