bveinger

We have a participant who is receiving a Premium Tax Credit. As such, we have suspended his retiree HRA account for the time period he is receiving the PTC. Participant sends in reimbursement request for expenses incurred prior to receiving PTC. Currently, we deny participants from receiving reimbursement because the account is in 'suspension'. Therefore, no activity allowed in HRA period. Participant is claiming that expenses were incurred prior to receiving PTC so they should be eligible for payout even while account is suspended. IRS PTC Q&A states the following: What if the retiree coverage consists of retiree only health reimbursement arrangement (HRA)? If an individual is covered by an HRA, including an individual coverage HRA, for a month, regardless of the amount of reimbursement available under the HRA, the individual is not eligible for the PTC for that month. Looking for clarification on "for that month" - does this mean that only expenses incurred and submitted for reimbursement while receiving PTC 'for that month' are not eligible or does this also include any previously incurred expenses while the account is suspended or frozen? Thanks Betty

Thanks @Peter Gulia Seems consistent with https://www.businessofbenefits.com/2015/01/articles/403b/dealing-with-small-amount-403b-annuities-of-former-participants/ We're trying to understand our distribution options given the small account balances and the beneficiaries non-interest to retrieve funds. Thanks Betty

What are our options for handling low or small balance accounts (between $0.01 and maybe $10) where the participant or family member in death cases does not want the funds. The individual(s) are voluntarily forfeiting the funds. Do we forfeit funds back to employer or do we automatically disburse the small balance (i.e. to the estate). How do we distribute small amounts out of the account (403b, 457 and 401a)?