Employee Benefits Bulletin, August 2002
NEW GUIDANCE
- IRS Issues Proposed Regulations Concerning Split-Dollar Life Insurance Arrangements. The proposed regulations are generally consistent with split-dollar treatment in Notice 2002-8 but also add additional requirements. The regulations propose to treat premium payments made under equity split-dollar arrangements (split-dollar life insurance arrangements where the employee owns cash value in the insurance in excess of the premium payments) as loans in instances where the equity split-dollar arrangement was made under the "collateral assignment method." If the arrangement is made under the "endorsement method", the employee will be taxed upon the value of the current life insurance protection provided. The IRS also issued Notice 2002-59 explaining the standards for valuing current life insurance protection under a split-dollar life insurance arrangement.
- IRS Releases List of Master & Prototype and Volume Submitter Plans that have been approved for GUST changes. To check the list, go to www.irs.gov. Under the "Contents" column on the left-hand side of the home page, click on "Retirement Plans." Scroll down to the "Determination Letter Program" section and click on the bullet labeled "Review the list of master and prototype and volume submitter plans."
- DOL Issues a Memorandum Clarifying the Interaction of the FMLA and USERRA. The Uniformed Services Employment and Reemployment Rights Act ("USERRA") entitles returning service members to all the benefits of employment that they would have obtained if they had been continuously employed. Under the Family and Medical Leave Act ("FMLA"), a worker becomes eligible for FMLA leave after working for a covered employer for at least 12 months, during which he or she completed at least 1,250 hours of work. The DOL memo requires employers to count the months and hours that reservists and National Guards would have worked if they had not been called for active duty in order to determine FMLA eligibility.
- DOL Issues Guidance on Correcting Late Deposits Under Voluntary Fiduciary Correction Program ("VFCP"). For a copy of the frequently asked questions and answers provided by the DOL, go to http://www.dol.gov/pwba/faqs/faq_vfcp2.html.
- DOL Announces New Program to Help Small Businesses Avoid Health Insurance Scams. More information is available on the Department of Labor website. Go to www.dol.gov/pwba and click on "Health Benefits Education for Small Businesses" under the "What's New and Noteworthy" section.
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