Message Boards Digest

April 13, 2023

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

kgr12 created a topic in Health Plans (Including ACA, COBRA, HIPAA)

Impact on Coverage Period of a More Generous COBRA Election Period

"If an employer wants to offer an election period more generous than the 60 days that is minimally required, does it impact the end date for the maximum continuation coverage period? Taken to an extreme, if the employer allows an employee to elect continuation coverage up until the end of the maximum coverage period (let's say 18 months in a given case), is it correct to say that the maximum coverage period is still 18 months after the qualifying event, and that while the employer is on the hook for claims arising any time during that 18 month period if an employee so elects, an employee electing on the last day doesn't have any coverage beyond the date of the election? Does anyone see any other impacts lurking in that scenario?"

2 replies so far   |    Click Here to Add a Reply

5500Nerd created a topic in Form 5500

What Do Participating Employers Do if the MEWA Does not File a Form 5500?

"Hello, I have a few clients who are participating employers of H&W MEWAs. The MEWAs hold trusts but for reasons unknown, they are not filing Form 5500s. Do the participating employers file 5500s for themselves, and if yes, do they file as a trust even though they are not the Plan Administrator of a trust but sent funds to a trust?"

No replies yet   |    Click Here to Add a Reply

Belgarath created a topic in 401(k) Plans

'Deemed 125 Compensation'

"Curious as to how many Plans you either service, or see, that use the option to INCLUDE Deemed 125 Compensation. I remember discussing this with a noted ERISA attorney many years ago -- I think it was in regard to restating for PPA -- and to paraphrase what he said, was that if you include it you'll probably live to regret it. Very complicated for clients and TPA's alike. I've seen some old discussions on this, but I wondered how people felt about it now, years later."

No replies yet   |    Click Here to Add a Reply

WCC created a topic in 401(k) Plans

SECURE 2.0: Why Choose Age 73 for RMDs?

"Maybe I should not ask 'why', but here it goes: Is there a reason ages 73 and 75 were chosen for the RMD age? Was it based on:

  • data around life expectancy, such as a specific life expectancy table
  • a specific report that shows employees are working longer and delaying retirement
  • anecdotal evidence
  • balancing act with the budget and those ages just made the 10 year projections workout nicely
  • moving from age 72 to 73 is the easiest change
  • the drafters favorite numbers."
3 replies so far   |    Click Here to Add a Reply

Jakyasar created a topic in SEP, SARSEP and SIMPLE Plans

Simple Plan: Is This Contribution Based on Correct Compensation?

"My employer started a SIMPLE IRA plan for all employees in April of 2022 with the required 3% match. I contributed the maximum of $14,000 over the course of the remainder of the year. My salary is $200,000 per year, so I believe that the 3% should be based on my compensation over the whole year totaling $6,000. My employer's accounting firm only deposited $4,500 as the employer match instead of the $6,000 that would equal 3% of my yearly salary and says that they only owe me 3/4 of the total 3% because the plan only existed for 3/4 of the year. This does not seem to correlate to the IRS language regarding SIMPLE IRAs, which states that the percentage is based on the employees' compensation for the 'entire year', although I cannot find anywhere that says that this language applies even to plans started mid year. What is the correct interpretation?"

1 reply so far   |    Click Here to Add a Reply

DMcGovern created a topic in SEP, SARSEP and SIMPLE Plans

Erroneous 'Contributions' to SIMPLE 401(k)

"Client had a SIMPLE 401(k) plan, with the 3% match. The owner somehow managed to start automatically sending money from her personal checking account to the SIMPLE plan on a monthly basis. Normal contributions were made through the company, no excess from that. No match was made on the personal funds. It started in September 2022 and she discovered the error recently. About $5500 in 2022 and again in 2023. Can this be self-corrected by removing the personal funds with earnings?"

No replies yet   |    Click Here to Add a Reply

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