spiritrider

Not that clients always have a rhyme or reason for what they want to do, but what is the client's rational for this desire? I understand that offering or not offering a Roth option is likely an administrative expense. With all due respect to Mike Preston, it seems it is the employer who is the buzzkill here. What is the employer benefit to limiting the employer match on a per employee pre-tax vs. Roth basis? Is there an extra administrative fee for each Roth sub account?

I concur with "hr for me". You should make sure it is received well before 7/30. There is simply no reason to risk being late. You have an additional 45 days to make payment. One thing to keep in mind if you are potentially planning on not electing COBRA during a gap in coverage. The short gap exemption to the Obamacare penalty is two full months. Since most coverages end on the last day of the month and begin on the first day of the month, it ends up being limited to exactly two months.

The election period is 60 days from the later of the date the notice was received or the date of the loss of coverage. Are you sure the coverage ends on 6/1? A more normal end of coverage date would be the last day of a month. The end of the election period should be no earlier that 7/30. Also, I have probably received a half a dozen COBRA notices. They were all received 10 -14 days after the last day of coverage. Never, after separation date. I am not sure if this is a requirement of the law or a convenience of the employer/plan administrator. You should contact your former employer. At a minimum they have calculated the end of the election period incorrectly. Quite possibly someone jumped the gun on sending the notice.

The OP is referring to employee contributions by payroll deduction. I would like to think that a benefits administrator would always do this through a section 125 plan. For that matter I would like to think this would also be true for the employer contributions. I leave the possibility of cheap, lazy employers and/or lazy HR staff.

The above is not likely correct. Retirement plan deferrals are subject to FICA, but HSA deferrals as Section 125 deductions are almost certainly not. These amounts should not be included in W-2 boxes 1, 3, 5. See the Forms W-2/W-3 instructions for Health Savings Accounts page 10.

Notwithstanding the fact that the maximum contribution is net business profit - 1/2 SE tax, there is but one double dip of income that I am aware of. If you make a Roth 401k contribution, that does not reduce the income available for either a traditional IRA or Roth IRA. Also, be aware of the fact that retirement plan contributions deductible on line 28 reduce the availability of that income for the Self-Employed Health Insurance deduction.

Huh? Did you actually read my response? I said a trust can be a beneficiary of an IRA, just not the owner.

Are you sure your terminology is correct. The bank is correct that a trust can not be an owner of an IRA, but it most certainly can be the beneficiary of a properly constructed trust as noted above. So exactly what did you ask the bank to do?

It is my understanding that assets of an an account inherited by a non-spouse beneficiary can only be moved to an inherited IRA by direct trustee-trustee transfer. Any distribution to the beneficiary of such an account would not be rollover eligible and therefore, not subject to to withholding.

Yes, you can still sign up for the HDHP, but you are not an eligible individual for HSA contributions regardless of the source for those contributions. In such a case, you should probably notify your employer that you are an ineligible individual. If the company discovers after the fact that you were never an eligible individual, they can recover the contributions directly from the custodian. They can also choose not to recover the contributions and earnings. In such a case it is an excess contribution which with earnings will be returned to you. The employer should then then include these amounts as gross income and wages on your W-2. Even if you never tell the employer this still an ineligible contribution and should be removed as an excess contribution and excess earnings. These will be taxable income. Generally, the company HSA contribution is part of the mix in determining whether an HDHP/HSA combination compared favorably to other plans offered from the company. So it may not be a wise decision to utilize such a health plan if you are an ineligible individual.

The reason you are not an eligible individual for HSA contributions are related to downesdn's response. When you enroll in an FSA, you are enrolled for the entire plan year. Termination of employment does not change this, because on day one you accrued the entire benefit for the year. The reverse is not true. If you have an HDHP/HSA and mid year change jobs to a company with a LDHP/FSA, you can enroll in the FSA. Your HSA contribution is prorated to the months you had HDHP coverage, but the HSA and funds already there are not affected.

A "solo" 401k plan is really just a 401k plan that because of its nature has different reporting requirements and because of attribution rules even the spouse of an owner is an HCE and therefore no testing is required. The mainstream custodians jumped in with their marketing departments to offer low/no fee plans. This is because of the reduced compliance requirements. As has been pointed out if the participants in the plan are other than the owner and optionally a spouse. The no reporting or 5500-EZ reporting if >= $250K no longer applies and potentially significant administrative/compliance requirements. However, it is certainly possible to have a 401k-lite plan that only allows for direct family members (spouses, children, parents, even grandchildren). While this would have 5500 reporting requirements regardless of plan size, no testing would be required, because of attribution all would be consider HCEs. This would be a plan with minimal administrative requirements. The only mainstream provider I am aware of that offers such a plan is Oppenheimer's Single-K. However, a TPA could certainly offer such a plan with modest fees. Sounds like a marketing opportunity.

INDIVIDUAL Retirement Account -> JOINT owners???

Also, if the OP wishes to do backdoor Roth IRA contributions, having other pre-tax IRA assets are included in the pro-rata calculation. All pre-tax retirements assets in 401ks, clean conversion.

The spouse is also a qualified individual and can open and fund her own HSA. She may qualify and contribute the full family contribution. Even though younger, if her age >= 55 she can also make the catchup contribution. The employee is not eligible to make any contributions including the catchup contribution.

If these are your only IRA assets and your income excludes you from making a Roth IRA contribution, rolling over the SEP IRA to a 401k would enable the backdoor Roth option. For the forum members, do SEP IRAs have the same asset protection that 401ks have under ERISA?

Funds do not have to be deposited before the services are provided. There is no requirement as to the ordering of contributions and distributions for qualified expenses. The IRS has specifically addressed this. Most employers do not make a single contribution, but rather make smaller contributions each pay period. What must happen Is that the HSA account must be "opened" prior to the date the service is provided. Therein lies potential problems. You need to determine the HSA custodian rules on account creation and deposits. In many cases custodians will not open and/or designate deposits as having occurred on 1/1 since their systems will not allow those transactions on a non-business day. One solution is to open the account on the last business day of the previous year and fund on the first business day of the current year. However, the designation of what constitutes an "opened" account is subject to state law. In some states an account is not considered opened until the first deposit occurs. In this case a "test" deposit of <= $1.00 can be made and reversed when the first real deposit is made. I have even seen some cases where they leave the test deposit in. This is almost a standard consideration in HSAs to ensure that the date of account opening is 1/1. You should contact your custodian/trustee to determine how the handle this. This can not be the first time they have heard it. Remember the date of the employer contribution is not critical here. Providers take significant time to bill for services and even if the participant was required to pay on the spot, they can reimburse themselves later.

Ok, but that is a requirement of the plan administrator and not the provider. The administrator can just as easily file a form 5500-SF electronically. The reason I ask this is because Oppenheimer has an offering they call a Single K, that does allow owners, their spouses, parents, children, and grandchildren. They claim they can do this for only $15/year because this plan approved by the IRS requires no anti-discrimination testing. However, other plan providers (Vanguard, Fidelity, etc..) are insistent that only the owner and their spouse may participate.

I use the term owner-only for the many marketing terms (individual 401k, solo 401k, etc...) They are limited to owners and their spouses, with exclusions < one year of service or < 1000 hours. This is my understanding. These are essentially 401k plans subject to all the general rules. They are really marketing/administrative creations that can be offered with no or minimal administrative costs, because there is no anti-discrimination testing required and lower compliance costs. The primary reason for this is that the owners and their spouses are all considered HCEs by virtue of > 5% ownership and attribution rules for the spouse. No non-HCEs no testing required. So my question is this. Why does this not also extend to others under the attribution rules (children, parents, grandparents)? They would also be considered > 5% owners.

All I can say is Wow, just WOW. As a long time lurker. This is my first post. I have used the great collective knowledge of the active participants here to increase my own knowledge. This has allowed me to be active on the retirement plan committees of small companies I have worked for and better understand the issues with my own SEP IRA and then owner-only 401k. I understand that this is a forum intended for professionals helping other professionals. Some other professional forums I have visited (on different topics) are very hostile to non-professionals. This is not one of those forums. Yes, the topics usually discussed are some of the finer points only administrators and TPAs are concerned with. Yet, the forum members seem very willing to help the occasional end user with their concerns. I would hope that the members do not associate kckid with the typical end user, and continue to help that occasional post. Especially, where the poster is receptive to the advice and provides the relevant information asked for. I just want to say thanks to Mike Preston and others here who have sacrificed their valuable time to help other non-professionals.