Christine Oliver

Hello - My understanding is that if an employer finds ineligible dependents enrolled in health insurance plans as a result of an audit, the employer is not obligated to offer COBRA to those that are removed from coverage. Can the employer choose to extend COBRA to these folks or is that not permissible or creates other compliance issues.

As always, prompt and excellent guidance! Thanks, Brian!

We offered the new maximum DCFSA limit ($7,500), performed the test following our open enrollment period and have one HCE that elected the new maximum $7,500, that needs to be reduced in order to pass the test. My questions are: 1. Since it's possible for us to have another HCE enroll mid-year, am I correct that we have to apply the same reduction to any HCE mid-year enrollees? 2. If yes, how do we determine what the reduced amount should be? 3. Other than exclude HCEs altogether moving forward or setting a low election maximum, is there anything else I'm missing?

Wondering if anyone has thoughts on my April 29th post?

We are a university with a 401(k) Plan. Adjuncts are excluded, however, their hours worked matter for vesting purposes should they become eligible to participate in the plan (Adjunct to full-time faculty or staff). My understanding is that the 401(k) regulations do not expressly allow you to use the ACA calculation for purposes of a 401(k). Is that accurate, and if so, it seems there are no options aside from crediting them with a full equivalency, which is not reasonable. Am I missing something?

If you typically don't have a lot of full-time to part-time status changes, you can also choose not to continue coverage and count them against the 95% coverage threshold, correct? I understand that doing so could cause you to incur an affordability penalty.

Thank you, Brian. This is a brand, new vision plan (never had one before) so we are not offering to current COBRA participants.

Do employers have to offer a new vision plan (effective 1/1/25) to all current COBRA participants or only to those who become COBRA participants following the implementation of this new plan offering?

Thank you, Brian.

Thanks, Chaz, for clarifying my question better than I did!

Thanks, Brian, but just to be clear, I understand that dependents have independent election rights, but I'm asking if they can drop COBRA coverage once elected, mid-year, for any reason.

Can a COBRA participant discontinue coverage for a dependent beneficiary mid-year without a qualifying event and continue their coverage and other dependent beneficiaries. If no, is this specified in the COBRA regulations?

Follow up question. The TPA is reimbursing the plan sponsor for the eligible reimbursement made on the day after the participant's date of employment separation. Based on my review of the IRS guidance, do I understand correctly that this is a sufficient "correction" and we do not have to apply the amount to the participant's taxable wages?

Yeah, not sure about taking that risk. What strikes me is that I can't imagine this is not a problem for plan sponsors and TPAs (i.e., eligible claims reimbursed between separation date and status update in TPA system). I suppose it may go unnoticed. I also can't think of a way to completely prevent it from happening. Thank you for your prompt responses.

Thanks, Brian. I follow and read your excellent compliance articles/blogs, including this particular one, which prompted my concern about the TPA's responses! So, do I understand correctly that unless the cafeteria plan specifically allows for eligible expenses incurred through the end of the month in which the employment separation occurs, these situations are impermissible, and we must include improper reimbursements in the employee's taxable income as doing otherwise could risk IRS disqualification.