Message Boards Digest

January 27, 2022

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

PS created a topic in Plan Terminations

Employer Pays Safe Harbor Portion While Participant on Military Leave?

"One of the participants is on a military leave. When he returns, does the plan sponsor need to pay the safe harbor portion? The plan is terminating."

4 replies so far   |    Click Here to Add a Reply

Khatva created a topic in Form 5500

Effect of Plan Document's Definition of 'Effective Date of Plan Termination'

"I am terminating a one-participant DC plan. The plan document requires declaring an effective date of termination in writing with the company holding the trust, then disbursing assets from the trust within a year. If I declare the effective date of termination in February and then the assets are disbursed in April, do I owe two 'final' 5500-EZs (one for the partial year from Jan. through the February effective date of termination, and then one for the partial year from Jan. through April declaring zero assets), or just one 5500-EZ for the short year from Jan. through April? In other words, does 'effective date of termination' per the plan document have any effect on the 5500-EZ filing?"

2 replies so far   |    Click Here to Add a Reply

PS created a topic in Plan Terminations

Successor Plan Treatment Due to Acquisition of Plan Sponsor Coupled with Plan Termination?

"Need clarity on handling distributions involving a successor plan. There was a stock acquisition. Seller's plan did not terminate a day prior to the sale date; the termination date and the sale date were the same date. This leads to a successor plan situation.

The terminating plan has about 26 participants with balances, of which 3 are terminated participants, 2 are retired, and the rest are active participants. There are 2 active participants who have loans.

The acquiring company's counsel has advised the 5 terminated or retired participants that their funds can be distributed but that the reamining participants' accounts should be transferred to the acquiring company's 401k plan.

  1. Since this is a successor plan situation, would this be a transfer or a rollover?
  2. How would the tax record be handled?
  3. Should we simply be transferring the loans to the successor plan, or would that be a rollover to the successor plan?
  4. A final 5500 will be required, correct?"
1 reply so far   |    Click Here to Add a Reply

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

Participant Must Pay Shipping Costs for At-Home COVID-19 Tests?

"Can a plan charge a participant for shipping/handling as part of its direct-to-consumer COVID-19 shipping option and stay within the safe harbor so that it can limit reimbursement to $12 for at-home tests purchased out-of-network? One of the large (perhaps the largest) PBMs is saying that's the case.

To me, that's not within the spirit if not the letter of the current FAQs. I haven't seen any guidance, either in the at-home test realm or even in the pre-COVID-19 general preventative care arena.

Regardless of the answer to the above, can a plan charge (e.g., not reimburse) a participant for the cost of expedited shipping, if the participant requests it? That seems more defensible but I haven't seen any guidance on this either."

1 reply so far   |    Click Here to Add a Reply

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