Flyboyjohn

Thanks, confirms my thinking that large employers need to be a little careful in adopting the new options so they don't shoot themselves in the foot with the "b".

Is owner A the money man and the brains or do the operators have substantail capital invested? Sort of unusual owner A would give up over 50% ownership unless there were some protections if the operator didn't work out (repurchase options, rights of first refusal, etc.), do you know of any such side deals? Call me cynical but I'm smelling an attempt to make the businesses "unrelated" when it's really owner A running the whole show.

Couldn't allowing an employee to change his cafeteria plan election mid-year due to a reduction in hours or for the purpose of going to the Marketplace potentially expose the large employer to the "b" penalty? Imagine an employee whose hours are reduced to the point that the employer coverage is now unaffordable so he'll qualify for subsidies? Or the employee who enrolled in unaffordable employer coverage and now discovers Marketplace subsidies? Would it be too "creative" to only allow mid-year opt outs if the employee agrees to not apply for subsidies?

Correcting the $295 in my original post to $285 Found the answer I was looking for in the Form 8965 instructions: $204/month, $2,448/year cap on the % of excess income penalty calculation

I know that the maximum dollar penalty on any size tax housegold for not having MEC for all months in 2014 is $295 (3 x $95) I also know that the cap on the 1% of excess income side of the penalty calculation is the national average Bronze premium. I know I saw it somewhere but now can't find what that maximum is. Thanks

Good point, I think Federal ADEA kicks in at 20 employees

Not in my humble opinion (the specific trumps the general) but I respect your right to reach a different conclusion.

Don't think so, see the statement in 1625.10(d)(4)(ii)©on contributory plans: "The required contribution of participants may increase with age so long as the PROPORTION of the total premium required to be paid by the participants does not increase with age." If the employer's contribution amount is fixed the proportion of the increasing premium that the employee pays increases with age which is prohibited.

No can do, although now "kissing cousins" 403b and 401k are still fundamentally different and cannot be "merged". You can certainly terminate the 401k and let each participant individually elect to rollover to the 403b but my personal opinion is that you're going in the wrong direction (don't get me started on why 401k is better thanan ERISA 403b).

In the new world of age-based rates for each individual covered by a small group plan does anyone disagree with the proposition that the employer violates ADEA if it says "I'll pay $XXX/month towards your premium and you pay the balance" (a so-called defined contribution approach)? I know that ADEA permits the employer to pay a percentage of the age-based premium, it just prohibits the employer from paying a fixed amount. Thanks

Employee can drop his and/or his child's coverage under the health plan at any time for any reason. I think your question is whether the employee can modify his cafeteria plan election to reduce his pay by the amount of the child's premiums for the entire cafeteria plan year. I recommend checking the cafeteria plan document for what it provides in "qualifying events" for election changes. Hopefully it includes the "change in residence" rule that would definitiely apply to the child.

If the 401k accepts rollovers from IRAs the SIMPLE IRAs can all be rolled when they reach the 2 year mark whether that occurs before or after the date of establishment of the 401k.

The release says that the amendment deadline is the last day of the plan year that begins in 2015 so you've got until 12/31/15 at the earliest to make the formal amendment. The more important question is whether it's advisable to recommend the change to your entire book of business. What if letting someone out of the large employer plan enables the employee to get subsidized Marketplace coverage and causes the employer exposure to the 4980H(b) penalty? I think this could happen for example when the large employer is using the W-2 Box 1 affordability method, the employee's income drops, employer coverage becomes unaffordable and the employee gets a subsidy.

Better yet since they're both NHCEs how about a profit sharing contribution for just them (assuming you have each participant in a separate class) of what the match would have been?

My vote is YES, they are participants until their account balance in fact goes to zero.

This doesn't pass any smell test but I can't find the legal prohibition: Large group health plan has terrible claims history based on 1 particular employee Insurer telling employer "If we don't have to cover the sick employee your group renewal rate increase is only X% but if the sick employee coverage continues the group rate increases by 3X%" Employer obviously wants to exclude the sick employee from coverage (and raise his wages by enough to cover his premiums for Marketplace coverage where his pre-existing conditions don't matter). This has to violate somethng?

No, you're only permitted to withhold what the employee authorized to be withheld on their election form so unless the form (or possibly the plan documents) permit a "doubling up" I don't see how you could do it.

And also DOL Technical Release 88-01. Not the easiest stuff to read but between the 2 they essentially say if you don't have a trust and the employee contributions are pursuant to a 125 cafeteria plan the self-funded plan is considered "unfunded" for 5500 and audit purposes

I would argue that having some $$ on deposit at the TPA does not create a "funded" plan. The $$ either still belongs to the employer or belongs to the TPA but doesn't belong to "the plan". I agree with Chaz that it would be much better to have the claims payment account in the name of the employer and just let the TPA draw against it but I'm not convinced that the current arrangement constitutes a funded plan so I say no H and no audit.

If you're using the IRS Form 5305-SEP I believe it prohibits any other plan in the same year so adopting a 401k I suppose "blows up" the current year SEP contributions, which I guess means adding them to W-2 wages and telling the employees they may have excess IRA contributions that may need to be withdrawn. I haven't looked at the SEP Fixit Guide but probably a good place to start. If you're fortunate enough to have been using a SEP document that permits "other plans" I guess I'd look at that document to see what it says about co-ordination between the 2.

My thought is YES since the TPA will undoubtedly be receiving PHI, but even if there's doubt wouldn't it be prudent to get the BA Agreement in any event to be safe?

Important fact needed to respond: has the employer already made interim SEP contributions for and during 2014? If not, no worries

I'll go out on a limb and assume the question has to do with counting "participants" as of January 1st for purposes of determining whether the 403b plan needs an audit. And whether substitute teachers who are eligible when they work but only work sporadically and may not have worked any in the several months prior to January 1st have to be counted. There's no question that if they have an account balance they're counted but if they've never contributed then what? I suspect the answer is if they haven't been "terminated" in the payroll records then they're still considered active, eligible employees and must be counted. That's not to say I think the employer can game the system by "teminating" all substitutes between working gigs and would suggest the better solution would be to see if they can be excluded under the "less than 20 hours/week" option for 403b deferrals (or better yet change to a 401k and exclude them as a class).

Thanks, the qualified plan would own an interest in the lease of the mineral rights which would generate profits from the sale of the oil pumped out of the ground so most likely UBI.

Hopefully someone from the booming oil production regions knows this without me having to hit the books, thanks