Category: Plan Administration
Are You Ready for a HIPAA and ACA Audit?
It's no secret that the Office of Civil Rights of the Department of Health and Human Services has been expanding its enforcement activity under the privacy and security standards of HIPAA. And it's not surprising that enforcement activity is in the offing under the Affordable Care Act as well...
New EPCRS Guidance Expands Scope of 403(b) Plan Corrections
Nearly 20 years after the IRS first established a limited program for the correction of 403(b) plan administrative errors, 403(b) plans have finally been placed on equal footing with qualified plans with respect to the correction of operational, documentary, and demographic failures under the Employee Plans Compliance Resolution System...
Same-Sex Marriage and Your Employee Benefit Plans
Maine has now officially joined nine other states in allowing same-sex marriage. The new Maine law ("An Act to Allow Marriage Licenses for Same-sex Couples and Protect Religious Freedom") was approved by a referendum election on November 6, 2012, and it became effective December 29, 2012. Some municipal offices...
2012 Year End Benefit Plan Compliance Checklist and Reminders for Employers
By comparison to past years, the end of 2012 and beginning of 2013 seem not to bring all that much in the way of new legal compliance burdens regarding retirement plans, health plans, and deferred compensation plans. For the most part employers face the continued implementation of changes in...
IRS Blesses Leave-Based Donation Programs for Hurricane Sandy Relief
Echoing the guidance provided back in 2005 in the aftermath of Hurricane Katrina, the IRS has published Notice 2012-69 to support leave-based donation programs for the relief of the victims of Hurricane Sandy. Leave-based donation programs allow employees to elect to forego vacation, sick, or personal leave in exchange...
HSAs in Operation: Ten Common Questions
It's open enrollment season and many employers are implementing high-deductible health plans (HDHPs) with a Health Savings Account (HSA) feature. Our prior posts about HDHPs and HSAs have explored the general eligibility requirements for HDHP/HSA arrangements and HSA contributions . Today we address common questions about the operation of...
Retention of Records for Employee Benefit Plans: How Long Is Long Enough?
Revised November 14, 2022 From time to time employers ask us how long they need to retain records relating to their ERISA plans. Though the question is most frequently asked with respect to retirement plans, it applies to health and other welfare benefit plans as well. The rules under...
Summary of Benefits and Coverage Must be Provided Soon
As employers prepare for their fall 2012 open enrollment efforts, we wanted to offer a reminder that a Summary of Benefits and Coverage (or "SBC") will now have to be provided to group health plan participants and beneficiaries. For group health plans having open enrollment periods, this new requirement...
July 1 Deadline Approaching for Service Provider Disclosures
As all sponsors and fiduciaries of tax-qualified retirement plans should know by now, written fee and expense disclosures are due to be provided to plan fiduciaries by "covered service providers" by July 1. As we explained in a prior post , this important disclosure is mandated by final regulations...
The First Circuit’s DOMA Decision: What It Means for Employers
On May 31, 2012 the U.S. Court of Appeals for the First Circuit, in Massachusetts v. United States Department of Health and Human Services , declared Section 3 of the Defense of Marriage Act (DOMA) unconstitutional. Section 3 defines marriage for purposes of applying all federal statutes as "a...
HSA Contributions: Making Sense of the Moving Parts
As we have noted, high-deductible health plans (HDHPs) with a Health Savings Account (HSA) feature are growing in popularity. Our last post on HDHP/HSA arrangements explored some of the general eligibility questions we are asked most frequently. Today we address common questions about HSA contributions. 1. Are contributions limited...
Participant-Level Fee Disclosure for ERISA and Non-ERISA Plans
After our recent post on the fiduciary-level fee disclosure rules under ERISA Section 408(b)(2), we wanted to complete the picture for plan fiduciaries by revisiting the participant-level fee disclosure rules under ERISA Section 404(a). These rules require fiduciaries of participant-directed individual account plans (such as 401(k) and 403(b) plans...
Plan Fiduciaries Should “Welcome” Final Regulations Regarding Service Provider Disclosures
Last week the U.S. Department of Labor published Final Regulations dealing with service provider disclosures under Section 408(b)(2) of ERISA. This is the latest in a series of regulatory initiatives undertaken by the DOL to ensure that plan fiduciaries, as well as plan participants and beneficiaries, obtain meaningful information...
Three Tips for Cycle A Determination Letter Filers
Happy New Year! The deadline for Cycle A filers (employers with EINs ending in 1 or 6) to submit determination letter applications to the IRS for their tax-qualified retirement plans closes on January 31, 2012. That means that employee benefits lawyers and other professionals all over the country (including...
Implementing an HSA with HDHP: How Hard Could it Be?
High-deductible health plans (HDHPs) with a Health Savings Account (HSA) feature are growing in popularity. While implementing an HDHP/HSA arrangement can be complicated, having a sense of the landscape can prevent uncomfortable bumps and bruises. This post explores some of the general eligibility questions we are asked most frequently...
TIGTA Finds IRS Examinations Are Adversely Affected By Information Dropped from Electronic Form 5500 Filings
Prior to January 2010, the DOL manually processed Form 5500 paper returns and schedules. Beginning in January 2010, the DOL began using a new system called EFAST 2 to process Form 5500 filings electronically. Because the Code does not require certain filers to provide information electronically, a variety of...
Unclaimed Benefits and State Escheat Laws
From time to time we are asked whether a plan administrator must report and remit unclaimed plan benefit payments as abandoned or unclaimed property to various states under their escheat and unclaimed property statutes. Clients are usually asking about how to handle uncashed retirement plan benefit checks, and this...
Two Things EPCRS Does Not Tell You About Retroactive Amendments, But You May Want to Know
The Employee Plans Compliance Resolution System (EPCRS) is the IRS' comprehensive correction system for tax-qualified retirement plans, currently set forth in Rev. Proc. 2008-50 (we expect a new EPCRS Rev. Proc. to be released in the near future). One correction method under EPCRS allows operational failures to be voluntarily...
An Over-the-Counter Remedy for the Health Risk Assessment Headache
A number of clients have recently asked a relatively simple question: Can they require an employee to take a health risk assessment ("HRA") as a condition of participation in a wellness program or group health plan? This question seems simple enough. Nevertheless, the answer involves unraveling a complex web...
IRS Getting Better and Better at Selecting and Auditing Noncompliant Plans
According to a report recently published by the Treasury Department's Inspector General for Tax Administration, the IRS has significantly improved its ability to select noncompliant retirement plans for examination and is achieving greater success results in those examinations. The report describes the methods used by the IRS to identify...
IRS Swamped by EPCRS Applications: The Price of Popularity
The IRS Employee Plans Compliance Resolution System (EPCRS) has been a true success story for the Service and for plan sponsors. Under EPCRS, a plan sponsor may voluntarily correct a wide variety of errors made in the administration or drafting of a tax-qualified retirement plan, with a more limited...
Five Things to Consider in Completing Form 990: Tips from an Expert
We are pleased to offer a guest post by Warren Kerper , Managing Principal in the Boston office of Sullivan, Cotter and Associates, Inc. Warren advises tax-exempt employers, especially health care organizations and colleges and universities, in the design and establishment of a wide variety of executive compensation arrangements...
Electronic Disclosure Comment Period Ends
As we discussed in an earlier post , in April the Department of Labor's Employee Benefits Security Administration (EBSA) issued a Request for Information (RFI) soliciting views, suggestions, and comments to determine whether to expand or modify the rules regarding electronic distribution of employee benefit plan information under ERISA...
DOL Officially Proposes Delay in Application of Fiduciary Fee Disclosure Rules
The DOL's Employee Benefits Security Administration (EBSA) has finally provided official notice of its proposal to delay the applicability date of the new fiduciary fee disclosure rules under ERISA Section 408(b)(2), from July 16, 2011 to January 1, 2012. Although EBSA announced its intention to propose this delay back...
IRS Launches Universal Availability Rule Compliance Project
The IRS Employee Plans Compliance Unit (EPCU) has kicked off its long awaited compliance initiative focusing on how higher education organizations apply the "universal availability rule" to their 403(b) plans . As we've explained in a prior post , under the universal availability rule if a 403(b) plan permits...
DOL (Finally) Considers Changes to Electronic Disclosure Rules
The Department of Labor's Employee Benefits Security Administration (EBSA) has determined that it may be time to update the rules regarding electronic disclosures. (The current rules were published back in 2002.) Accordingly, EBSA has issued a Request for Information (RFI) soliciting views, suggestions, and comments to determine whether to...
Reporting Health Care Costs on Form W-2
The Affordable Care Act requires employers to report on Form W-2, for informational purposes only, the cost of the group health benefits provided to each employee. IRS Notice 2011-28 (issued March 29, 2011) provides interim guidance on how this new information reporting obligation is to be implemented. Employers are...
Expanded Form 1099 Reporting Repealed, Free Choice Vouchers Likely Next
Late yesterday President Obama signed into law legislation to repeal the expanded Form 1099 reporting requirements passed under health care reform. This new legislation, supported by the President, marks Congress' first successful rollback of health care reform. As discussed in an earlier post , the new legislation repeals a...
A Prudent Process Protects Fiduciaries
Section 404(a)(1)(B) of ERISA requires a fiduciary to discharge its duties with respect to an ERISA plan "with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of...
Ignoring the IRS Is Not a Good Idea (another example)
On February 23, 2011, the IRS indicated that its 401(k) Compliance Check Questionnaire Project is entering its next phase. As discussed in a prior post , in May 2010 the IRS, through its Employee Plans Compliance Unit, sent letters to a statistically valid sample of 1,200 401(k) plan sponsors...
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