Flyboyjohn

Not sure I can agree because the testing rules clearly allow a reduction in corrective distributions for an available amount that becomes a "catch-up" because it exceeded a testing limit. If we have to accept that a catch-up only belongs to the individual and not the plan we could never use the catch-up created from a test failure because we would never know if the HCE also contributed to another 401k maintained by an unrelated employer or after termination from our client's employment.

Returning to and expanding on my original question, if in running our 2015 ADP test we determine that he needs to get a $6,000 refund, can we reduce his refund by his $6,000 catch-up amount?

Catch-up eligible HCE terminates employment in 2015 after making $18,000 of 401k deferrals. We believe employee has taken another job and is making 401k contributions to the new employer's plan. When we run 2015 ADP test can we reduce the corrective refund by the catch-up amount?

So what's your recommendation for a borderline ALE that is under a weekly pay period and only has hours of service information on a weekly basis?

Agree that the Regs don't specifically permit this methodology for determining ALEs but what are you going to do when you have weekly payroll periods and no possible way to determine hours on a calendar monthly basis? I have no problem advising clients to use this as a "best efforts" approach using 150 hours as the FT determination and 138 hours as the FTE divisor in the 5 week months and 120 hours and 111 hours in the 4 week months.

For those concerned about taking proactive steps to avoid falling into plan audit how about this argument: Plan audit fees are a plan expense that can be allocated to participants (say $100/each). Plan fiduciaries have a duty to minimize plan expenses. Therefore it would be a fiduciary violation to not explore all legal avenues to avoid incurring the expense.

Would switching from the non-elective to the match safe harbor solve the problem or are they concerned about the NHCEs suddening deferring? If they insist on dropping safe harbor how about using prior year testing and proactively limiting HCE deferral rates to avoid/eliminate refunds?

We have a back pay situation extending over 4 years involving a substantial number of employees and substantial dollars. Does anyone have experience or thoughts to add to the comments in this thread?

How about dividing the year into 4 5-week months and 8 4-week months as contemplated by the regulations, will that help? Of course, anyone working at least 1 hour in each week is going to be considered full-time in both the 4-week and 5-week months.

One of the requirements to qualify for the 50-99 mid-size penalty delay to 2016 is maintaining the same level of coverage that was offered on 2/9/2014. What if the mid-size employer was not offering any coverage on 2/9/2014, can they still qualify for the relief or did they have to be offering "something" on the magic date?

Send it now

"One-participant" plans are never subject to Title I irrespective of level of assets. Two weeks ago I helped a client file 1998-2013 5500-EZs under the relief program and all of them reflected over $250K in assets.

Similar questionnaires are still legal in the large group market (and widely used in Virginia) so the insurer can underwrite the group and set the composite rate. The insurer meets the ACA guaranteed issue requirement by not denying coverage to the individuals who indicate medical issues. Small groups (currently up to 50 but going to 100 in 2016 or 2017) are community rated so the questionnaires are irrelevant and essentially "illegal".

I'm under the belief that under these facts the true life insurance proceeds (excess of face over cash value) gets to the death beneficiary income tax free and only the cash value is taxable, sure hope I'm not wrong in that understanding. Fortunately life insurance in DC plans is exceptionally rare compared to 30 years ago.

Yes, proceeds were treated as plan assets. Not understanding the 2nd question, sorry.

Plan owns $200,000 life insurance policy on participant with $50,000 CSV. Participant dies and surviving spouse makes a direct IRA rollover of $50,000 and receives $150,000 cash distribution. Does the plan issue 2 1099-Rs, one for the direct rollover and another for the pure life insurance proceeds? If so what code do we use on the one for $150,000? Many thanks in advance.

FWIW the position advocated by @zbenefits is contrary to 100% of the articles/blogs issued by ERISA attorneys that I've been able to find.

ERISA health plan and SPD. I've located what seems to be a very good product but probably shouldn't be mentioning vendor names (as I mistakenly did in my first post) in the chat group.

There are 6 requirements a 50-99 mid-size employer must meet in order to qualify for ACA transition relief, including not changing its plan year to begin at a later date after 2/9/14. If the employer meets all 6 requirements penalty exposure is delayed a year until the end of the plan year that begins in 2015 (for example, a plan that renews 7/1/2015 would not be subject to penalty until 7/1/2016). The question is what the consequences are if an employer meets the other 5 requirements but changes it's plan year in 2015 (say for example from a 7/1 renewal to a 10/1 renewal). Some commentators contend that the transition relief is blown entirely and the employer is subject to penalty exposure retroactively as of 1/1/2015. Others contend that the relief is still granted for 2015 but penalty exposure begins 1/1/2016 and only the remaining months in the 2015-2016 plan year are "lost". Any opinions on this sticky issue welcome.

No specific transition relief available. Small Employer has no 2015 ACA penalty exposure or 1095-C reporting requirements for the months that it was the employer. Former employees of Small Employer have become employees of Large Employer Subsidiary so unless Subsidiary amends it's current health plan document and contract it will need to offer the new full-time employees coverage under its existing plan pursuant to existing eligibility requirements and I'll presume that the existing coverage is affordable and meets minimum value. So the question I think you're asking is could Subsidiary also adopt and offer the skinny plan previously offered by Small Employer as an alternative to the ACA compliant plan it already offers? No problem from an ACA or ERISA perspective to offering more than 1 plan but I suspect the contract with the carrier handling the compliant plan will not permit a "competing" plan to coexist with it's offering.

Beyond the SunGard and FT William products does anyone know of a system they would recommend?

Under the QACA rules you can set the "minimum required contribution" at 10% and not permit election of a lower deferral %

Anything legally (forget morally) wrong with this 401k plan design: Automatic deferral contribution rate of 10% with enhanced QACA safe harbor match of 100% on first 3.5%. Expectation is that 10% will be unacceptable to most NHCEs and they'll waive. Colleague is arguing that the minimum deferral rate has to be "reasonable under the circumstances" but I can't find any such subjective requirement.

Does the transplant policy insure the employer/plan sponsor against catastrophic claims not covered by the general stop loss policy (likely) or does it insure the individual employee/participants (unlikely)? If the likely former result then it's just like the stop loss and not reportable on Schedule A.

1. No, purchase of access to a network is not insurance 2. No, check General Assets