KIP KRAUS

I agree with kchristy. In addition, you may want to check any tax consequences to the employee of the payments outside a qualified plan. Thaey may be taxable income, I'm not sure.

Brian: Even though the IRS allows a dependent parent to be covered it still can be expensive to an employer. If an employer has a fully experienced medical plan I'm sure they could offer such coverage. If the employer has a non-experienced plan, I'm not sure an insurance company would allow such coverage, but if they did I'm sure their rates would be very high. Again, I would suggest you contact several major insurers and pose this question.

BRIAN: I'VE NEVER HEARD OF ANY GROUP PLAN THAT WOULD COVER PARENTS OF EMPLOYEES. I'M NOT SURE WHY AN EMPLOYEER WOULD WANT TO INCREASE ITS RISK BY OFFERING SUCH COVERAGE, AND I DON'T THINK YOU COULD GET AN INSURANCE COMPANY TO UNDERWRITE IT IN ANY EVENT. IN FACT, IT MAY BE PROHIBITED BY THE STATE INSURANCE COMMISSION. THERE ARE A NUMBER OF OTHER REASONS I COULD GO INTO THAT COULD MAKE SUCH AN ARRANGEMENT A BAD BUSINESS DECISION, BUT I DON'T HAVE THE SPACE. ASK AN INSURENCE CARRIER IF THAYE WOULD/COULD DO IT AND I THINK YOU'LL GET SOME EXCELENT INFORMATION.

SOUNDS GOOD TO ME JIMMY D

Thanks Lisa. That's what I was thinking.

I would also be interested in such a site. Good question KCHRISTY. In the meantime, I quess we could post such questions on the Miscellaneous category on this site and see if we get any hits or interest. In fact, I have seen group insurance related questions posted here.

Your Summary Plan Description should explain the reasons for forfeiture of your benefits. Ask for a current SPD.

Di: Did you r plan allow for lump-sum distributions prior to 1/1/98? Did they just amend the plan to allow for lump-sum distributions for employees who terminate/retire on or after 1/1/98. Any changes in benefit options should have been communicated to terminated vesteds. Ask for a copy of the current Summary Plan Description. If that doesn't explain why you can't take a lump-sum, ask for the plan document and any amendments thereto. They may charge you a small copying for for the plan document.

Josh: Don't get confused. FMLA only requires the employer to allow the employee to continued medical/Dental coverage on the same basis as active employees, not totally at the employer's cost. However, if your employer is paying 100% of the active employee's coverage, then an employee on a qualified FMLA leave must have coverage continued at the employer's cost. If there is an employee contribution, then the employee must pay his/her contrubution during FMLA leave.

Lisa Can you give me an example? I know individully owned policies can't be paid through an FSA, but what are you referring to as a non-FSA? John Nelson's original question seemed to me to be related to an individually owned policy.

LCARUSI: Just an observation. If the profit sharing contribution is discretionary, thereby changing from year-to-year, or not given for some years, why would the employer want to increase his costs for one employee? If the employee gets wages instead of PS contribution, fica match goes up and any other expenses related to an employee's salarie(i.e life, STD, LTD premiums etc.). The other thing that accures to me is that other employees similarly situated would also have the option to do the same thing, thereby defeating the purpose of the PS plan. The employer might just as well give profit sharing checks out each year based on years of service rather than have a Plan. It really is becoming a me-me-I society!!!

JPCMPLS: I wish I could get a copy of Rev. Rul. 61-146, because I just read an article by IOMA published in November 97 entitled The 7 Most Common Filing Errors IRS Flex Audits Uncover. In this article they said that one problem with compliance was individual premiums being reimbursed through flexible spending accounts. They sited Regulation 1.125-2 Q&A 7(b)(4) and Revenue Ruling 61-146 saying that such a practice was not permissible. I haven't read either siting yet. .I can't find R. V. 61-146. All of the IRS web sites I go to Don't have R.Vs past 90. Could you suggest a site where I might find it? Or, if you have a copy, maybe you could fax it to me. My fax # is 716-768-5145. Any help would be appreciated so that I can clear this matter up in my mind. Thanks

I am confused, as vicky. Sect. 105 & 106 seem to relate to amounts paid by employers. Section 105 specifically seems to relate to the person income tax deduction for unreimbursed mediical expenses in excess of 7.5% of adjusted gross Income of the individual. In my opinion, a Section 125 is specifically related to an employer's sponsored plans and the option of an employee to choose non-taxable benefits or cash. Clearly, an individual health policy, not sponsored by an employer, is not an option of benefits or cash. I would not allow COBRA or individual health premiums to be reinbursed via a Section 125 plan. Good Luck

You seem to have a unique situation, with the owners being union employees. However, you may want to also check the plan document for the definition of "eligible employee" and "covered earning". For instance,are share holders eligible to participate, and is their compensation eligible? Unless compensation as a share holder is separately idenified and included as eligible earnings in the plan dockment, I'd say you cannot include them in the plan.

gself: I would tghink that the 401(k) Plan Document would be the controlling factor in determining if the employer can do this. My question is, how is the match determined? It sounds to me like more of a profit sharing match, and thus done at the descrition of the employer. However it is determined, I would refer to the Plan Document for details first.

GW What are you asking of the Plan Sponsor? If you feel that your request is legitimate, contact the local Department of Labor and ask them what to do next. Good Luck

Martha: I have had this kind of problem before as a benefits manager. The simple fact is , if you are covered under a typical group LTD plan, the employer is obligated to pay premiums in accordance with the policy provisions and plan rates. Mistakes in reporting the wrong premiums, should be rectified by your employer. In fact, the insurer should insist on it. Most group contracts I've seen allow for the insurer to conduct an audit to see if premiums are being reoported correctly. However, in 20 years I've never had one do that. Most Group Contracts also contain provisions that do not invalidate a person's coverage do to employer error recordkeeping or premium reporting. It sounds like your employer is not willing to back you up on this, which surprises me, because it is a simple solution for them to pay the correct premiums retroactive to the date they first made the error. Also, the insurer should be bound by contract to pay you in accordance with the contract regardless of your employer's error unless you are covered under some contract provisions I've never heard of. If you are working for a small employer, your LTD coverage may not be a true group coverage and thus may have different contract provisions than the ones I've referred to above. In any event, I would look to your employer to correct the error. Without additional information I can't provide any further guidance, and what guidance I have provided may not applicable to your employer's plan. Good Luck.

Pw: Most employers I know will give you the IRS maximum deductible mileage allowance of $.315 per mile if they are not providing a car, and this rate applies to business related travel only.

I agree with everything that QDROphile has said. In addition, most disability plans require you to be totally disabled (as defined by the the insurance contract). Generally, if yoiu are not totally disabled based on the medical evidence submitted by your attending physician, the insurer will deny coverage. If you have followed all of the claim filing procedures, and have been denied benefits, you should follow the claims review procedures in your Summary Plan Description. If these procedures are not outlined in your SPD, file your written request with the Plan Administrator, which may be your employer. If you can, without revealing your particular disability, a discription of why your benefits are being denied may help in providing you with additional information.

Judy: I notice you are located in New York. There used to be a problem finding NYS admitted Stop loss cariers. Unless you are willing to recomend non-admitted cariers to clients, I would check with the NYS Insurance department for admitted cariers. I haven't look for such information, but you may also want to try the NYS Insurance web site at www.ins.state.ny.us/yins.htm Good Luck

The ERISA legal council that I have always dealt with takes the position that a Section 125 Plan is a separate plan requiring a plan document and SPD. I always make mention of the Section 125 Plan pre-tax premiums in our medocal and dental plan SPDs. By the way, the instruction for Form 5500 describe a Section 125 plan as a fringe benefit plan required to file and to attach a Schedule F "Fringe Benefit Plan Annual Information Return. Fringe benefit plan check item 6d of page 1 of the 5500, which instructs you to attach Schedule F. I would happy to share my 125 document information with you if you will e-mail me.

Your right, not only does it not sound right, it isn't right. If an employee enrolls in the Section 125 plan, he/she can only make changes when there is a change in family status or any other change authorized by Section 125. This applies to POPs as well as flexable spending accounts.

Jes: I have no experience with a trust for self-insured medical plans. The self-funded plans I have managed in the past paid benefits from general assets. However, I would be interested in knowing what prompted your company to go from self-insured to fully insured. If you are willing to share this information, I would appreciate it.

Most prototype plans I've seen allow an employer to define what ever classes of employees they wish to include or exclude as long as it is not descriminatory in nature. The main consideration for you, as I see it is, whether or not excluding the co-ops will adversley effect your descriminatory testing. By the way, it is not uncommon to exclude co-ops My last company did, but we did not have a prototype plan. Your other alternative, as aludeed to by LCARUSI, is to limit co-ops to less than 1,000 hours during a calendar year and they wouldn't meet the participation requirements. Which, incidently, as I recall, our co-ops employment periods typically never exceded 1,000 as a matter of course. If you are using co-ops as more of a full-time staff alternative, you should exclude them from eligibility. Hope this helps.

KP I have been envolved in making siginificant plan changes in mid-year with prior employers, and under advice from ERISA legal council, we informed that we could allow employees to make changes at that time. I would ask your insurer where thay are getting their information on not allowing cash in lieu of health benefits. I haven't seen anything regarding this and would be interested my self.