Scott Ruth

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Scott Ruth
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  • You should look into it further, but as I understand the Section 125 rule against retroactivity, the key is the timing of the participant's election with respect to the provision of benefits and the pretax payroll deduction. Thus, if all election…
  • From an ERISA perspective, you do not want the total amount of an employee's severance to exceed twice the employee's compensation for the previous year or the payments to extend beyond 24 months from the date of termination. This will keep you f…
  • Legally, the only beneficiary that could be allowed to roll over a distribution upon the death of a 401(k) plan participant is the participant's spouse, so in this case the answer is "no." As some of the other replies have suggested, there may be w…
  • The proposed regulations did state a proposed effective date of plans years on or after 1/1/2004, but this date has not been finalized. Nevertheless, I agree with Sue that the DOL wants employers to start following the proposed rules ASAP. Doing s…
  • Look for a "comprehensive and integrated" policy. This covers both/either nursing home and home care services up to the policy maximum. Also look for inflation protection provisions to guard against increasing costs. For more info about standard …
  • There are some pretty technical rules you need to be concerned about with these plans, officially known as "nonqualified deferred compensation plans" or "top hat plans." There are firms out there that specialize in these types of plans and I recomm…
  • I agree with Margaret's response. However, in the event it comes to pass, there are issues to be concerned about if you are contributing to two plans for an employee. Most of the time, when a union bargains into a union sponsored plan, they will fr…
  • Cash back for not electing health insurance coverage is taxable, just as any cash the employer pays an employee. In fact, if an employee has the ability to choose between employer provided health coverage (generally a nontaxable benefit) and cash (…
  • It looks like you found the HHS guidelines for the Business Associate Agreement on their website. Unfortunately, there are many methods to accomplish this task. The important thing is that the Agreement contain the core elements listed by HHS. If…
  • Form 5500s are kind of like the tax return for the plan. Because there are no taxes involved, though, it is really just an information return, called the "Annual Report" under ERISA. They are required of most retirement and welfare benefit plans s…
  • If the expense is otherwise valid (a permissible expense incurred before the end of the year), I would tend to think you should pay it. I am surprised that the TPA wouldn't have mail forwarded during this period. In any event, I know you have prob…
  • Under the tax law passed in 2001 (EGTRRA), this "stacking" of a 457(b) plan with other plans became possible. These 457(b) plans are only available to tax-exempt employers.
  • There is no prohibition on this type of arrangement. However, there is a potential for your highly compensated employees to have taxable income if the health plan is either self-insured or premiums are paid pretax through a cafeteria plan. A plan …
  • I can't address whether it is appropriate to terminate this individual in this circumstance under your company leave policy. This is a matter of employment law and may have implications under the ADA and perhaps state law. From a benefits perspe…
  • Many EAPs are ERISA Plans and are subject to COBRA requirements. It depends on the services provided under the program. Those that provide telephone ot other counseling services directly to employees will almost certainly be considered subject to …
  • No. COBRA rights start once the employee is covered under the group health plan.
  • I agree with Jen D's response. Put another way, the EGTRRA catch-up for 2002 is $1,000 over any other limit in the plan. So for example, if your plan limits deferrals to 15% of compensation, and that amount equals only $3,000 for a particular part…
  • Because of the legal technicalities of these types of plans, I don't think it is practical to just copy someone else's plan document. It may not fit your situation. I recommend consulting your benefits attorney or consultant who can tailor the pla…
  • This is the way I have seen this applied. If you think about it, this just puts the parties in the same position as if the divorce occurred just before the employee terminated. The ex-spouse would have gotten 36 months because of the divorce and t…
  • It may qualify. First, the husband's employer's plan must allow him to drop coverage as a result of the increase in cost. If that coverage is offered through a 125 plan, in order to be able to drop the coverage IRS rules require that the cost chan…
  • It depends on how your cafeteria plan is written. Some plans require that an employee make a written election each year before any salary reductions will be taken. Others state that a previous year's election will apply to the following year unles…
  • If the child continues to be a dependent of the employee for federal tax purposes, the answer is yes, the employee may elect to pay COBRA premiums for the child on a pretax basis. However, the plan documents must specifically allow for such an elec…
  • The new tax act (EGTRRA) did not raise the DCRA limits. It did raise the dependent care tax credit beginning in 2003. Both the percentage of expenses limitation (a maximum of 35% dependung on income) and the dollar limitation ($3,000 for one indiv…
  • You will need to consider the IRS nondiscrimination rules if you implement a match for your corporate office only. If there are any highly compensated employees at that location who will be eligible for the match (generally, any 5% owners and any e…
  • Good point. You are right that you cannot pay insurance premiums from a flexible spending account (often called a healthcare reimbursement account) under a cafeteria plan. What you may do, however, is allow an employee to increase the amount of sa…
  • It doesn't sound like you can. Only COBRA premiums being paid for continuation coverage under a health plan sponsored by the same employer can be paid through that employer's cafeteria plan. For a child, this generally will only occur where the ch…
  • I am not aware of the change from a calendar year to a rolling year to determine if you have enough employees to be subject to COBRA. The final regulations issued in 1999 and 2001 say a calendar year. The citation is 26 CFR 54.4980B-2 Q&A-5 (a…
  • Yes, generally the Supreme Court has said that it is irrelevant how benefits are paid (through insurance, from the general assets of the employer, etc.) when determining whether an ERISA plan exists. However, these cases generally deal with situati…
  • Yes, Medicaid, Medicare Part A and Medicare Part B are counted as creditable coverage under HIPAA.
  • Since the benefits are paid by an insurance company, that company will decide when and what benefits it will pay. The problem generally comes when your company's description is more generous to the employee, in which case your company has the risk …