MD-Benefits Guy

Brian, thank you for the detailed response. This is the exact info I need to defend the denial of payment. I am pretty certain this employee will escalate things to the executive team once she doesn't get her desired response from HR. In this particular instance, the employee is claiming that they missed the filing deadline because they were on maternity leave and simply did not have the bandwidth/ability to gather all of the info to submit her claims on time (a bit hard to believe, but that's her story.) Not that it applies here, but curious to know if there is any possible consideration to be given if a participant was in fact temporarily physically or mentally impaired during the run-out period or may have relied on misinformation from a plan representative (as suggested by Peter?) Based on what you shared, it doesn't appear that there is language in the law to allow for such an accommodation. As a follow-up question, does anyone have an example of a plan being disqualified for not following the plan rules? I'm just trying to prepare myself for the possible management/executive response of "I know that we are supposed to follow the rules, but how likely is it that the IRS finds out and disqualifies the plan based on this one instance?" I am hopeful that I don't get that response from management, but it would be nice to have response/example ready.

Our plan document states a 3/31 cutoff for claims submission on DCFSA. We have an employee that has submitted $5000 in 2022 claims after the deadline. If we authorize the TPA to process the claims, how much liability are we creating for the organization? I hate creating policy exceptions, but also don't like seeing an employee lost out of $5000.

JCJD, can you explain the justification for your answer? I'm not saying you are wrong, but I thought the rule was that you cannot participate in an General Purpose HCFSA and an HSA at the same time. if someone has a HCFSA through their job and then their employment terminates, they are no longer an FSA participant...correct? Why wouldn't they be able to establish an HSA with a new employer?

Employee is a General Purpose HCFSA participant with HMO. Employee has a life event midyear and wants to choose HDHP and open an HSA. Is this permissible? I have seen several sources say that you cannot have both a General Purpose HCFSA and an HSA in the same year. I know you cant do them at the same time, but can you have both in the same year?

Our company is looking to change HSA Vendors from JP Morgan Chase to either: Connect Your Care Health Equity Optum Health Wage Works Curious to hear if anyone has experience with any of these companies from an administration standpoint and hear some thoughts on these vendors.

Our 401k plan specifies that we use w2 wages for compensation, but I don't believe that it stipulates which method to use...top 20% or the compensation income limit ($115,000 for 2012 I think). Can we use either top 20% or compensation limit if not defined by the plan documents? Also, are companies required to use the same methodology and compensation definitions for Health and Welfare testing as their 401k testing? Can a company use top 20% and W2 compensation for 401k, but use the basic 415©(3) definition of compensation and comp limit of 115k for Health and Welfare testing? If companies are required to use identical definitions, can someone point me to the specific section of the law spelling out this requirement. Thanks.

I know that the law allows for several life status changes to open the door for Sect. 125 mid year changes, but I am curious to know what, if any changes are required under a plan. Could an employer effectively write a plan document that does not allow any mid-year elections? Not saying that this is ideal, nor am I trying to do it.....just that I've seen variation in plans where some allow certain events to trigger a permissible mid-year change, while the same events under another plan does not.

I've been asked to become more involved with out international benefits and I was wondering if anyone can point out some good resources for getting up to speed on the legal requirements and benchmarks in various countries? TIA

Thank you for the responses. I agree that this should be a non issue and that there are many elements to comp, many of which appear to create some level of inequity in various regards. Additionally, I don't think this would even have much of an impact. Any suggestions on what I can throw at this manager to help convince him that this is not something worth pursuing. From top to bottom, I have HR support, just looking for a solid/specific reason to give this manager on why we cant do it. A few initial thoughts: - we are a on a prototype plan....wouldnt changing the match to something like he's trying to suggest mean we couldn't use use a prototype plan (unless that is an approved option under the plan...which i dont think it is) - Testing....I am not intimately familiar with the testing, so I need some help here.....could this type of match foul up our testing or our options. Thanks again.

Our company has a policy to match 20% of an employee's 401k contribution up to 6% of their annual salary. One of our Sr. Managers is questioning the fairness of the policy. As he points out: Employee A makes 100,000 and contributes 10,000 during the year....we will match on 6,000 for this employee...thus the employee will get a matching contribution of 1,200 Employee B makes 60,000 and contributes the same amount, 10,000....but this employee will only receive a $720 match (6% x 60,000 x 20%). This Sr. Manager's stance.....if both employees are contributing 10,000, then they should both receive the same match. A couple of questions: 1) Does anyone else have a match that isn't capped by % of 401k wages....he is looking for a matching calculation that is based on a flat rate contributed by the employee and not capped by a percentage of salary 2) How would moving to such a matching formula impact testing? Would be curious to hear some thoughts on this concept. Thanks.

Curious to know where I can find supporting documentation, legal precedent for this. This is what I want to do "passive enrollment" but I'm fighting a battle to make this happen. Looking for some support showing why this is permissible.

Is it permissible to have a passive HSA Open Enrollment? Can I just let the 2012 payroll deductions for HSA carry into 2013? We do allow employees the ability to change the deduction amount at any point during the year, so it's not like they are trapped all year with this deduction as they would be for an FSA. The mentality for most of our employees "If I am happy with my current elections, then I don't need to do anything" (this mindset persists even when I beat them over the head with communication telling them otherwise). Curious to know if it is permissible.

I'm with a company that has just over 500 employees and I am looking for a new Benefits Enrollment/Management system. Currently, I am using Oracle, but it is just painful both for the employees and administrators. Was wondering if anyone had suggestions. I did a demo of the Benefit Focus system and really liked it, but they recently made a decision to stay away from companies with less than 1000 employees. Any suggestions....here is a wish list of features: - We are international, hace employees in several countries. Would like to be able to assign different benefit / workflows for different employee groups. - We are also self insured with self bill, would like the system or provider to handle billing and reconciliation. - Carrier enrollment....at least for US, I would like the system to pass enrollment info directly to carriers on a weekly basis. - Easily pass employee benefit costs to ADP. - Easily pass employee costs to Oracle (I cant get rid of ORacle completely, it is an enterprise wide system. Thanks.

I am looking at a prototype plan adoption agreement that states for ADP/ACP purposes that all wages will be included, however matching calculations have several exclusions. Is it permissible to have a different definition of wages for testing purposes? If yes, is there something I can cite as a reference. Specifically, the company does 401k matching only on regular earnings....however for testing purposes they have included Bonus, Commissions, and (this is the one that really throws me for a loop) stock related income (ESPP & Stock Option) that is reported on the w-2. Doesn't make sense.....Bonus & Comm I get, but why would you include stock related income (I know it's w-2 income, but it isnt possible to defer from this income)> Thanks for the feedback Im certain to get.

I am trying to get a better understanding of the testing requirements related to Health & Welfare plans and have heard different things from different sources: 1. Exactly what tests must be run? 2. I've heard that in some instances that you dont need to identify the highly comped? Doesnt sound right? 3. In determining the highly comped, what income is suppposed to be used? 4. When is testing done....I have someone telling me that it is typical to do testing near the beginning and then again at year end? 5. What are some good vendors for testing and how much do they charge 6. Do people test company paid life insurance/add polcies.....is it required if all employees get the same coverage (1.5 times base)? Thanks. Also, if someone can point me to some good articles to help educate me, it would be appreciated

Sorry, some more info: Currently there are 317 participants with a balance. 249 are active employees. The 401k administrator does our year end testing and also files the 5500 for us. The financial consultants help us review and monitor our funds in the 401k. We have a meeting with them once a quarter to review fund performaces & make sure that investment objectives are still consistent with the funds stated investment strategy - they use a report from FI360 that we go over. Thanks for the replies.

I am curious to know what others are paying in 401k plan administration fees to their plan administrators? We have about 12 million in plan assets and are being charged .57% that is broken into two parts: .37% by the administrator for their own revenue .20% Expense that is passed to a third party financial consultant Trying to figure out if our fees are resonable or not? Thanks in advance

What does your stock option award/agreement provide with regard to the matters you have raised? These issues are usully spelled out in writing. There are no parameters defined in the plan document, nor was there a documented procedure requiring a conversation with the company's general counsel at the time of issuance & acceptnce, nor was there a policy in place when I left employment. Now I am being told that General Counsel will only approve an excercise window that will last one week...and this approval can not happen until late Monday, after the trading day closes?? Any suggestions? Does this plan have a provision allowing some officer such as the GC or president to administer and interpret the terms of the plan? Most plans do. Also many plans insert vague terms such as reasonable period or subject to applicaple law or regulations which allows the company to use its judgment in how long the exercise window will be. You can ask the GC why the requirements have been imposed but you will have to comply with their rules in order to get your shares. I will have to pull the plan document, but it would make sense that there be some legal restrictions on how long the company could keep me waiting without justification. Aren't there any SEC rules on this?

What does your stock option award/agreement provide with regard to the matters you have raised? These issues are usully spelled out in writing. There are no parameters defined in the plan document, nor was there a documented procedure requiring a conversation with the company's general counsel at the time of issuance & acceptnce, nor was there a policy in place when I left employment. Now I am being told that General Counsel will only approve an excercise window that will last one week...and this approval can not happen until late Monday, after the trading day closes?? Any suggestions?

I have stock options from a previous employer that will expire on 3/31/12. I was not an officer, VP, or other high ranking employee. I clearly have no inside information on the compny, yet I am being required to have a phone conversation with the company attorney to get approval of my excercise? The attorney is in switzerland and I will have to wait for him to get back to have my call? My fear is that during my wait, the stock will pull back and I will lose out (it is risen quite a bit over the last few days). What are the comapny's obligations in this situation? How long can they make me wait? I understand the need to make sure there is no action based on inside info, but in my case it's a bit silly. Additionally, they are looking for an exact date in which I will excercise....I don't know, Im probably going to put in a limit order. Thanks in advance for the info.

Thanks for all the replies. A little more information.....our plan only matches on 6% (at a rate of 20%) of the employees 401k wages. At this rate, I don't think we would run into an issue of matching dollars exceeding the limits.....6% of 250,000 is only 15,000. The maximum match expense for any given employee for 2012 would be 3000 (not including catch-up employees). Is there some other consideration that I should give to this before I tell ADP to lift this rule (the one that does not allow deferrals after annual income exceeds 250k) Thanks for the quick and insightful replies.

We have modified our 401k matching rule this year so that commission and bonuses are included in 401k wages (for deferral and matching purposes). With the new 401k rules, I anticipate that several employees will hit the 401k wage limit of 250,000 in 2012. Our payroll company, ADP, is telling me that once an employee's earnings reaches 250,000 in 2012, deferrals will no longer be taken from wages....even if they have not hit the deferral limit of 17,000? I understand that in 2012 there is a wage limit of 250,000....but I thought this was simply for testing purposes? From what ADP is telling me I could have an employee not participate in the 401k for the first half of the year and if his wages (in the first half) exceeded 250k, then he would be ineligible to contribute to the 401k during the second half of the year even though the employee is below the 17,000 limit? Is this a law or an ADP setting? Legally, are employees allowed to contribute to a 401k after their earning reach 250,000? Thanks.

I am looking for some input regarding a policy as it relates to the dropping of spousal and/or dependent medical coverage by an employee. If an employee wishes to drop his/her spouse during open enrollment or any another qualifying event (other than divorce) - as an employer can I legally have a policy that requires proof that the dropped spouse/dependent(s) have coverage elsewhere or that the person being dropped authorizes the drop? Additionally, if there is a request to drop someone from coverage based a qualifying event - can I have a policy that requires proof of the qualifying event.... My separated spouse just started a new job, so I wish to drop them from coverage. What is a best practice policy to impose for these circumstances? Thanks for the input.

HSA is established in Nov of 2011. Employee is single and has $15,000 in HSA eligible medical expenses in 2011. Can the employee use receipts from 2011 to substantiate HSA withdrawals for 2012 and 2013? Thanks.

You should be able to contribute and spend from your FSA and use money already deposited into an HSA. You however are not permitted to contribute to both an HSA and an FSA (unless it is a limited purpose FSA) at the same time. One thing that you may wish to consider regarding your HSA and what you contributed for the year.....if you were not on the HSA plan for the entire year and became HSA ineligible during the 12 months following the end of the plan year, you may have a taxable event. For individuals who cease participation and were not on the plan for the entire year, their effective HSA maximums are a prorated portion of 3050/6150. See http://www.irs.gov/pub/irs-pdf/i8889.pdf