Flyboyjohn

After enactment of the ACA much has been written about the DOL 's supposed focus on investigating health plans for ACA, HIPPA and other compliance and there has been anecdotal evidence of a few investigations but is it really a DOL priority? Anybody have experience with any such investigations and if so what DOL Regional Office? Thanks

ACA does not require any employer of any size to offer health insurance to any employee. ACA says if the employer is large enough (ALE) it may want to offer coverage to certain full-time employees to avoid penalties (ESRP). Since this employer is not an ALE they don't have to offer coverage to any employee and can certainly choose to exclude certain employees if they voluntarily offer coverage to others.

Financial adviser shouldn't be sticking his nose into plan design issues unless he can cite specific reasons/examples of why creating another plan is better. I would stick with your original approach UNLESS the plan is currently subject to annual audit (possibly due to former employee balances) and establishing a new plan would not create a 2nd audited plan and might eventually get the first plan out of audit as the participant count decreases. If you do establish a 2nd plan why not go with a 401(k)?

Yes this can all be corrected with EGTRRA & PPA restatements (no interims needed) in one VCP filing. Don't know if IRS will balk at the absence of the GUST letter but if you still have your GUST document package why not add a GUST restatement to the submission?

Agree with Madison71 that the CPA auditing the plan for the past several years has some explaining to do.

Wanted to add that what you're calling the PPA restatement is actually the first ever adoption of a 403(b) plan document that carries an IRS pre-approval so I would agree with Carol that adoption of a pre-approved plan document to replace the existing "good faith" document prior to termination is a necessity.

The recent TIGTA report on the ESRP process contained some interesting stats: for 2015 434,507 Forms 1094-C were filed (120 million 1095-Cs) and IRS data-match indicates $4.37 billion of ESRP to be assessed for 2015 alone. I have to doubt the $4.37B figure because like Ryan the 10 responses I've handled have all resulted in complete abatement.

Are there circumstances where the ER offers affordable, minimum value coverage but the EE can still qualify for a Marketplace subsidy (premium tax credit? Stated differently, is the definition of what's affordable for purposes of the employer mandate exactly the same as the definition used for purposes of PTC qualification? We've encountered situations where subsidies have been awarded despite our submission of proof that the employee declined an offer of coverage that met an affordability safe harbor.

The concept of continuing qualification of "frozen" plans without the necessity of recurring contributions is widely recognized, it's even a "check box" in our PPA pre-approved plan document.

Do it the same way you do with 401(k)s or better yet get them to change to 401(k) where they can impose an eligibility waiting period and probably continue to be under the audit threshold with just 1 plan.

So I think we're in agreement: 1. If <100 participants no 5500 for "real" group health plan or FSA so long as "real" plan is fully insured or general assets (no trust). 2. If 100+ participants and have "real" group health plan file 5500, indicate code 4A and check "General Assets" (if not already applicable to "real" plan). Checking General Assets covers the FSA to the extent you believe it's reportable. Only place we disagree is if 100+ participants, no "real" group health plan but somehow you have an FSA for excepted benefits do you have to file 5500? I say NO but sounds like you may disagree.

I continue to contend that an FSA is not a "welfare benefit plan" but just a payroll practice or tax gimmick authorized by IRC section 125. Alternatively it would be a "voluntary" benefit exempt from ERISA where the employer simply provides the pre-tax deduction and tax-free reimbursement of claims. I don't think there's a 5500 code that would be applicable if you decided to file. If you're nervous how about checking the "general assets" box on the 5500 you're filing for the group health plan which would allow you to argue that covers the FSA. I think others on BenefitsLink disagree.

VFCP is the way to go. Quick, easy, no filing fee, get forgiveness of fiduciary breach and PTE all in one package. Of course this assumes dentist can beg, borrow or has the cash to purchase the real estate from the plan. Given the lack of marketability suspect the purchase price will be original cost plus lost earnings using DOL calculator.

Yes, sort of. When employer failed to respond to letter 226J (the 30 day letter) IRS issued letter 5040J offering a second opportunity to respond, this time within 15 days. So I believe you get two invitations to respond before they assess the ESRP.

I'd look at the number he's putting on his Schedule SE (earned income for self-employment tax purposes)

Larry, no slight intended and understand and acknowledge your guru status as well as Mike, Tom and others on this message board. And the fact that one guru might feel a position is a little too aggressive for his taste is also very understandable and all comments deeply appreciated.

Very helpful and informative, comments much appreciated thanks.

More employers are finally trying to comply with the ERISA plan document and SPD requirements for their welfare benefit plans. I've encountered several law firms that are preparing a single document that they represent is BOTH the ERISA welfare plan document and Summary Plan Description (maybe the law firms are using the same 3rd party welfare document vendor?). Seems to me this approach is fundamentally flawed, that ERISA requires they be 2 separate documents with different purposes. In the qualified plan arena I can't imagine trying to use the plan document as the SPD or vice versa. Interested in what others think of this approach.

FWIW I had the opportunity to talk to a well known "guru" in these matters and he agrees with MP & LS that this structure is acceptable, no second amendment is required and he goes so far as to write into the plan eligibility provisions that, for example, "non-owner physicians" (or whatever class of favored employees) are immediately eligible upon hire but less favored employees are subject to a typical eligibility waiting period. Happy to learn about a creative plan design but sad that it came at the tail end of my career.

Calendar year plan eligiblility 1 YOS, dual entry. Hire new non-owner today who will earn $1M in 2018 comp. (not HCE for 2018 but will be HCE for 2019). Can we safely amend plan to allow early entry for deferrals and employer contributions for 2018 without any discrimination issues since NHCE for 2018? Would we need to again amend to exclude this employee during the first half of 2019 (period prior to “normal” 7/1/2019 entry) to avoid discrimination issues?

Good news is we only need refunds based on RMDs for 2014-2016 so if we file amended returns by 4/15/18 refunds should be within the SOL.

Comfortable with our knowledge and expertise and also that this is the best result for the taxpayer under the circumstances, but no prior experience with this exact scenario led to seeking comfort that there's not something else we're overlooking.

Based on amount of underreported income for 2011 definitely looking at the 6 year SOL and also concerned about potential fraud if taxpayer never reported the taxation of the IRA assets.

The owner of an IRA engaged in a PT in 2011. We know the consequence is all assets in the IRA are treated as having been distributed to the owner at their 1/1/2011 value and the account is no longer an IRA as of that date. We're planning on filing amended individual income tax returns for 2011 and forward and reporting the deemed distribution on the 2011 return (fortunately the owner was over 59 1/2). We'll also report all investment income/expenses and realized gains/losses in the account as adjustments on the amended individual returns along with backing out the RMDs. We're assuming the investment holding period for purposes of determining whether realized gains/losses are short or long term started at the 1/1/2011 deemed distribution date. Does this sound like the correct reporting? Does the IRA custodian have to file amended 1099-Rs and Forms 5498? Anything in the way of other disclosures/reporting that we should be concerned about? Thanks

This old thread seems to conclude that obtaining Protected Health Information when processing hardship withdrawal requests for medical expenses should not invoke HIPPA since the employer and TPA are not "covered entities". Wondering if anybody feels differently? What if the employer/plan sponsor is a hospital or medical practice?