Flyboyjohn

If not using the look-back then you're using the monthly method so the "units" are CALENDAR months in which the employee works 130 or more hours. If you've offered MEC to at least 95% of the employees who qualified as full-time for that month then you've satisfied the requirements to avoid the "a" penalty for that calendar month.

Agree with GMK, employers who can have "accidents" need to use the look-back measurement method of determining an employee's FT status and not the monthly measurement method. Using the look-back method ensures that the employer knows in advance whether an employee is going to be treated as full-time (or not) for the following stability period.

I'd like to add to the topics to be discussed in this thread the annual 1099-R reporting of the term insurance value (PS58 cost). I contend the life insurance company should be responsible since they know the policy is owned by a qualified plan and sometimes they do but often they don't. Do practitioners routinely issue the 1099-Rs or is it one of those pesky items that generally slips through the cracks?

Leevena- we didn't provide any info to the carrier, they already know who they covered in 2015. J Simmons- we're 99% sure deflecting our employees to the carrier's 800 number that takes an hour before someone answers or the yoyo on the other end was hired the day before will result in frustrated and angry employees, something we'd like to avoid

Hopefully the client is filing 5500s for the 403b and not contending non-ERISA status?

We're telling our health insurance carrier we want a copy of all the 1095-Bs that they're sending to our 2015 covered employees. We're identified as the "employer" on the forms and the forms are going to our employees due to their relationship with us. Plus the employees will be calling us (and not the carrier's 800 number listed on the form) when they have questions. So far the carrier is refusing our request (citing privacy issues) and I'm wondering what others are experiencing with their carriers. Thanks

No prior encounter but would bet that IRS will say option (A) on the theory that had the employee elected a % of pay the IRS would say the employee contribution should have been deducted from the bonus

I don't see any basis for treating them as "newly eligible" for 4980H purposes

Had a possibly comparable situation where someone did a ROBS deal, turned out to be spectacularly successful investment and when the owner realized he'd turned a large capital gain into ordinary income wanted to go back and find a way to undo the deal. I probably haven't followed your facts closely enough but if you're confident that the IRS can't and won't "lose" by the disavowal then I'd be more comfortable with the concept.

5500s are filed based on plans, not based on employers or controlled groups of employers. A single employer can have multiple plans for different segments of their workforce and conversely groups of employers (whether controlled or not) can jointly sponsor a single plan. So your bottom line question has to be how many welfare benefit plans are you dealing with and how many participants does each plan cover. Which then leads to the discovery that your client doesn't have a plan document or SPD for its group health "plan(s)" that would absolutely answer the question so you'll probably have to fall back on the contract(s) with the insurance carrier(s) and how many participants are covered by each contract. That being said if the client was offering 2 different health insurance contracts to the same group of employees I wouldn't recommend taking the position that they had 2 health insurance plans if it resulted in both "plans" falling under the 100 participant filing threshold.

The question of "disavowing" the qualified plan just because it turns out to be the better result with the benefit of 20/20 hindsight (heads I win and tails the IRS loses) strikes me as possibly rising to the level of fraud and me thinks your client needs the services of the proverbial good ERISA attorney (unless you is one).

I'm hoping there are enough ACA geeks lurking on BL to make it a good forum for sharing questions and ideas on the details of the new 1094-C and 1095-C. Here are my first 3: 1. Does a code have to made on Line 14 of the 1095-C for all months even if the employee is full-time for as little as 1 month? I think YES. 2. Can line 16 be left blank? I think YES. 3. If an employer claims 50-99 mid size penalty relief for all of 2015 on Form 1094-C can they safely leave line 16 on all their 1095-Cs blank since they will be exempt from both the "a" and "b" penalties? Thanks

Controlled group member participates in a single employer plan with other members but wants to fly the coop and set up their own plan. Is the new plan eligible to elect Prior Year testing and use the special first year testing rule that permits the highly compensated to defer 5% irrespective of NHCE deferral rates?

You're correct, small employer only gets caught up in the ABC forms if it's offering a self-insured plan and even in that instance the plan TPA has probably (hopefully) been contracted to prepare the 1095-Bs and 1094-B transmittal for signature ready mailing/filing.

To answer DR the company folded, all the employees terminated employment so no they are no longer employed by a member of the controlled group. We'd like to clean them all out of the plan on the basis of "plan termination" but suspect we can't since the plan hasn't terminated.

Member of controlled group participates in a single employer plan. That member goes out of existence, can we say that the plan terminated with respect to that participating employer thereby allowing us to force out all of that member's participants? Or do we have to let participants with more than $5,000 and under age 62 leave their accounts in the plan? I'm guessing it's the latter since "the plan" didn't terminate but I'm looking for a cite. Thanks

No, you're not missing anything. And not only does it not have to be affordable it also doesn't have to meet minimum value. So a "skinny" (MEC) plan ($50/month) might be attractive since it avoids the employer penalty in case the employer has misclassified the employee as "part-time" and if the employee takes it he avoids the individual penalty.

The issue is affordability. If the employee can take cash in lieu then affordability is determined based on the entire premium for self-only coverage with no offset by the potential employer contribution. So an employee for whom the premium was unaffordable (more than 9.5% of Box 1 wages)would be better off taking the employer cash, going to Marketplace and getting premium tax credits and triggering the employer 4980H(b) $3,120 penalty.

How about using a profit sharing document with some sort of overarching modification to the effect that while the employer intends that the plan will meet the requirements for tax qualification and provisions inconsistent with the plan's exemption from ERISA are null and void?

After much digging I found the CMS determination of the 2015 "premium adjustment percentage" to be 4.21% so applying the adjustment methodology in 4980H the 2015 penalty amounts should be $2,080 and $3,120. But still no official announcement from IRS that I can find.

Since the DOL hasn't asked for 2011-2014 5500s and IRS hasn't asked for any non-filing penalties I'd let sleeping dogs lie.

A recent IRS Tax Forum publication shows $2,080 and $3,120 as the 2015 amounts but not sure if it's just an estimate.

Intuitively I would think that the employer match under a SIMPLE 401k should be treated as a QNEC subject to in-service distribution restrictions but can't find any support, anybody have a cite?

401(k) plan covers sole owner and 1 common law employee, files 5500-SF. The one employee terminates employment and is paid out this year so we will file an SF for 2015. In 2016 can we contend the plan is now non-ERISA and not file anything if assets are under $250,000 or file an EZ or one-participant SF? I guess my question is can a plan float back and forth between ERISA and non-ERISA from year to year or might the government contend "once ERISA, always ERISA"?

For the "a" penalty I've seen estimates of $2,080, $2,084 and$2,120, anybody seen an official release? For the "b" penalty I've seen $3,120, $3,126 and $3,180? Thanks