Flyboyjohn

I think this makes the EAP an ERISA welfare benefit plan subject to 5500 reporting, since unfunded just the 5500 itself without any schedules

If it's an "employee-pay-all" program (employer doesn't "sponsor" or pay any portion of the cost and simply accomodates the after-tax payroll deduction of premiums) then it's not an employee welfare benefit "plan" subject to ERISA and no 5500 is needed. If the employer is "involved" (pays any part of the cost) then it's an ERISA plan. Think of it the way you'd look at a non-ERISA 403(b) plan.

There are many helpful posts to this forum regarding how to handle "very" late amenders (my situation goes back to 1998 and no documents can be located). Suggestions have included a single VCP submission with the TRA, GUST and EGTRRA documents. I'm wondering if anyone can report their success or any problems with such an approach.

Despite the IRS "no mid-year termination" stance you can't get blood out of the turnip so I would tell them to consult qualified counsel (assuming they have enough blood to pay counsel)as to what steps to take to blow up the SIMPLE "retroactively". Under no circumstances should they permit employees to continue to defer for the rest of the year.

The point I'm making is your regular debits and credits CPA may not have experience with qualified plan audits and accordingly may take the engagement out of a sense of loyalty or trying to protect his turf and might do a poor job or charge for a lot of learning time. I find too many companies don't appreciate the specialized nature of plan audits.

And to be clear they will still need 2 audits (for full year 2014 and short year 2015) but will be able to delay the timing of the audits to occur simultaneously and be attached to the 2015 final 5500. In our experience doing 2 audits at the same time doesn't materially reduce the fees (no "2 for 1" special deal) but perhaps your client can successfully negotiate a discount with their CPA. You might also recommend they put the plan audit enagagement out to bid and not blindly accept whatever the current CPA quotes.

I think you could if you kept everything the same but wouldn't it be easier/better to make the effective date the start of the next plan year? And remember that if you have any forfeitures you've been applying against the safe harbor contributions you have to stop that now prohibited practice effective for the year after you SIGN the PPA restatement so you may want to wait and SIGN until at least 2015 (or possibly early 2016) if you've got the forfeiture issue.

Only wiggle room I see is not making the EPCRS corrective contributions and taking your chances. I guess you could try an anonymous VCP application and try the "it's the employees' fault" argument but I wouldn't give it much hope. Fortunately they're not subject to CPA audit or the auditor would most likely "force" them to make the corrective contributions.

Self-insured plan is looking for someone to "audit" their large claims, anyone know of a company that specializes in this type of work?

I think under the latest rules the HRA has to be integrated with the employer's group health plan and "other" health insurance doesn't qualify

Unless there's a trust (hopefully not) the self-funded health plan has no assets, is being funded from general assets of the employer/plan sponsor and accordingly files only the Form 5500 without any attached schedules.

Until you mentioned it I would have said 65 but now I'm gonna do 62 so I can force out terms, good idea

Don't do anything now. When they re-up for 2015 in late 2014 by giving the Model Notice and copy of the SIMPLE document to eligible employees leave the eligibility as it is now ($5,000 in 1 prior year). The employees hired in 2015 will never see this notice. When they re-up for 2016 change the eligibility to $5,000 in 2 prior years and you've effectively imposed the 2 year requirement on folks hired in 2015.

I think YES they are participants for audit count purposes, otherwise wouldn't you be contending that your "elgibile but contributing" group would be zero? In essence they're imposing a $200 minimum deferral and not really an "exclusion" from the plan.

We did that and the auditor is questioning whether they were backdated

We have an IRS auditor who's blustering about disqualifying the plan under examination and suggesting audit cap. We refuse to acknowledge any disqualifying defect and want to call his bluff. Is my understading correct that a disqualification is extremely rare and involves mountains of additional paperwork and levels of review within the Service? Can we go into audit cap without admitting that there's a defect in order to get a fresh set of eyes on the situation? Thanks

FWIW we had one approved where we submitted just the GUST and EGTRRA Adoption Agreements, Basic Plan Documents and Opinion Letters (did not submit all the interim amendments before and after the EGTRRA restatement). Long way of saying I'm not sure the interim amendments are required.

Plan is under routine IRS audit for 2012. Plan enjoys a favorable DL issued in May 2012. Auditor is challenging timely adoption of the PPA interim amendment which was approved in the DL. Isn't the auditor precluded from challenging plan document qualification? Isn't that the whole purpose of obtaining the DL? Anything we can point to (other than the reliance language in the DL we can point to? Thanks

Surfing the EFAST2 website came across a 5500 Schedule I (Small Plan) reporting: 3a $900,000 of Parnership/Joint Venture interests 4e $500,000 Fidelity Bond 4k Claiming qualification for audit waiver Since the bond is less than the non-traditional assets doesn't this plan have to have an IQPA audit?

Stupid auditor, good example of a little knowledge being a dangerous thing, absolutely no connection between the two.

Absolutely fine, just adjustments to comp and not an "employer payment plan"

Another possibility is the employer was not offering a group health insurance plan but instead was reimbusing employees for individual premiums on a pre-tax basis and is scared of the $100/day ($36,500/year) per particpant penalty so they want to amend their errant ways.

I've found the answer to my question: even after-tax payment or reimbursement of individual premiums constitutes an "employer payment plan", violates ACA and creates draconian penalties UNLESS the same amount would have been paid in cash compensation.

Sorry, don't know how to share links but search for a Q&A released May 13th using "IRS Employer Health Care Arrangements"

Much has been written with respect to the IRS clarification that pre-tax reimbursement of individual employee health insurance premiums violates ACA and can invoke the $100/day/participant nuclear penalty. I'm concerned that even post-tax reimbursements can be troublesome based on the following sentence in the recent Q&A: An employer payment plan, as the term is used in this notice, generally does not include an arrangement under which an employee may have an after-tax amount applied toward health coverage or take that amount in cash compensation. Consider a scenario where small employer says "I'm dropping group coverage but encouraging all employees to obtain coverage individually so I'm willing to reimburse you (on a taxable basis) up to $500/month if you prove to me you have coverage." If I don't give them the $500 if they don't have coverage haven't I violated the "cash compensation" proviso above and IRS would consider my program an "employer payment plan" subject to penalties?