Flyboyjohn

Thanks, obviously a daunting and expensive task. Since the 15 employers are widely separated geographically, no employees work for more than 1 of the employers and all the plans have TPAs that "test" the plans as if they're not part of a CG could we reasonably reach a conclusion that the CG is "in compliance" if we gathered enough data to confirm that all plans pass coverage when tested on the entire CG basis? I seem to remember that if all plans can pass coverage you don't have to perform any group ADP/ACP testing or worry about different BRFs?

Holding company has 15 wholly owned subsidiaries which all have separate qualified plans (mostly 401k plans). Does anybody have any tips/tricks for simplifying the process of performing (or avoiding?) coverage (and other?) testing across the controlled group?

Small employer has sponsored a SIMPLE IRA for 8 years. Small Employer now discovers/recognizes that it's part of a controlled group with thousands of employees and was never eligible to sponsor the SIMPLE IRA. What's the fix? It couldn't be as "simple" as stopping contributions and filing for a compliance statement under VCP? Thanks.

Participant dies while alone and with trauma to head evidently caused by falling on coffee table. Participant has history of drug abuse and police confiscate her phone presumably to search for drug dealer? Her body is cremated, and Death Certificate indicates cause of death "Pending". Indications from authorities are the cause of death may never be known. Plan Administrator refuses to pay plan benefits to surviving spouse death beneficiary until cause of death is determined, presumably out of concern that a state "slayer" statute may not be preempted by ERISA and might preclude payment to her slayer. Wondering if anyone has encountered this situation or has a suggestion of how to deal with the impasse. Many thanks for any suggestions.

The scheme to have the skinny plan avoid BOTH the (a) and (b) penalties is to auto-enroll all FT employees in the skinny plan with employer paying 100% of the premiums (under $100/month with premium rebates possible). Since the employees are "covered" by and employer plan that provides MEC they are ineligible for Obamacare subsidies and therefore cannot invoke an employer (b) penalty. To obtain subsidies the EE must affirmatively opt out of the ER provided MEC skinny coverage and of course the EEs don't always understand the opt out option and voila no (b) penalties either. Like I said, a little too "cute" a scheme for me.

Yes, these so-called skinny plans have been around since ACA enactment and do avoid the (a) penalty but provide virtually no benefits beyond an annual wellness visit (preventive care). Typical "premiums" under $100/month/FT employee with possibility of "rebates" to the employer if minimal usage of benefits, The rub is the exposure to the (b) penalty for all the FT employees that visit HealthCare.gov for subsidized coverage so might be a viable option for an employer with a large number of FT employees on Medicaid or Medicare or covered by spouses so (b) penalty exposure is minimal. Please avoid the scam/scheme of the employer auto-enrolling all FT employees and paying 100% of the premiums for the skinny plan that precludes subsidized Obamamcare coverage and therefore also purportedly avoids the (b) penalty, a little too cute in my book.

My understanding is that non-ALEs offering an ICHRA are supposed to file 1094-B and 1095-Bs. Other than the "because it's the law" and "there could be substantial penalties if your failure is discovered" is any real purpose served by such filings? Thanks

Thanks again Brian, my heartburn is the "trap" presented by the immediate nature of the obligations foisted on the unsuspecting/uninformed former non-ALE. I think there should be some grace period like the transition period provided in the qualified retirement plan world when a new controlled group is created. In the ACA sphere we have the nice 3 month limited non-assessment period for January-March of the first year becoming an ALE and it would certainly be nice to have a similar period after becoming an ALEM. Thanks again.

Thank you very, very much Brian, you make an interesting argument but I can't yet agree that it's clearly supported by the statute or regulations. My argument is that an employer's status as an ALE or ALEM for a particular calendar year is always determined based on monthly average FT/FTEs in the prior calendar year and, once determined, cannot change during the particular year. Accordingly under the facts posited the earliest that the new ALEM could be subjected to the employer mandate is 1/1/2023. Can we agree to disagree or do you have any additional support for the position that ALE status can change "suddenly" upon a change in ownership? Many thanks for your thoughts.

Owners of an ALE purchase a non-ALE 10/1/2022, making the non-ALE a member of an Aggregated ALE group as of what date? Applying the normal 2022 look back monthly-average-FTEs to the prior non-ALE falls below 50 (even after including the ALE employee numbers for Oct-Dec). Does the non-ALE become a member of the Aggregated ALE group on 1/1/2023 or not until 1/1/2024? Thanks

I'd argue it's a "payroll practice" that doesn't rise to the level of an ERISA covered employee benefit plan. The more interesting question is how they treat the payment for tax purposes, W-2 or 1099 issued to deceased retired employee or check recipient?

Plan Sponsor/Administrator files 2018 5500-SF one year late (not under DFVC). Ignores IRS penalty letters and IRS has now assessed a $70K penalty. No DOL penalty assessment yet. Can we file an amended 2018 5500 under DFVC and get IRS penalty abated or is it too late? Many thanks.

I understand the exclusion of LTC coverage from employee income but wonder if you have a cite supporting exclusion from income of outside directors (independent contractors), thanks.

Yes, you are correct, I often tell employers to pick their 30 best employees and work the heck out of them but limit everybody else to less than 130 hours a month and you’re exempt from ACA ESRP penalties (but of course they still have to file the darn 1095-C forms if they’re an ALE).

Corporate taxpayer has been paying premiums for individual Long Term Care policies on its outside directors for over a decade, no 1099s issued. Is there any basis for excluding these premiums from director income? If not, is the proper reporting form a 1099-NEC? Since “correction” of the problem will be many amended tax returns, anybody willing to venture an opinion on how many years delinquent 1099s should be filed? Thanks .

If the employer is not intending to make any contributions then a non-ERISA 403b is the ticket (no ADP testing, no 5500, yada, yada). If the employer intends to make contributions that would meet a 401k safe harbor then 401k is the ticket (larger universe of investment/record keeping platforms, avoid universal availability, plan investments not restricted to annuities or mutual funds)

1. Set up the new 401(k) which invalidates the Form 5305-SEP as you mentioned. 2. Take a corrective distribution of the 2021 failed/excess contribution (and applicable earnings) from the SEP-IRA account by 4/15/2022.

Plan has discretionary match but no allocation conditions (no last day rule). Plan sponsor now considering making a 2020 discretionary match but wants to amend to add last day rule. OK or a prohibited cutback for participants who deferred in 2020 but have terminated employment?

Looking a copy of the EBSA Q&A 15 from the 2009 Enrolled Actuaries Meeting (deals with payment of plan expenses). Thanks in advance.

Yes we were successful with an anonymous VCP for a 403(b) plan where the "good faith" 2009 plan document failed to exclude the <20 hour/week employees but sponsor could demonstrate consistent application of the exclusion. Of course we were aided by the argument that the 2009 "good faith" document did not have to be perfect despite the Service's published position that eligibility errors could not be "corrected" when the preapproved 403(b) document was executed.

Our last 2 VCP submission both took right at 12 months to receive the Compliance Statement. The most recent reviewer mentioned that he was an EB auditor who had been reassigned to the VCP program to help with their backlog. Good news was that since he was an experienced field auditor he was flexible in getting to a mutually agreeable creative solution to a difficult situation that didn't fit precisely within the normal correction methodologies.

Some health insurance carriers are reducing premiums or providing rebates due to lower utilization of medical services so the issue arises whether the employer has to "share" the savings with employees. My view is that these are essentially an advance payments of Medical Loss Ratio Rebates the insurers would normally be sending later in the year and therefore need to be "shared" with employees as we do with MLRRs. Anybody taking a contrary position? Thanks

Unfunded deferred compensation plans are set up all the time for partners in partnerships, note for example many of the large CPA firms which operate as partnerships and have very robust non-qualified "retirement" plans for partners. What is it your client is trying to accomplish that you feel is problematic just because it's a partnership?

A self-funded health plan is not subject to the ACA's mandatory Medical Loss Ratio (MLR) rebate requirements and disposition/handling of the "excess" will be governed by the plan document. If you don't find anything in the plan document and it's a "general assets" plan (no trust) then the excess belongs to the sponsoring employer to do with as it sees fit.

Acknowledging that the self-employed must make their cash or deferred election no later than the last day of the taxable year might it become standard practice/advice that whenever an unincorporated business is established the self-employed owners all sign an evergreen election that if the business ever retroactively establishes a qualified plan that includes a CODA then the proprietor/partner elects the maximum 401k contribution?