"These rules are completely insane. What are others using as a practical tool for sorting this all out? There must 15 to 20 pages in the EOB. Has anyone created a user friendly guide to answer the million possibilities?"

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"Section 125 permits election changes (other than in the case of certain HPIAA special enrollment events), including upon divorce, to be effective only on a prospective basis. The Code permits an employee to pay for coverage on a pre-tax basis only for certain specified dependents. An ex-spouse is not not one of these specified dependents. ERISA requires plan fiduciaries to administer a health plan in accordance with its terms. Virtually all plans provide that ex-spouses are not eligible for coverage.

"If an employee notifies the employer on December 1 than he or she was divorced from his or her covered spouse on November 1 (and provides sufficient evidence of such), when can/must the employer remove the spouse from coverage? (Leave COBRA out of the analysis.) If the employer removes the spouse prospectively from December 1, the employer is seemingly complying with Code Section 125 but has it violated its fiduciary obligations under ERISA because it covered the ex-spouse in contradiction with the terms of the plan and must the employee impute income for the payrolls in November in which the employee paid for the ex-spouse's coverage? If the employer removes the spouse retroactively from coverage back to November 1, will it be violating the Section 125 election change rules but be in compliance with ERISA and the other sections of the Code?

"I know that the ACA's rescission rules generally prohibit retroactively terminating coverage except in the case of fraud and intentional misrepresentation. But that means, doesn't it, that the ACA does contemplate rescissions under certain circumstances while the cafeteria plan rules do not. To me, this is an inherent contradiction between these various laws. I'm sure others have recognized this but I have not seen much discussion of it. Any thoughts are appreciated."

"401k plan with ADP Basic SHM provision is amended for 2022 changing to a Triple Stack Match. When the SHM was calculated, the amendment was missed, so only the 1st tier (4% of comp) was calculated and timely deposited. The correction is going to be made this week for the other required tier, but obviously will be deposited after the deadline for 2022 415 purposes. EPCRS Revenue Procedure 2021-30 provides at Section 6 .02 (04)(b) A corrective allocation to a participant's account because of a failure to make a required allocation in a prior limitation year is not considered an annual addition with respect to the participant for the limitation year in which the correction is made, but is considered an annual addition for the limitation year to which the corrective allocation relates. However, the normal rules of Section 404, regarding deductions, apply. Can the Plan rely on this provision when making the deposit for the 2022 plan year before 12/31/2023, or is that provision only going to apply if the correction is made 1/1/2024 or later since 'technically', there isn't an EPCRS correction needed until 1/1/2024?"

"Owner of small plan took an in-service (not hardship) distribution of an in-kind asset. Unfortunately, owner is under 59.5 and this asset is allocated among all money types, including 401k, which is not allowable under 59.5 per my understanding. First off, so this 401k portion really was not able to be distributed, but for now say it was. Because new holder of this non-ordinary asset cannot separate this out between two accounts (taxable account vs non-taxable rollover IRA), the brokerage has recommended rolling it back into the plan. It's after 60 days, so I feel like that's it, it was a distribution, which was partially not allowed. They still want to roll it over and treat it as a correction and correct the 1099-R's. I don't know, trying to figure out a correction."

"During the 2022 plan year, the company made the deductions from payroll, but they were never submitted to the recordkeeper. They were in the process of changing payroll providers. When the contributions were deposited (late) in 2023, 3 participants were over the 402g excess. The plan sponsor is now requesting a distribution of these excess amounts. The accountant is telling the client remove the 402g excess and report/pay penalty on the form 5330. I believe they are confusing the late contribution and needing to file a 5330 for that. Since none of the impacted participants are over 59 1/2, can they distribute the money from the 402g excess? I realize they will be double taxed (2022) and then in year of distribution. If they are allowed to distribute, I believe they are subject to the 10% premature distribution penalty. Can/Should they distribute the money? I am thinking there is no distributable event to permit the distributions, therefore the money stays in the plan."