"S-corp sponsors an ICHRA for employees. It's my understanding that 2% shareholders of S-corp are NOT eligible to participate in ICHRA, even if they have W-2 comp (i.e., they are not treated as 'employees' for fringe benefit purposes). IRC 105(g), Notice 2002-45. Alternatively, I believe medical insurance premiums can just be paid directly by S-corp on behalf of 2% owner. Premiums are deductible by s-corp. Those premiums are exempt from FICA/FUTA if the payments are 'made to or on behalf of an employee under a plan or system that makes provision for all or a class of employees.' I believe this means that FICA/FUTA would not be required withholding on those premiums? Not sure I'm understanding that rule.

"Now assume one of the 2% shareholders is on Medicare and the S-corp will pay those Medicare premiums and put them in that shareholder's W-2.  Are those Medicare premiums subject to FICA/FUTA tax withholding? Or just Federal withholding? Would Medicare fall under the umbrella 'made to or on behalf of an employee under a plan or system that makes provision for all or a class of employees.' Any clarification appreciated!"

"Say you have a DC plan (ERISA 403(b)) covering both non-union and union employees, with a good faith CBA negotiated, etc., etc. Plan, by its terms, requires a fixed employer contribution, NO allocation requirements for a plan year. Employer is in financial difficulties, and union may be willing to renegotiate the CBA to remove or reduce the required employer contribution for 2026. But under the terms of the plan, benefit is already accrued. I think even if union is willing to open up the CBA and renegotiate, they still can't overcome the ERISA anti-cutback requirements -- is there any way around that?"

"Client would like to change the compensation definition to exclude bonus pay (which they pay at year-end) and have not paid for [2026]. The plan is Basic Safe Harbor Match, based on the IRS guidance (2016-16) in part, a mid-year change of the compensation definition for matching contributions is allowable if the definition change is made retroactive for the entire plan year and satisfies notification requirements.

"The types of changes discussed 'The Change in compensation must not be retroactive in a way that would reduce benefits. For example, if the change excludes certain types of compensation (like bonuses), it must be applied consistently to the entire plan year and cannot retroactively affect contributions already made.' per the client they make bonus contributions at the end of year and to date have not made bonus payments in 2025.

"Legal resource states this would be reduction in benefit and if an amendment was made that Safe harbor status would be lost for the year. Thoughts?"