TPCP 101 Exam – Primary Care Paramedic Study Material (foundations review
and exam preparation guide)
First dollar coverage rule - correct answer ✔✔for HSAs - insurer is prohibited from covering
most health expenses until the covered individual has paid the deductible amount out of pocket
exceptions: preventative care
health savings accounts - correct answer ✔✔participation in HRAs or FSAs will disqualify an
individual from being allowed to contribute
however, limited purpose FSA/HRA (dental/vision) are allowed
Tricare/Medicare disqualifies you as well
they have triple tax benefits
1) deduction for contributions 2) growth is tax deferred 3) distributions are tax & penalty free if
used for qualifying expenses
prioritize contributions to older spouse, expenses from younger spouse
individuals should stop contributions 6-7 months prior to 70th birthday and starting SSA
benefits (which includes enrolling in Medicare Part A)
traditional IRA essentials - correct answer ✔✔high income & active participation in ER
sponsored plan must both be present to eliminate the deductibility of a Traditional IRA
contribution - no limit on the ability to make the contribution, only the deductibility of it
report non-deductible IRA contributions on form 8606 - counts cumulative nondeductible
contributions - best practice is to always file form each year even when not required
,IRA pro rata rule - correct answer ✔✔in the event an IRA owner has any after-tax amounts in
their IRA, this rule applies
the % of an IRA distribution that is tax-free is the same as the % of the after tax dollars the IRA
owner has in all their IRAs compared to the total amount of dollars in all their iRAs
potential strategy to roll over existing Traditional IRA $ into an ER plan - by rolling it into a 401k
or similar plan, an individual can effectively clear their iRA balance, allowing them to take
advantage of the backdoor Roth IRA without being impacted by the pro-rata rule in future years
Roth IRA requirements - correct answer ✔✔two requirements to contribute: must have
compensation and be subject to the income eligibility requirement that is adjusted for inflation
each year
if married couples are considering contributions, they should contribute to the older spouse's
first because they will reach age 59 1/2 first and can take tax/penalty free distributions first
step transaction doctrine - correct answer ✔✔regarding backdoor roth ira contributions
a legal principle that basically says you cannot use multiple steps to do something that you can't
do directly in one step - however, most experts agree there is no minimum amount of time to
wait until converting funds
some go by the one statement rule - wait until the particular custodian has issued one
statement showing the contribution made inside the traditional IRA
529 to Roth - correct answer ✔✔"like to like" is the beneficiary of the 529 and the owner of the
Roth IRA
,the beneficiary of the 529 must have compensation - earned income of some kind for them to
make this contribution - however, the regular income limits that apply to direct Roth IRA
contributions DO NOT apply to this transfer
two holding periods must be satisfied: the 529 plan must have been in existence for 15 years
and no $ contributed in the last 5 years or earnings on those funds can be transferred
there is a lifetime cap of $35k that can be transferred
Mega backdoor Roth essentials - correct answer ✔✔some plans offer after-tax plan
contributions (not Roth salary deferrals) - however, many plans do not offer this and the
individual al must have room left to make the contributions under the annual additions limit
1. client must have enough compensation to make these contributions
2. the after-tax contribution must pass testing (the Average Contribution Percentage test)
safe harbor plans allow individual to make salary deferrals up to the salary deferral limit, but do
NOT provide the same benefit for after-tax contributions - you CANNOT safe harbor your safe
out of ACP testing for after-tax contributions
the plan must allow for periodic in-service distributions - the in service distributions allow the
conversions to take place
coordinating contributions among employer plans - correct answer ✔✔can defer up to the total
salary deferral limit between multiple plans - even if they are different types of plans (401(k),
403(b) - cannot exceed
exception is for governmental 457 deferred compensation plan - the salary deferral limits are
separate
, the salary deferral limits for ER plans are coordinated across all plans
a single limit applies to every plan in which an individual participates
the overall limit is looked at separately for each plan as long as the employers are unrelated
FSA overview - correct answer ✔✔you should only count on medical expenses that you are
likely to incur
employers may:
1) allow participants to roll over a limited amount of funds to next year
2) or spend amounts that were not used in previous year in the first 2 months of the year
eligibility typically ends of the individual's last day of employment, not the last day of the month
of their employment
any new medical expenses after date of separation will not be eligible for reimbursement from a
healthcare fsa
individuals who either plan to leave their ER or believe it is possible they may be terminated
may wish to limit contributions even more than normal
for limited purpose fsas, can only consider healthcare expenses that are eligible (dental or
vision)
dependent care fsa - correct answer ✔✔designed to assist with dependent care - childcare,
preschool, summer camps, non-employer sponsored before and after school programs
also reduces both OI tax and fica taxes
there is NO rollover option - they are truly use it or lose it accounts
and exam preparation guide)
First dollar coverage rule - correct answer ✔✔for HSAs - insurer is prohibited from covering
most health expenses until the covered individual has paid the deductible amount out of pocket
exceptions: preventative care
health savings accounts - correct answer ✔✔participation in HRAs or FSAs will disqualify an
individual from being allowed to contribute
however, limited purpose FSA/HRA (dental/vision) are allowed
Tricare/Medicare disqualifies you as well
they have triple tax benefits
1) deduction for contributions 2) growth is tax deferred 3) distributions are tax & penalty free if
used for qualifying expenses
prioritize contributions to older spouse, expenses from younger spouse
individuals should stop contributions 6-7 months prior to 70th birthday and starting SSA
benefits (which includes enrolling in Medicare Part A)
traditional IRA essentials - correct answer ✔✔high income & active participation in ER
sponsored plan must both be present to eliminate the deductibility of a Traditional IRA
contribution - no limit on the ability to make the contribution, only the deductibility of it
report non-deductible IRA contributions on form 8606 - counts cumulative nondeductible
contributions - best practice is to always file form each year even when not required
,IRA pro rata rule - correct answer ✔✔in the event an IRA owner has any after-tax amounts in
their IRA, this rule applies
the % of an IRA distribution that is tax-free is the same as the % of the after tax dollars the IRA
owner has in all their IRAs compared to the total amount of dollars in all their iRAs
potential strategy to roll over existing Traditional IRA $ into an ER plan - by rolling it into a 401k
or similar plan, an individual can effectively clear their iRA balance, allowing them to take
advantage of the backdoor Roth IRA without being impacted by the pro-rata rule in future years
Roth IRA requirements - correct answer ✔✔two requirements to contribute: must have
compensation and be subject to the income eligibility requirement that is adjusted for inflation
each year
if married couples are considering contributions, they should contribute to the older spouse's
first because they will reach age 59 1/2 first and can take tax/penalty free distributions first
step transaction doctrine - correct answer ✔✔regarding backdoor roth ira contributions
a legal principle that basically says you cannot use multiple steps to do something that you can't
do directly in one step - however, most experts agree there is no minimum amount of time to
wait until converting funds
some go by the one statement rule - wait until the particular custodian has issued one
statement showing the contribution made inside the traditional IRA
529 to Roth - correct answer ✔✔"like to like" is the beneficiary of the 529 and the owner of the
Roth IRA
,the beneficiary of the 529 must have compensation - earned income of some kind for them to
make this contribution - however, the regular income limits that apply to direct Roth IRA
contributions DO NOT apply to this transfer
two holding periods must be satisfied: the 529 plan must have been in existence for 15 years
and no $ contributed in the last 5 years or earnings on those funds can be transferred
there is a lifetime cap of $35k that can be transferred
Mega backdoor Roth essentials - correct answer ✔✔some plans offer after-tax plan
contributions (not Roth salary deferrals) - however, many plans do not offer this and the
individual al must have room left to make the contributions under the annual additions limit
1. client must have enough compensation to make these contributions
2. the after-tax contribution must pass testing (the Average Contribution Percentage test)
safe harbor plans allow individual to make salary deferrals up to the salary deferral limit, but do
NOT provide the same benefit for after-tax contributions - you CANNOT safe harbor your safe
out of ACP testing for after-tax contributions
the plan must allow for periodic in-service distributions - the in service distributions allow the
conversions to take place
coordinating contributions among employer plans - correct answer ✔✔can defer up to the total
salary deferral limit between multiple plans - even if they are different types of plans (401(k),
403(b) - cannot exceed
exception is for governmental 457 deferred compensation plan - the salary deferral limits are
separate
, the salary deferral limits for ER plans are coordinated across all plans
a single limit applies to every plan in which an individual participates
the overall limit is looked at separately for each plan as long as the employers are unrelated
FSA overview - correct answer ✔✔you should only count on medical expenses that you are
likely to incur
employers may:
1) allow participants to roll over a limited amount of funds to next year
2) or spend amounts that were not used in previous year in the first 2 months of the year
eligibility typically ends of the individual's last day of employment, not the last day of the month
of their employment
any new medical expenses after date of separation will not be eligible for reimbursement from a
healthcare fsa
individuals who either plan to leave their ER or believe it is possible they may be terminated
may wish to limit contributions even more than normal
for limited purpose fsas, can only consider healthcare expenses that are eligible (dental or
vision)
dependent care fsa - correct answer ✔✔designed to assist with dependent care - childcare,
preschool, summer camps, non-employer sponsored before and after school programs
also reduces both OI tax and fica taxes
there is NO rollover option - they are truly use it or lose it accounts
