Fully Insured Plan terminates

[SoCalActuary]

We have fully insured plans that are meant to meet the requirements of Reg. 1.412(e)(3) Accrued benefits under such plans (other than top heavy benefits) are determined under Corbel Base Docment 5.2 (a)(4). Policy premiums are typically due on the last day of the year and a 31 day grace period is provided, along with an automatic policy loan to pay past due premiums.

1. If plan benefits are declared frozen in the middle of a plan year, must premiums be paid for that year or can the policies just be converted to a paid up status?

2. When a participant meets plan eligibility requirements but terminates before the end of the year so that a policy has not been purchased, is he entitled to anything other than top heavy benefits?

3. If a participant becomes eligible in 2009 and has a policy purchased @12/31/09 and terminates employment in April 2010, is the premium due 12/31/10 payable? If he has an increase in projected benefits as of 1/1/10, must a new policy be purchased @ 12/31/10?

4. For a standardized prototype plan with 500 hour accrual rules, do I treat the answer differently for participants who have less than 500 hours before the plan termination?

[SoCalActuary]

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