PAiPal

Under ERISA Employee Contributions to a cafeteria plan are plan assets just like 401k deferrals. As plan assets these deferrals need to be held in a Trust. However the DOL has issued a nonenforcement policy of the Trust Requirement in Technical Release 92-01. To take advantage of this nonenforcement policy the employee cafeteria plan contributions should remain in the general assets of the employer. To set them apart in a separate checking account creates the impression of creating a separate fund to pay plan benefits and would lose the nonenforcement exception and require setting up a trust. As a side note, creating a cafeteria plan is more than just a checking account to pay benefits. You need a plan document and the plan must meet nondiscrimination requirements. In many ways it is just like a 401k except you paying health and dependent care claims. Another wrinkle is that these plans are subject to HIPPA, COBRA and the Affordable Care Act.

HSA contribution limits are calculated on a monthly basis for the months of the year the individual was an eligible individual. So, if you lose HSA eligibility due to Medicare coverage on June 1, you have 5 months of HSA eligibility and can contribute 5/12 of the HSA limit.

More than 2% shareholders are treated like partners for the 5500-EZ From PPA: SEC. 1103. REPORTING SIMPLIFICATION. (a) SIMPLIFIED ANNUAL FILING REQUIREMENT FOR OWNERS AND THEIR SPOUSES.— (1) IN GENERAL.—The Secretary of the Treasury shall modify the requirements for filing annual returns with respect to one-participant retirement plans to ensure that such plans with assets of $250,000 or less as of the close of the plan year need not file a return for that year. (2) ONE-PARTICIPANT RETIREMENT PLAN DEFINED.—For purposes of this subsection, the term ‘‘one-participant retirement plan’’ means a retirement plan with respect to which the following requirements are met: (A) on the first day of the plan year— (i) the plan covered only one individual (or the individual and the individual’s spouse) and the individual owned 100 percent of the plan sponsor (whether or not incorporated), or (ii) the plan covered only one or more partners (or partners and their spouses) in the plan sponsor; (B) the plan meets the minimum coverage requirements of section 410(b) of the Internal Revenue Code of 1986 without being combined with any other plan of the business that covers the employees of the business; (C) the plan does not provide benefits to anyone except the individual (and the individual’s spouse) or the partners (and their spouses); (D) the plan does not cover a business that is a member of an affiliated service group, a controlled group of corporations, or a group of businesses under common control; and (E) the plan does not cover a business that uses the services of leased employees (within the meaning of section 414(n) of such Code). For purposes of this paragraph, the term ‘‘partner’’ includes a 2-percent shareholder (as defined in section 1372(b) of such Code) of an S corporation. S

If their primary residence is not in the area affected by the hurricane, they would not be able to get a hardship. They should be able to get a loan unless the plan limits loans only for reasons of hardship. For the hardship you can rely on the representations of the participant. I would think a signed statement stating they need $XX dollars because they have suffered economic loss due to the hurricane is sufficient. For a loan, you should try to get the normal paperwork. The IRS special relief just relaxed the procedural requirements. It did not say they can be ignored. As soon as practicable a good faith effort and reasonable attempt should be made to obtain any missing documentation.

This may be an B-Org situation. You said this other organization is providing "administrative and support services to the doctors". If a significant portion (generally 10% or more) of this organization's income is from performing services for the doctor (the FSO) of type historically performed by employees, you would have an B-Org ASG. Sorry I posted this before ETA's comment on B-Org.

The regulations are not clear on this but as long as you meet the requirements of 72(p)(2) at the time the loan is granted, there is an argument that it could go into immediate suspension. I would document everything in the loan paperwork with the employer agreeing to suspend the payroll loan payments until the participant returns from medical leave (no longer that one year) and the participant acknowledging that interest will accrue on the loan during the medical leave.

Title I of ERISA contains the Fiduciary requirements. Section 4 of ERISA list the plans that are not subject to Title I. ERISA Regulation Section 2510.3-3 clarifies the term "employee benefit plan" by saying a plan that just covers 100% owners, partners and their spouses is a plan without employees and is not covered by Title I. If a plan is not subject to Title I, under these provisions it is not subject to the QDIA requirement under 404

When all else fails, I like to quote Sal: For the year that includes the participant’s death, the minimum distribution is still calculated as if the participant is alive, using the rules described in 1. through 7. above. If the participant did not receive that distribution before his or her death, the distribution is generally made to the beneficiary (or the participant’s estate, if there is no beneficiary).