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Message Boards Digest

December 10, 2021

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

Jakyasar created a topic in Retirement Plans in General

Controlled Group Arises Due to Minor Children?

"DC plan sponsored by Company A (an M.D. office). Company A is owned by Dad 75% and Son 25%. They have employees who are covered under the plan.

Company B (a dental office) is owned by Son's wife 100%. This company has 2 employees. Son and wife have minor children.

The two companies have no connection whatsoever. This is in New Jersey.

Do I have controlled group issues? I would not be asking but for the fact that Son owns 100%. Not sure how and if attribution plays a role in here. To complicate matters, they do not want company B in the DC plan. Company B wants to do SEP."

4 replies so far   |    Click Here to Add a Reply

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

Can HRAs Provide Domestic Partner Coverage?

"Do health reimbursement accounts provide domestic partner coverage?

Imagine this not-so-hypothetical situation. An employer sponsors a health plan of the kind people call an 'HRA' or health-reimbursement-arrangement plan. There is no participant contribution. Claims for reimbursement of a medical expense are paid by the employer from its assets. Presume the employer intends the plan to fit Internal Revenue Code Section 105(b) and the Revenue Rulings interpreting Section 105(b) regarding an HRA.

The employer knows same-sex couples have no less right to marry than opposite-sex couples. But the employer, for its own business reasons, wants to provide its HRA benefit regarding the medical expenses of an employee's non-spouse civil union or domestic partner [26 C.F.R. Section 301.7701-18(c)] equally to those of an employee's spouse. The employer wants to provide this even if there is no support for treating an employee's domestic partner as the employee's spouse, dependent, or child.

[1] Do plan document vendors set up providing HRA coverage for a domestic partner as a check-the-box choice?

[2] If it is a document choice, what (if anything) does a vendor explain about the federal tax law implications of providing that the employer will reimburse the medical expenses of an employee's non-spouse?

[3] If an employer provides domestic partner coverage, what methods does it use to add an amount for the value of the coverage, or of the reimbursements, to an employee's wages for W-2 tax-reporting and withholding wage and income taxes?"

1 reply so far   |    Click Here to Add a Reply

401 Chaos created a topic in Nonqualified Deferred Compensation

Top Hat Plan Possibly Included Too Many Non-Top Hat Employees

"Employer established non-qualified deferred compensation plan to permit deferrals of substantial bonus amounts for a wide range of employees. All amounts in the plan were fully vested at all times and generally designed to provide for distribution upon separation from service. No employee salary deferrals ever went into the plan. Of course, there was no trust for the plan.

After several years in existence, former executive with various axes to grind surfaces and says the Top Hat plan doesn't qualify as a Top Hat plan within the meaning of ERISA because it includes non-management and non-HCEs. (Let's assume for this thread that the plan clearly would not qualify as top hat plan and company readily admits this after looking at general guidance.) Former executive threatens to report the company/plan to the regulators if he doesn't get his way on severance and other points.

The plan has had a few participants retire and get benefits under the plan after termination but not many. Most of the participants in the plan are still working and have large accrued balances. While there are definitely some non-top hat participants in the plan, there aren't many and their balances are relatively small. The company believes it could kick them out and deal with them and their accrued benefits outside the plan easily enough if it's needed.

Does the company have any corrective options? Could it somehow kick out the non-top hat folks and deal with them outside the plan, and continue to operate the plan, even if it has been operating without complying with ERISA retirement plan protections that arguably should have been in place?

Does the employer face potential exposure for the fact it was operating such a plan for years without any general attention to minimum coverage and participation rules-- i.e, do other non-participants have any potential claim they should have been covered by plan?"

3 replies so far   |    Click Here to Add a Reply

Bri created a topic in ERPA (Enrolled Retirement Plan Agent)

Passing an Enrolled Actuary Exam Doesn't Count Towards ERPA Renewal?

"So I just heard from the enrollment folks at the IRS that they will not grant any CE towards my ERPA renewal, for studying for (and passing) at least one Enrolled Actuary exam during my 2019-2021 enrollment window. Guess I've got to download some recorded sessions this month. Grrrrr....

How is this not legitimate continuing education? It's not a 'CE program' with an IRS-issued certificate? (If there weren't going to be a delay between my ERPA expiring and being able to apply to the JBEA, I'd just abandon the ERPA credential. EAs get higher ability to represent taxpayers than ERPAs.)"

1 reply so far   |    Click Here to Add a Reply

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