A client is decreasing its current auto-enrollment rate from 3% to 1% (too many employees opting out at 3%) and adding auto-escalation to the newly covered ACA employees. Not a QACA or EACA. They want to:

• Bring in all currently not participating (previously opted out) employees and auto-enroll them at the 1% and escalate them by 1% each year, and
• All future entrants would be auto-enrolled at 1% and escalated by 1% each year, and
• All employees currently automatically enrolled at 3% will stay at the 3% rate and will not be automatically escalated.

Are there any issues with having two different sets of covered employees: one for employees prior to the new ACA (that do not escalate and are enrolled at 3%) and one for employees after the new ACA (that are enrolled at 1% and subject to escalation)?

A participant takes a hardship distribution on 1/3/2018. Suspension period goes through 7/3/2018. If participant then takes another hardship 5/3/2018, does the suspension period go through 11/3/2018? The plan has a match provision. Does a new hardship distribution require a new 6 month suspension?

I have a question about taking loans from a 401k. In our plan one can have 2 loans at any one time. The plan references two IRS rules (up to 50% of vested balance or $50k less the excess between highest outstanding loan balances and current outstanding loan balance). I currently have 2 loans and want to pay one of them off and then take out another one. When I check what the estimated amount is that I can take as a new loan, it seems wrong, so I'm wanting to check if it's correct. Here are some figures: Total vested balance = $78,150. Loan 1 current o/s balance = $14,300. Loan 2 current o/s balance = $11,700. Highest o/s balance over the past 12 months = $32,670.

I want to pay back loan 2. The estimated amount it gives me is $17,340 available as a new loan. It gives me this amount if I say that I would pay off loan 1 or both loans too. Is that correct? It seems that it's just reducing the $50k by the highest loan balance not the difference o/s balance and new current o/s balance once I pay one back.

I've not yet found guidance that says this expressly but am assuming if you have a plan with a service-based exclusion for seasonal employees (including the 1 year of service fail safe provisions) but let regular employees in after 6 months of service, a seasonal employee who has been working there for 6 or 7 months and is "hired on" or continues as a regular employee rather than leaving at the end of the season would be eligible to come into the plan right away -- i.e., that you count all service with the employer even if it is during a period when they are not generally in an eligible class.

We have a small business with 10 employees. The business offers health insurance>. So the QSEHRA is not available. Two employees have chosen Medicare instead of the employer health plan. The employer pays 75% of the health insurance premium and employee 25%. The employer wishes to reimburse the Medicare-covered employees 75% of the Medicare premium they incur. There appears to have been a pronouncement in 2015 which allows for this provided certain conditions have been met which they have in this case. So it appears to be allowable. Is this still an allowable benefit? Does there need to be a written plan? If so, I suppose it would be an HRA. Can the HRA only address and cover the Medicare reimbursement issue? I assume the reimbursement would be non-taxable. Comments?

DOL wrote a letter to one of my client (large-audited plan sponsor) to consider applying for the VFC program to formalize the late contribution violation correction. The 2nd half of 2015 and the 1st half of 2016 plan years contribution transmission were late because the plan sponsor switched payroll service company. When the annual account valuation was performed the following year, the late contribution violation was discovered, corrected and reported on the Form 5500. The lost earnings was calculated using DOL calculator and each participant portion of the lost earnings were deposited in to participants' accounts. [1] Does the prohibited transaction exemption 2002-51 in which the deferral deposit is not more than 180 day late applies to the principal? Or does it include the date the lost earning deposit into participants' deferral accounts? [2] Is it permissible to use the VFC program, section 5(e) -- the de minimis exception to amounts less than $20, and not to write a check for former plan participants who were already paid out but allocated lost earnings as small as $0.10 at a later time? [3] How does the plan allocate the excise tax paid to the plan on the lost earnings to fully correct this prohibited transaction? How about the de minimis amount for prior paid plan participants reallocated? Do the excise tax and de minimis amounts sit in the plan suspense account to be reallocated as employer contribution to all current plan participants?