Search the Community

A law office has two partners, and a new associate who is in his late 30s. 3 NHCE staff are in their 20s and 60s. The new associate, who is a go-getter, got a lousy Profit Sharing contribution for 201, and was unable to benefit in the Cash Balance Plan. He is unhappy with this outcome. The partners want to keep him happy. In terms of plan design, could we: Exclude the new associate from the CB plan (he isn't benefiting anyway). Amend the DC plan to exclude the partners, and change from a cross tested allocation to a design based safe harbor, such as an integrated allocation, so that the young associate can get a larger allocation in the DC plan. If we were to do this, must we still combine the plans for 401(a)(4), or is the DC free from that requirement because it isn't subject to 401(a)(4), and the other HCEs aren't benefiting in that plan? In other words, there is no crossover between the two plans where HCEs are concerned, so does this give us some wiggle room for the young associate? By the way, the associate is not Key. Thanks!

Question regarding “Integrated HRAs” for purposes of the exemption from the annual limit restrictions under the ACA: The recent Q&As under the January 24, 2013, FAQs about the Affordable Care Act Implementation (Part XI) that is available on the DOL’s website noted that an HRA is not considered “integrated” with and employer’s primary health coverage unless the HRA is available only to employees who are covered by the primary health plan (i.e., the employee must actually be enrolled in the primary coverage). What is left unsaid is the treatment of coverage for spouses and dependents—i.e., whether an employee must enroll their spouse and/or dependents in the primary health plan to receive reimbursements under the HRA for medical expenses incurred by the spouse and/or dependents. Based on the statement that an employee must actually be enrolled in/covered by the primary coverage for the HRA to be considered “integrated” it would make sense that the same requirements would apply for spouses/dependents, but I have seen no clear guidance on this aspect. If such is the case, employees who select “employee-only” primary coverage could only receive HRA reimbursements for their own medical expenses, not for medical expenses incurred by their spouse and/or dependents. To do otherwise would run the risk that the HRA is not “integrated” because the spouse/dependents could receive HRA benefits (subject to an annual limit) but not primary coverage (which would be unlimited). Has anyone seen any guidance on this? Thanks! Steve

(Pardon the multiple postings of this question, but I couldn't determine which forum it best fit under.) Question regarding “Integrated HRAs” for purposes of the exemption from the annual limit restrictions under the ACA: The recent Q&As under the January 24, 2013, FAQs about the Affordable Care Act Implementation (Part XI) that is available on the DOL’s website noted that an HRA is not considered “integrated” with and employer’s primary health coverage unless the HRA is available only to employees who are covered by the primary health plan (i.e., the employee must actually be enrolled in the primary coverage). What is left unsaid is the treatment of coverage for spouses and dependents—i.e., whether an employee must enroll their spouse and/or dependents in the primary health plan to receive reimbursements under the HRA for medical expenses incurred by the spouse and/or dependents. Based on the statement that an employee must actually be enrolled in/covered by the primary coverage for the HRA to be considered “integrated” it would make sense that the same requirements would apply for spouses/dependents, but I have seen no clear guidance on this aspect. If such is the case, employees who select “employee-only” primary coverage could only receive HRA reimbursements for their own medical expenses, not for medical expenses incurred by their spouse and/or dependents. To do otherwise would run the risk that the HRA is not “integrated” because the spouse/dependents could receive HRA benefits (subject to an annual limit) but not primary coverage (which would be unlimited). Has anyone seen any guidance on this? Thanks! Steve