J2D2

Funny, when I called the message was that the call has been rescheduled for this Monday.

I'm with Bird. The plan language seems contradictory. On one hand, it says to calculate the match on a pay period basis. This provision, standing alone, shouldn't require any true-up. However, the document goes one (confusing) step further and requires a true-up each quarter. Hopefully, the plan also states the basis for the true-up, as some other posters are noting. Without some further explanation, there should be nothing to true-up, if the plan states that the match is calculated on a pay period basis.

Does the transition relief provided by Rev Proc 2004-22 allow a health FSA, which otherwise meets the limited purpose FSA requirements, to reimburse for prescription drug expenses during 2006?

DOL regulations make it clear that, if a MEWA is created for a temporary period due to a change in control of a business, Form M-1 is not required. The temporary period is limited to the plan year of the change in control and the immediately following plan year. What I infer (correctly or not) from this provision is that the DOL is not concerned with the situation where a MEWA is created for a short time due to a corporate transaction, provided the MEWA "goes away" within the period stated in the regulation. 29 CFR 2520.101-2©(2)(ii)(B). Does anyone have any experience with DOL on this "temporary MEWA" issue? Also, does anyone have any experience with any state regulators on this type of situation?

Tried to log-in to the Planet ERISA site, but their password screen wouldn't let me enter my full password. When I tried to use the "Contact Us" function, I also could not get through. Does anyone know if this site is still active?

I see your point, GBurns. My post was inartfully phrased. What I was trying to get to was the concept that the nondiscrimination rules prohibit distinctions between similarly situated employees based on health factors, but distinctions based on factors other than health should be OK. New (hopefully better) example, Acme Janitorial Services cleans both commercial buildings and schools. Acme provides Benefit Package A to its employees who clean commercial buildings and Benefit Package B to employees who clean schools. In that situation, similarly situated employees receive different benefits based on an employment factor, not a health factor. Wouldn't this pass muster under the HIPAA nondiscrimination rules?

GBurns - Couldn't you give different benefits to different groups of janitors as long as it was not based on a health condition? For example, janitors in school buildings get Benefit Package A and janitors in commercial buildings get Benefit Package B?

Check out the interim final and proposed HIPAA nondiscrimination regulations. Not sure if they address this specific issue, but they should be helpful. The regs. were issued by the IRS, PWBA and HCFA in 2001. The IRS portions are at 26 CFR Part 54; PWBA at 29 CFR Part 2590 and HCFA at 45 CFR Part 146. Happy hunting.

I've always had a soft spot in my heart for both the Red Sox and the Cardinals. However, I'm cheering for the Sox this time just so we don't have to hear about The Curse any longer. Maybe then, the sympathies of the Nation (outside of NYC, anyways) will shift to another deserving team, the long-suffering Cleveland Indians.

Thanks, GBurns. That follows my thinking that the COB provision is not, itself, a benefit, rather it is a method of prioritizing payments when the same benefit or expense is covered by more than one plan. Any other thoughts? Has anyone had occasion to address this with the IRS? Thanks.

Employer sponsors a self-insured medical reimbursement plan under Code Section 105(h). Coordination of benefits provision states that the plan is primary to an employee's auto insurance coverage. Proposal is to amend the plan to make it secondary to auto insurance effective 1/1/05 for all new hires. Effective 1/1/06, the plan will be amended to make it secondary to auto insurance for all other participants. Concern is that for 2005 this proposal would create a discriminatory benefit under Section 105(h)(2)(B). Has anyone ever looked at whether a coordination of benefits provision of a self-insured medical reimbursement plan is a "benefit" under 105(h)?

Employer and employee enter into a split-dollar arrangement which provides that employer will pay full premiums on life insurance policy owned by employee for 14 years (through 2002). Collateral assignment provides that, if employee terminates or dies before end of 2002, employer will receive the lesser of premiums it has paid or, if less, the cash surrender value of the policy. SDA and collateral assignment provide that, after 2002, employer has no interest in cash value or policy or any right to return of premiums paid. Employee has not yet died or terminated employment. I am not aware of any formal action taken to terminate the SDA or collateral assignment. By its terms, the SDA is no longer effective; as of 1/1/2003 the entire interest in the policy is held by the employee. Do you think that this situation qualifies as a "termination" of the split dollar arrangement prior to 1/1/2004, as provided in Section IV.4 of IR Notice 2002-8?

I believe that this situation qualifies for the employment records exception. As you describe it, the information is kept sealed in the personnel file and is not created or received by a group health plan. Since the employer is not a covered entity, information that it creates for use its own use should qualify for the exception.

Has anyone looked into the issue of whether the PBGC can reach the assets of a foreign subsidiary to satisfy the liability of the U.S. contributing sponsor of a single employer DBP that is terminating? I have not yet found anything that limits the PBGC's reach to U.S. based controlled group members. I'd appreciate any thoughts and/or cites. Thanks.

I've seen it and may have a copy tucked away in my files somewhere. I'll try to dig it out. Don't remember where it came from or who drafted it.

I've always assumed (and you remember what our teachers said about that!) that a profit sharing plan could not require a participant to complete more than 1,000 hours in order to receive an allocation of the employer contribution. However, the only 1,000 hour reference that I can find is in the safe harbor provisions under 1.401(a)(4)-2(b)(3). Is the assumption I've been operating under lo' these many years the ERISA version of an urban legend? Can a profit sharing plan require more than 1,000 hours, so long as it passes the general test? Thanks for any citations you can provide!

I agree with the previous responses. Maybe I'm too hung-up on semantics, but the taxpayer here is not "deducting" anything; she is simply reporting the Box 1 (?) amount shown on her W-2 which is net of the pre-tax deferral into the FSA. It would be interesting to know how the tax advisor proposes to report the $300 that is being added-back to her income, since that amount hasn't been reported anywhere, by anyone.

That's definitely a concern, tintree73. It's also the reason that I advise employers who contribute to multiemployer plans to request the info they need to estimate their own withdrawal liabilty each year. Making the request each year avoids raising red flags and also allows the employer to keep a handle on the potential liability.

Anyone? Buehler . . . Buehler? Just trying to keep this query alive. Seems that the threshold issue in determining whether we have a "B Org" affiliated service group is whether one organization is "performing services" for another. Haven't been able to find anything helpful on whether an agency that sells an insurer's "products" is considered to be performing services for the insurer. Does anyone have any insights? Buehler . . . Buehler? Thanks.

Doesn't whatever protection is afforded by 404© flow to the investment fiduciary, not the participant?

Performing an affiliated service group analysis. Has anyone looked into the issue of whether an insurance agency is considered to be "performing services" for an insurance company whose policies it sells? Assume that there is no cross- or overlapping ownership between the agency and the insurance company. Thanks.

I'm struggling with a similar issue, jenniferf. In my situation, I seem headed toward the conclusion that the bona fide wellness program should be a part of the existing group health plan. The DOL proposed regs. under ERISA 702 and the corresponding IRS proposed regs under IRC 9802 hint at this conclusion, but are not definitive. If the bona fide wellness program is not a stand-alone plan, then you would simply include it in the reporting for the group health plan that it is attached to. Have you come to any conclusions since your initital post?

Has anyone looked at the issue of whether PHI may be disclosed to the sponsor's independent auditor for FAS 106 purposes? My initial though is that this disclosure of PHI is not covered by any of the exemptions and would not be permitted under the HIPAA privacy rules. Also, not being an auditor, I don't know why summary or de-identified health information would not be sufficient for this purpose. Any thoughts?

Following on the concerns raised by mbozek - Was the profit sharing contribution included on any participant statements? If it was, have any participants received distributions that included the phantom contribution?

Does anyone know the status of the COBRA notice regs that EBSA proposed last May? When first published, it seemed that EBSA had them on a fast track, but I don't recall seeing any discussion of the proposals for quite some time. Thanks.