Moe Howard

Do the new ERISA "medical claims deadlines" that the DOL requires a plan's insurance company to follow ... have to be described in the Summary Plan Description ? It seems that the SPD wording might have to be quite lengthy to fully explain the new regulations. Medical insurance companies must now process medical claims faster than before. The fact that there is now a separate set of DOL rules for each of three types of claims (urgent health care, pre-certification health care, and post-service health care) will make the SPD more difficult to write. Can anyone direct me to a SPD on the internet that has this new disclosure ? Thanks

Are 457 plans required to issue a summary plan description to its participants ? I would think not, because a 457 is not an ERISA plan. However, how is the plan supposed to educate a participant as to what a 457 is, how a 457 works, and the participant's rights in a 457 ?

GBurns: I mean in your earlier reply (02/24/03) in this thread. In that reply you said that an opt-out payment is tax free. It's hard to believe that you are really a professional benefits consultant. It appears that you think that we are interested in your guesses to our questions. I suggest that you stop posting so many replys in these message boards. Your credibility has reached an all time low.

GBurns: You said in your earlier post that an opt-out payment (to employee from employer) is not taxable to employee , if the unwanted benefit is in the employer's cafeteria plan. You don't really believe that do you ?

GBurns: Thanks for your attempt to help me .... but part of your answer is nonsense. According to IRC 125 ... "the cafeteria plan document must specifically describe each of the benefits available under the cafeteria plan". It's the law. Also, what do you mean by "opt-out payment" ? I have never heard of that phrase before. (It's a payment from who to who?).

I've heard for many years that a 401(k) is one of the benefit plans allowed in a cefeteria plan. I have always wondered why any employer would want to list his company's 401(k) in his company's cafeteria plan document, because a 401(k) is pretax on its own (thus inclusion in a cafeteria plan is not necessary). Does anyone know why the IRS would include a 401(k) as one of the plans allowabe in a cafeteria plan ? Does anyone know, under what circumstances an employer would benefit from having its 401(k) in a cafeteria plan ????

An employer has offered pre-tax benefits (fully-insured medical and 401-k) to its employees for years. Everyone is happy. The employees are fully aware that their premiums and deferrals are being withheld "pre-tax" from their wages. The employees obtain coverage in the medical & 401(k) plans by simply filling out a standard "group enrollment form" furnished to them by the insurance company (medical) and the trustee bank (401-k). Neither form constitutes a cafeteria plan "election form". Neither of these documents mention anything about "cash or deffered arrangement or pre-tax" In other words .... the employee participants are never given an "election form" by anyone, on which they can officially choose to receive cash or the pre-tax benefit . It's all verbal. The employer simply tells eligible employees to "fill out the medical group enrollment form and bank forms if they want these pre-tax benefits". Is there any IRS or ERISA rule that written election forms have to be used. Or is verbal agreemnet legal ?

Employer invites a local insurance agent to his business to sell his employees "supplemental policies" (such as accident, short-term disability, cancer policy, and life). Employer will pay none of the premiums. Employees will pay all the premium via payroll withholding. The employer's only involvement is witholding the monthly premims from employees' paychecks "PRE-TAX" and then mailing the premium to the insurance company. MY QUESTION: Are these ERISA plans ? Doesn't the "pre-tax" aspect (as opposed to after-tax) make these plans ... ERISA plans (even though the employer's involvement is very limited) ?

An employer pays 100% of the group life and group disability premiums for its employees. Are these two plans ERISA PLANS ?

IRC 106 says that "employer paid medical insurance premiums (for employee)" are not taxable to employee. Well, what about when the employer is a church and the employee is the church minister (he pays SE tax on his income from the church). Since he is self-employed for SE purposes ... then wouldn't that mean that he is NOT an employee........ and therefore the medical premiums are taxable to him for both income tax and SE tax purposes ?

R.Butler: You say it states it on the "form". What form ?

Yes, that's what I'm asking. When must the match be deposited?

It says nothing about the required frequency of matching. It only states the "% limit" that must be matched. Is there any IRS or DOL requirement regarding frenquency ?

Can employer wait until last day of plan year to match for a Simple-IRA ..... or must he match monthly (throughout the Simple's plan year) What about a Simple-401(k) ?

mb: It's called "restating a plan" (not merging and not terminating).

Can an employer simpy discontinue its "self insured medical plan" or must it jump through a few hoops first (such as inform the employees a certain number of days prior to ending the plan, get IRS approval, etc...). Anyone know of any literature I can read regarding termination of a self insured medical plan ?

Can anyone direct me to a website that discuses "Amending and restating a MPPP into a PSP" as opposed to merging a MPPP into an existing PSP ?

I know that a MPPP can be merged into an existing PSP ..... but can a MPPP be merged into an existing SEP ? If yes .... then is there anything that I need to be careful of, or is such a merger performed the same as meger into a PSP ?

If a former participant's vested balance in his employer's PSP is only a small amount (say $10), and he requests a lumpsum distribution of it (no roll over) .... must the plan withhold 20% ? Or can the plan simply pay him the entire $ 10 ?

Rev Ruling 61-146 says that an employer can pay the medical insurance premiums on the "individually owned medical insurance policies" of its employees. Such employer payments are not taxable (under IRC 106) to the employees..... if the employees furnish the employer with proper proof of coverage and premium $amount. My Question: Is such an arrangement an ERISA plan ? (Is a SPD required?) I would think not ... because there is no group insurance policy.

Employer filled out GUST adoption agreement several months ago. The "entry" section of the adoption agreement allowed the employer to choose from various entry dates .... but the employer neglected to choose any of the methods offered in the adoption agreement (he left the section blank). Shortly thereafter, when allocating the current year (2001) profit sharing contribution ..... only one new eligible participant entered the plan in the current year. The new participant's allocation was made (by an outside CPA that was hired to prepare the employer's corporate income tax return) on the basis that new participant entered the plan on the first day of the first month after he had completed the 12 month service requirement. The contribution was made and the portion allocated to him presently sits in his participant account. After all the above took place, it was discovered that the adoption agreement section had been left blank and the the CPA had taken it upon himself to concoct an entry date choice (of first day of first month after meeting 12 service requirement) to use for allocating the contribution. My Questions: 1) Is the plan in violation of anything ? 2) Can anything be done to now choose an entry date of "the 1st January 1 or July 1" after the 12 month service requirement. 3) If an entry date in 2) above is used ..... can the employer reallocate the year 2001 contribution and get some of the contribution back from the new participant's account ?

Does PTE 80-26 define the word "loan" ? In other words ---If employer pays the plan's debt ($25,000) directly to a third party (the former participant) .... does that create a loan under PTE 80-26 ? If so, then a $ 25,000 loan (due by plan to employer) arose without the plan ever having possession of the $25,000 that employer paid. As far as repayment by the plan (of the $ 25,000) to the employer.... wouldn't such repayment arise when the employer informs the plan that the employer wishes to contribute $100,000 to the plan for the current year, but since the plan already owes the employer $25,000 -- then the plan should retain such $25,000 and apply it toward the employer's current year contribution. Then employer would pay the plan $75,000 and thus, the $100,000 contrinution would have been made. If all the above is done within 3 days .... then the 3-day execption of PTE 80-26 says that such a loan is exempt from PTE 80-26. It all depends on how PTE 80-26 defines the word "loan".

Katherine --- when you said "YES" (in above reply) .... are you saying that employer can do what I described ?

A profit sharing plan's assets are in investments that are not easily convertible into cash. The plan must distribute a former participant's $25,000 vested benefit to him within the next 30 days. The plan's regular discretionary PSP contribution for the current year will be $100,000. My Question: Can the employer (rather than the plan), directly pay the former participant the $ 25,000 ? .... Or must the $25,000 be paid directly from plan assets? I would think that the employer could give the former participant an employer check for $25,000 and then the employer could deposit $75,000 to the plan (but employer would get credit for a $100,000 contribution, rather than just $75,000).

I'm surprised that there is very little in Benefitslink.com regarding anything about short plan years. My Question: A PSP & MPPP are going to terminate at 12/31/02. Benefit accruals will cease at 10/31/02. The plans have only one participant. The administrator is trying to determine the max that can be contributed to the PSP for 2002. What effect will the fact that eligible compensation will be comprised of only 10 months, have on the max $amount that can be contributed to the PSP ?