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Message Boards Digest

August 30, 2019

Here are the most recently added topics on the BenefitsLink Message Boards:

pmacduff created a topic in 401(k) Plans

Safe Harbor Top Heavy Pass in This Situation?

We know that a safe harbor 401(k) that "consists of solely a cash or deferred arrangement and matching contributions that satisfy the safe harbors of 401(k)(12)/(13) and 401(m)(11)/(12)" gets a pass on the top heavy requirement. I'm sure I'm overthinking, but if I have a plan with employee deferrals and SH match basic formula, then an additional 100% vested ER match of 25% up to 4%, I still get the TH free ride, right?

Number of replies posted  0 replies      Number of times viewed  46 views      Add Reply

401kchallenged created a topic in 401(k) Plans

Deemed 401(k) Loan Limits My Ability to Take Future Loans?

I had a loan deemed distributed from my 401K account about 6 years ago due to my employer's error in making the necessary payments from my paychecks. I tried every which way to have them fix this and was told there was no way to fix it, so I paid the penalty and taxes on it back then. I didn't realize, of course, that this would stay on my account FOREVER (until I retired, etc.) and would limit any other loans I could take. I now want to do a early partial distribution in the amount of $50,000 (I know about the penalty and taxes because I am not 59-1/2 yet). Will the deemed loan have to be paid out of that early distribution that I take, or, because there will be plenty in the account to cover the loan, can that be done when I turn 59-1/2 and get a full distribution?

Number of replies posted  1 reply      Number of times viewed  42 views      Add Reply

Belgarath created a topic in 401(k) Plans

Post-Severance Compensation

Calendar year plan. Participant terminates employment 12/31/18. Receives final paycheck - just normal wages only - on 1/4/19. Plan uses W-2 compensation, and the determination period is also calendar year. Plan uses the "defaults" for 415 post-severance compensation purposes - that is, normal qualifying post-severance compensation categories are included for 415 purposes, and the plan does NOT utilize the "administrative delay" rule - also commonly referred to as the "first few weeks rule." For PLAN compensation, the plan includes, for all contribution categories, the allowable post-severance compensation categories - regular pay, leave cash-outs, etc.. So, the payment of wages received on 1/4/19 should have deferrals withheld, and the participant should receive a 2019 safe harbor nonelective, and therefore, for a cross-tested plan, also receive gateway. But since 1000 hour/last day, receives no other PS allocation. Participant Included in all other 2019 testing. Am I off my rocker on this?

Number of replies posted  3 replies      Number of times viewed  40 views      Add Reply

Slammed created a topic in Health Plans (Including ACA, COBRA, HIPAA)

Self-Funded Health Plan Question: Husband Has Unpaid $900,000 Claim

My husband had a major medical emergency earlier this year. He was fully covered at the time. I have found out that his company's health plan is self-funded and BCBS is the administrator. Fast forward to several months later, his company abruptly closed, now filling Ch 11. His claims are high-dollar, about $900k and it took BCBS a while to finalized the claims due to the complexity of the claim. BCBS send payment over to the hospital, which they confirmed to me that the payment has posted. Now we're told by his HR that they never funded the account for BCBS to issue payment and the HR is confused on how a payment was made. The BCBS reps told me that they would never send over payment if there were insufficient funds in the account and when they issued the payment, there was sufficient funds in the employer's account. So, my question is, can BCBS ask for that payment back from the hospital and then we will be liable that bill even though he was insured during the time of hospitalization? BTW, the EOB (which I saved) says we owe $0. Or what how do you think this will play out? We are worried sick.

Number of replies posted  2 replies      Number of times viewed  23 views      Add Reply

Brenda Wren created a topic in Employee Stock Ownership Plans (ESOPs)

ESOP Loan Paid Off, Time to Pay Terminated Employees

Ten-year-old ESOP, loan is now paid off. We're planning for 2020 and trying to determine how much to pay the terminees. Plan provides for typical 5 installments for distributions over $5,000 in the year following the year in which the loan is paid off. For example, a participant retired in 2017 with a $100,000 benefit was supposed to begin receiving distributions in 2018, but did not due to the outstanding loan. In 2020, does he receive $60,000 ($20,000 for 2018, 2019 and 2020)? Or does he receive $33,000 (1 of 3 remaining installments due)?

Number of replies posted  0 replies      Number of times viewed  9 views      Add Reply
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