CuseFan

Agreed, you have to pass coverage and that is the only way. Most plans that still allow the opt out also have provision where sponsor may revoke if necessary to satisfy testing. If person was only NHCE at the time, then such opt out election never should have been accepted at the time.

Agree you should use prior info until current filing is made and reports the change.

Or as Forrest Gump says, ....

I agree, I do not think you can roll a "regular" in-service distribution directly back into the same plan. Also, you have to deal with the 20% w/h, which means coming up with the cash or restoring less. If it's that short term a cash flow concern (and assume plan loan not an option for whatever reasons), then there have to be other short-term borrowing options out there. You could jump through all sorts of hoops - roll to IRA (avoid w/h), take IRA distribution (avoid w/h), use funds, restore funds, roll back into IRA, roll from IRA into plan - a lot of trouble to avoid minimal short-term borrowing costs? Unless there's a risk that the funds might not be restored within two months.

So if you do not count that overlap at year-end, make sure you include any prior year overlap that hit in the beginning of the year. Also, if vacation pay was for the current year then those hours should also be counted for the current year - plan's statutory definition of Hour of Service should be clear on that.

Agree w/Lou, thought that was prohibited a few years back.

Although it "smells funny", no, if you do the amendment when the person is hired or shortly thereafter, by the letter of the law they are NHCE.

My HC guy - got a guy for everything! - says that although the underlying HDPD is an ERISA benefit the HSA is not, it is an individual's account (like an IRA) that is not employer sponsored and therefore he does not think that an employer can mandate employee contributions thereto.

I don't think a resolution is enough - pre-SECURE would you allow a new plan for 2021 with 2021 resolution but 2022 plan adoption date? Also, resolutions can be and do get rescinded all the time before execution of the action items. I do not think a resolution creates a plan and I don't see how you can have a deferral election for a plan that does not yet exist. I would also recommend against.

Agreed, but I would do currently as a planned amendment rather than later as a correction - just my personal preference, which also ensures you changed plan eligibility for this person before they became an HCE if they do subsequently become one.

Interesting question - I Googled and did not see an answer. I know that employers can require mandatory pre-tax employee contributions to their 401(k) or 403(b) plans as a condition of employment, in which case they are not treated as elective deferrals subject to the 402(g) limit but are included in 415 limit, but do not know if there is similar type of provision for HSAs. Asked one of our very knowledgeable healthcare consultants and am waiting on his answer, will post when it comes through.

Then the interim valuation is a non-event for them. Whether there is a legal obligation to provide the statement - I don't know but I think not. However, if there are any other pre-2022 separations who have not requested distributions, I think they need to get statements too.

There may or may not have been a termination of employment but whether the person enters on 7/1 or 8/5 doesn't matter as TH based on full year pay unless considered terminated (again?) before PYE. Employer should make the determination - was person terminated in payroll system, did person's other employment-related benefits stop, was the person offered COBRA? Reductions in hours, working on an as-needed/on-call/per diem basis is generally not a termination, in my opinion. Otherwise, I think you put yourself in position of tracking a string of hire and term dates for each temporary stint, two weeks here, then another week a month later, and so on and dealing with the break-in-service rules - which I have seen done and it wasn't pretty.

You can spin off a plan - that is, split a plan into two or more pieces, regardless of any changes or lack thereof to the sponsoring employer. The new plan, for the division being sold can then be merged into the buyer's plan. However, if those employees are terminated from B, you can distribute according to elections or possibly do a trustee to trustee transfer w/o the administrative hassle of a spin-off merger. Also think about vesting for these employees, which might need coordinated effort/agreement between buyer and seller if full vesting is desired or non-vested balances are to be transferred as well, and then there's the possible partial termination. I'm sure others in this forum who deal with 401(k)s more than I may have further insights.

Assume currently an NHCE. I think you can do, but why amend twice? Why not amend once to say, "notwithstanding, employee X will enter the plan effective MM/DD/CCYY" or something similar, or employees hired on A or between B and C?

Agreed - no aggregation.

What are you trying to accomplish? Did you want one document instead of X or are you/they looking to pool assets that are set aside into a master rabbi trust for lack of a better term, and then put on one platform to administer as one (multiple employer) plan? Assets must remain owned by the sponsoring employer (or rabbi trust) subject to the claims of creditors. If you combine, how do you title assets separately by employer, maybe through participating employee of an employer? But would a custodian be able to handle? I have never seen a master rabbi trust, which might be the solution, but that doesn't mean those can't exist. If participating employers are to gain cost savings and/or other efficiencies, then they can share the cost of getting legal opinion and/or document preparation for such.

Yeah, we had all sorts of discussion on this a week or two ago. So whoever asked "is this going to be a thing now" - I think you have your answer.

Maybe. I guess being able to assign some or all of my QP assets to my spouse (essentially treating as a "household" retirement account rather than an individual account) makes sense conceptually. Looking at the language of 414(p), can this strategy also be used to transfer assets to a child - i.e., here's your inheritance now, before I die, so you can avoid the recent stretch IRA and other SECURE prohibitions/restrictions? As 99% of plan participants are likely needing to take and use their assets to provide for their retirement, this just smells like a loophole for the other 1% to transfer wealth to future generations on a continuing tax deferred basis. Yes, we design plans that skew large contributions to owners (many maybe 1%ers), but those are required to satisfy all sorts of requirements including gateway minimums for rank and file - probably the one area where "trickle down" theory actually works. But if this type of QDRO becomes commonplace, ...... I'd be disappointed, to put it mildly.

Agree this is best (only?) way to accomplish owner's objective. Otherwise, potential THM as Bri notes. Why make eligible for DC and then try a (highly) legally questionable side agreement precluding him from making deferrals? Employee can make an irrevocable election not to participate prior to entry if plan language allows but why? Just amend plans to exclude him. This also makes it easier to later bring him into one or both plans if circumstances change.

Personally, I think this is poor if not incorrect design/completion of AA. Defining a YOS for eligibility has no relevance when a YOS is not a requirement. And you have a further disconnect using hours for eligibility YOS and BIS when eligibility is based on elapsed time. The application of this - someone having to complete a YOS to eligible upon rehire after only having to complete 3 months after initial hire - should be evidence enough that the combination of those provisions is improper and incompatible.

That is always the case. AE/AE is good policy for general retirement preparedness. Mandatory Roth-ing of catch-ups? Revenue raiser for sure. But the logistics on that - especially if you have HCEs who after the fact have regular pre-tax deferrals reclassified as catch-up deferrals, could be a headache for sure. Not to mention the person could then be under withheld on income taxes.

correct

seconded

Asset sale, so the company/plan sponsor continues to exist, just doesn't have any assets (except cash). Unless buy/sell says otherwise, seller still maintains (and has responsibility for) the Plan and it can remain open indefinitely, until the sponsor terminates it.