Benefits Vet

@Brian Gilmore did you start a new thread? I did not see it anywhere.

Client maintains two companies, one is a professional service corporation (the "PC"); the other provides management, back office and other services to the PC (the "MC"). MC only provides services to the PC, no other clients. There is no cross ownership between the two companies, just a management services agreement. MC and PC want combine their employees for purposes of medical plan coverage. Is it a MEWA? Does the answer depend on whether they qualify as a management group under Code 414(m)? I found an old opinion letter that says that whether they are a management group or ASG is not determinative as to whether they can be treated as a single employer for purposes of determining if a MEWA exists, but that doesn't give me much comfort.

Follow Up Note: Publication 502 defines a "prescribed drug" as "one that requires a prescription by a doctor for its use by an individual." It seems like the flavoring could fit under here, as it is only available as part of a prescription.

The pharmacist usually adds it to specific types of liquid medications for children. Amoxicillin is a good example. It makes the medicine much more palatable and easier to get the kids to take them. Sometimes, the pharmacist will ask the parent what flavor to add (in other words, the pharmacist knows that it is a particularly yucky medicine); other times the parent can just ask for it. I do not know if the cost gets itemized separately on a receipt or if they just add it to the cost of the medicine so that there is one total. My guess is that you will find pharmacies that do it both ways. While there is no specific therapeutic benefit to the flavor, there is also no use other than for prescription medication (unlike the leevena's whiskey example).

The discussion was only about flavorings that are added by the pharmacist, but they are usually not "prescribed" by a doctor. Thanks.

A TPA told an employer that charges for flavorings added to Rx medicines (usually for kids) are not reimbursable under an FSA. Has there been any IRS guidance on this issue? I can't find any. TIA.

There are other trustees- but each participant is a limited trustee with respect to their own account. Thanks for all the help!! I agree that the the best/only option is for the employer to set up an account on her behalf.

I have a plan sponsor with an unusual money purchase plan. The participant's can set up their own brokerage accounts to receive contributions from the plan sponsor. Each participant is the trustee of their own account. An employee who is eligible to receive the next quarterly contribution is leaving the employer to live in Europe before the contribution is made. Long story short, she cannot open a brokerage account and just "does not want" the contribution. Thoughts about how to resolve this? I don't think that the employer can just not make the contribution.

Client is buying a company in a stock deal. Buyer has a safe harbor plan (matching) plus a non-safe harbor profit sharing contribution. Seller has a 401(k) provides a match but is not safe harbor. Buyer wants to use 410(b)(6)(C) (which the plans meet the requirements of) to delay merging the plans at close. Buyer wants to just run both plans for some time within the transition period. QUESTION: During the 410(b)(6)(C) transition period, can you maintain the safe harbor status of Buyer's plan, as long as you separately test the Seller's plan?

Controlled group situation- the entity within the control group that sponsors the retirement plan is being sold. Client wants to "transfer" the sponsorship of the plan to one of the remaining entities within the group. How would we handle the change in the EIN of the sponsor of the Plan when filing the 5500?

Did you just submit the 8950 and 14568, or did you also include one of the schedules? I have a similar issue and I don't see how any of the schedules apply.

Yes. 3% QNEC

Can a plan adopt an 11(g) amendment to fix a discriminatory definition of compensation? The plan excluded bonuses, and it does not contain a fail safe provision to automatically include bonuses when necessary to pass testing. TIA

In the scope of a VCP filing, we are including some non-amender failures for the last two restatements. Has anyone had the experience of the IRS asking the plan to produce documents prior to the ones included in the VCP filing? Is there a rule that an employer must retain a copy of each and every restatement and amendment? ERISA Section 209 says that the employer must "maintain records with respect to each of his employees sufficient to determine the benefits due or which may become due to such employees. " For a profit sharing plan that only provides discretionary employer contributions, should we assume that the IRS can expect the employer to maintain a copy of each plan document that was in effect when any current employee participated in the Plan? (And it is a long story as to why we would not just include all missing documents in the filing.)

Schedule H to the Form 14568 requires an explanation as to why the IRS should waive penalties under 4974 in the case of an employee-owner who failed to take RMDs on schedule. What are the circumstances that would qualify here? I am not sure why you need an explanation specifically for an employee owner and not anyone who doesn't take an RMD. Thanks.

Not yet. But, I have found out that the IRS position is that they only go back three years so 2018 should be the only year for which there will be liability.

Let's say a company that qualifies as an ALE simply did not provide health insurance to all FTEs from 2015-2018. Just didn't do it. Company just received ESRP assessment (total $ in the low 6 figures) for 2018. We are assuming that the IRS will look at prior years. If IRS assesses similar penalties for those years, it will put the client out of business. Will the IRS negotiate the amount of the penalty when the issue is NOT whether it was calculated correctly? Any thoughts on talking to IRS to get a settlement for all years of liability and not just 2018? Any other ideas or tips? Thanks!!!

Is there any reason that a former owner and/or his family members cannot continue to act as ESOP trustee as long as the new owner approves?

If an employer terminates a phantom stock arrangement before any triggering payout events and no payments are made as a result of the termination, is the employer still subject to the 3-year prohibition on adopting a new plan of a similar type under 1.409A-3(j)(4)(ix)(C)(5)? Thanks!

I am currently looking at this same issue and was thinking the same thing as you thought. Any further insights?

Plan document.

Yes but they were not very helpful. You would be surprised about how it is formatted. The options just do not match up the way you would expect.

Any tips on how to enter the definitions of statutory and plan compensation where the statutory definition is 415 compensation and the plan comp definition is gross comp on the W-2?

I have a DC plan terminating at end of its current fiscal year in June 2021. Any thoughts as to whether it needs to be restated before terminating? I am thinking that it may need to be.

Thanks! I had the same thoughts.