Lisa Hand

The authorization for qualified group legal services plan elections to go pre-tax terminated June 30, 1992 per Section 120(e) of the IRC.

Joe: In addition to those issues detailed about, the other problem you would run into if you changed to a short plan year as a result of the deductible change would be the appearance you were trying to circumvent this rule, which of course could result in compliance issues.

No

GBurns: The Message Boards are not for direct advertising. That is why there is a Yellow Pages on BenefitsLink, which vendors should support (especially since the Message Boards are a free service). I understand a number of folks have all their contact information and do solicite. If is seems excessive, I try to send a gentle reminder directly to them, not as a general posting. A great number of professionals posting answers are TPAs or consultants and are very sensitive to this issue. The distinction between direct advertising and providing assistance and answers would be best addressed, if the following question is asked, "will the person posting directly benefit from the specific information they are posting?" If the answer is no, such as relating positive comments about a software company you have had good experience with in response to an query about available software, then its fine. If you work for the software company, then you shouldn't post a specific answer to that question or none at all. There have been instances in the past where postings have been removed, because they were direct marketing, not information. Moderator is a volunteer position and as I understand it I am to answer postings if needed (usually great answers are already there), correct errors, and make sure no inappropriate postings remain (things filters do not catch). Thanks for the question and the opportunity to clarify my posting.

Since the Message Boards are not supposed to be for direct advertising or specific marketing responses, the BenefitsLink Yellow Pages would also be a good place to start.

Christine: The only thing I would add to your very complete response is to use the word "suspend" instead of "repeal" since the notices say this is effective while the IRS reviews the procedure and does address how reporting would be handled upon future rulings on the subject. (applicable to plan years after the release of future guidance).

There are several organizations which publish legal guides on cafeteria plans which include all regs, proposed regs ect. Email me and I can let you know about the main one I subscribe to and how to contact them.

Could you please clarify your question. Are you talking about a Section 132 Parking reimbursement plan?

The Plan is required by law (ERISA) to give you a copy of the Plan Documents if you request them. The use of an evergreen clause on the flexible benefits should only be done if clearly indicated during the open enrollment time that the plan has this clause and the participants are given clear indication of this and the opportunity to change. Thus it should have been on your enrollment form and if you have elections last year, and they are using the evergreen clause then they should be the same this year. (EBIA Cafeteria Legal Guide) There is not formal guidance from the IRS on correcting errors, however, the "clear and convincing" evidence of an error along with proper documentation ususally provides the proper paper trail, especially if brought to the plan sponsors attention immediately. Both the TPA and plan sponsor should have something in place to address this. (EBIA Cafeteria Legal Guide and informal comments from Harry Beker, IRS). Taking a deep breath, organize your documentation and maybe going to the EBIA (Employee Benefits Institute of America) web site or calling the new PWBA hotline (numebr listed under Benefits Buzz) might be helpful.

No.

Mike: Please remember that the message boards are for general responses. Many of those who post responses are TPAs. The appropriate place for advertising is the yellow pages. Lisa

Please remember the Message Boards are for general questions and answers only. All Advertising should be done in the Yellow Pages or through one of the many other opportunities BenefitsLink has available.

Evergreen elections are permitted, however, not recommended for FSAs. This function of the Plan does have to be stated in the Plan documents and clearly educated to all eligible employees, otherwise the Plan is not evergreen. Even with evergreen elections, it is still in the best interest of the Plan (employer) to clearly educate employees for each Plan Year. Low FSA participation is normally a sign of inadequate education which can be corrected over time.

If it is a calendar Plan Year thus still on-going, you could also request the participant offset the incorrect reimbursement with valid claims incurred during the Plan Year.

No.

It depends on how the company is structured: corporation, S corp, partnership, PC, LLC, ect. How is the company in question structured?

What do your plan documents say?

The Plan is required to be non-discriminatory, so any option available should be uniformily available to a specific class of employees as opposed to a case by case basis.

Is the Form 5500 for the Section 125 plan a separate filing? If so, all it requires is the Form 5500 and the Schedule F.

E & O coverage is available. We get ours through PPIB, 1-800-705-7742. You want to ask for Shell Simonson. It is not required, but is prudent. Additionally, our larger clients would not be clients without proof of our coverage.

I printed the new 5558 off the IRS web page under Forms and Publications two weeks ago. As long as your have Adobe loaded, form and instructions which include the address print fine.

Like Kip, I am not sure what your vendor is talking about. More information is required for a proper response. Any valid medical expenses usually must be processed through insurance, if they are eligible for insurance, before they are submitted to the medical FSA since it is reimbursement for unreimbursed expenses. But another account which requires submission to the medical FSA before the expense is considered...? Are they suggesting this would be part of your Section 125 Plan? Part of your health plan? Who is putting in the money? Why is it a good idea?

The Plan documents should detail the timeframe for submiting changes.

NO.

You need to get out your copy of the SPD (summary plan description, you should have been given one, it is a requirement of these plans) and if you do not have one, request a copy of the plan documents (you are also entitled to copies of the plan docs). In the enrollment process, you should have been given information on the plan year and its close-out period. The close-out period is the time frame after the plan year in which participants may submit claims, it is usually 90-days from the end of the plan year. Which if the plan was terminated mid-year, would be 90-days from the date the plan was terminated. They should reimburse for valid expenses (up to your annual allocation, not just what was deposited into the acount) which were incurred during your period of participation. You should be able to submit valid claims and if they are denied, there should be an appeal process detailed in the SPD and the plan documents.