  |
|
|
Benefits in the News > By Subject >Cafeteria plans (125, flexible spending) |
| View Recent Headlines | Now Viewing Excerpts and Recent Headlines |
|
[Guidance Overview] 2008 Year-End Plan Sponsor 'To Do' Lists (PDF) 22 pages; at pages 1-14; bravo! Excerpt: "Attached are seven 'to do' lists that may require you to take action before the end of 2008 or in early 2009. Many of the action items are a result of the Pension Protection Act of 2006 (the 'PPA'). For your convenience we have broken the 'to do' lists into the following seven categories: All Qualified Plans; Section 401(k) Plans; Defined Contribution Plans (other than Section 401(k) Plans); Defined Benefit Plans; Section 403(b) and Section 457(b) Plans; Health and Welfare Plans; [and] Executive Compensation." (Snell & Wilmer) [Guidance Overview] 2008 Year-End Checkup for Pension and Welfare Benefit Plans (PDF) 17 pages. Excerpt: "This Alert will help identify general year-end administrative and planning issues that could lead to compliance or employee relations problems if not addressed before, or early in, 2009. In addition, we have highlighted recent legislative or regulatory developments that may require plan design or documentation changes." (Aon) [Guidance Overview] Distributions from Health FSAs to Employees on Active Military Duty Excerpt: "The IRS recently issued clarifications on the Heroes Earnings Assistance and Relief Tax Act of 2008 (the HEART Act) which became law on June 18, 2008. This Act allows, but does not require, distributions from a pre-tax health flexible spending account (health FSA) to employees who leave for active military duty. This article contains a summary of the new IRS guidance issued in Notice 2008-82. For sake of this article, we will refer to a qualified reservist distribution (QRD) as a 'distribution.'" (TRI-AD) [Guidance Overview] Five New Health Plan Compliance Developments Need Consideration (PDF) 5 pages. Law firm's newsletter provides overview of rules on mental health parity, bicycle commuter benefit, Michelle's Law, clarification of dependent child definition and Medicare secondary reporting requirements. (Trucker Huss) [Guidance Overview] New FSA Withdrawal Feature for Eligible Reservists: Amending Cafeteria Plans Following the HEART Act Excerpt: "QRDs are not required additions to FSAs. However, where a plan sponsor decides to offer QRDs, the cafeteria plan must be amended, and the amendment must apply uniformly to all eligible plan participants." (McGuireWoods LLP) [Guidance Overview] Heroes Earnings Assistance and Relief Tax Act of 2008: Impact on Health Care Flexible Spending Accounts Excerpt: "HEART added section 125(h) to the Internal Revenue Code (the Code) which permits cafeteria plans to provide qualified reservist distributions (QRD) to an employee of all or a portion of the balance of the employee's unused amounts in the health FSA." (ERISAdiagnostics, Inc.) Adoption Act Amends Tax Code Definition of Qualifying Child Excerpt: "On Oct. 7, President Bush signed the Fostering Connections to Success and Increasing Adoptions Act of 2008 (H.R.6893). The act focuses primarily on promoting adoption, but it also amends the definition of a qualifying child in the Internal Revenue Code. The definition is used to determine eligibility for certain tax benefits, such as the dependency exemption, the child tax credit, the earned income tax credit and the dependent care tax credit. In addition, it is referenced by many employer-sponsored health care and dependent care plans." (Watson Wyatt Worldwide) [Guidance Overview] IRS Explains That Certain Legal Fees and Mileage Qualify as Medical Care Expenses, but Infant Formula Does Not Excerpt: "The IRS has issued two information letters about medical care expenses. The first letter responds to a taxpayer who asked whether legal fees and mileage expenses to establish a guardianship for her husband (who has Alzheimer's disease) could be deducted as medical care expenses. . . . The second information letter responds to an individual who asked why a health FSA could not provide tax-free reimbursement for infant formula for the baby of a woman who could not breastfeed due to a double mastectomy. The letter explains that food, including infant formula, that satisfies nutritional requirements is a personal expenditure, not a medical care expense, and cannot be reimbursed on a tax-free basis under a health FSA." (Employee Benefits Institute of America) [Guidance Overview] Reservists Don't Have to Use or Lose Their Health Flexible Spending Accounts (PDF) 1 page. Excerpt: "Taxation. Employers should report the [Qualified Reservist Distribution] on Form W-2 as wages for the year in which the QRD is paid to the employee. A QRD is also subject to employment taxes." (Seyfarth Shaw LLP) [Guidance Overview] IRS Guidance on Health FSA Distributions Under the Heart Act Excerpt: "Earlier this year, the Heroes Earnings Assistance and Relief Tax Act (HEART Act) of 2008 became law. The HEART Act was designed to provide much-needed financial flexibility for our military. In its first guidance on the HEART Act, the IRS has released Notice 2008-82 which discusses Qualified Reservist Distributions (QRDs). QRDs provide certain military reservists with special options in their health care flexible spending accounts, but employer action is necessary to enable the process. This article explains the IRS guidance." (JPMorgan Chase & Co.) [Guidance Overview] Health FSAs: IRS Issues Guidance on New 'Qualified Reservist Distributions' Excerpt: "The Heroes Earnings Assistance and Relief Tax Act of 2008 (HEART) amended IRC §125 to permit military reservists who are called to active duty to withdraw the unused portion of their health flexible spending arrangements (FSAs). IRS recently issued guidance explaining how the new distributions are to be administered and provided a transition period until January 1, 2010 for amending the plan document. IRS Notice 2008-82." (Deloitte via BenefitsLink.com) [Guidance Overview] Adoptions Act Narrows the Definition of Qualifying Child Under Code Section 152 Excerpt: "President Bush has signed into law legislation that includes a provision limiting who can be considered a 'qualifying child' under the definition of dependent in Code Section 152. (Under Code Section 152, a person is considered a dependent only if he or she is either a qualifying relative or a qualifying child.)" (Employee Benefits Institute of America (EBIA)) States Use of 'Cafeteria Plans' to Provide Health Insurance Excerpt: "In the past three years, several states are experimenting with a new use for an old idea, aimed at lowering costs for both employees and their employers. 'Section 125 cafeteria plans' were created by a 1978 federal law which amended the Internal Revenue Code. Designed as an optional feature for employers, cafeteria plans allow employees to pay for a variety of health care expenses without paying any federal tax on those charges. . . . As of mid-2008, at least 12 states had adopted a cafeteria plan approach into state-based health reforms, with a dual goal of keeping coverage available and affordable while expanding the numbers using commercial health insurance. " (National Conference of State Legislatures) [Guidance Overview] IRS Details for Qualified Reservist Distribution from Health Flexible Spending Accounts Excerpt: "Employers that have already allowed QRDs from their cafeteria plans should amend their plans to reflect their rules and procedures regarding QRDs no later than December 31, 2009. Some employers may have already amended their cafeteria plans to allow QRDs and, in that case, they should review the amendment to determine whether they need to make any changes based on the recent clarifications. QRDs made on or after January 1, 2010 will require a prospective plan amendment." (Faegre & Benson LLP) [Guidance Overview] IRS Guidance on FSA Distributions under the Heroes Earnings Assistance and Relief Tax Act (PDF) 2 pages. Excerpt: "HEART amended Internal Revenue Code Section 125 to allow employers to provide 'qualified reservist distributions' (QRDs) from health flexible spending accounts (FSAs) to employee-reservists who are called to active duty for 180 or more days, or for an indefinite period of time. . . . The IRS has issued Notice 2008-82, which provides important guidance for plan sponsors who wish to add this feature to their FSAs." (Buck Consultants) [Guidance Overview] IRS Guidance on Qualified Reservist Distributions Addresses Many Open Issues Excerpt: "EBIA Comment: Although QRDs can help reservists avoid unwanted health FSA forfeitures under the use-or-lose rule, some employers may have delayed amending their health FSA and cafeteria plan documents pending further guidance on QRDs. The guidance in the notice provides much-needed clarification on issues that had been left open by the authorizing legislation, and should help these employers to decide whether to add this new feature to their plans." (Employee Benefits Institute of America) IRS Provides Guidance on Reservist FSA Distributions Excerpt: "The Internal Revenue Service has issued Notice 2008-82 providing guidance on qualified reservist distributions (QRDs) from health flexible spending accounts (FSAs) and including a transition rule allowing plans to be retroactively amended for QRDs made before January 1, 2010." (PLANSPONSOR.com; free registration required) Recognizing the Value of Flexible Benefits in Asia Excerpt: "This empowering aspect of flex helps set it apart from traditional health plans. In a world of diverse employees who value different benefits at different stages of their lives, employees can tailor their benefit packages to suit their individual needs and wants, making benefit choices that fit well with their priorities. For example, college graduates entering the workforce might not value medical insurance as much as educational assistance, a new pair of fashionable eyeglasses or a gym membership, while a new parent might embrace maternity and pediatric benefits. And a 55-year-old employee might value additional medical protection and more savings for retirement." (Mercer LLC) [Guidance Overview] Treasury Dept. and IRS 2008-2009 Priority Guidance Plan Includes Guidance for Cafeteria and Health Plans Excerpt: "EBIA Comment: This Priority Guidance Plan covers the twelve-month period ending June 30, 2009, but we are hoping to see final cafeteria plan regulations by the end of 2008. Guidance on GINA will also be welcome as employers, administrators, and insurers begin to familiarize themselves with the requirements of this new law and to consider its impact." (Employee Benefits Institute of America) HSAs, FSAs, HRAs: Which Consumer Driven Health Care Option Should You Choose? (PDF) 2 pages. Updated for 2008 and 2009 Excerpt: "Unfortunately, many consumers and employers are confused about the differences between the various consumer-driven plans and which option would be best for them. The Council for Affordable Health Insurance (CAHI) has prepared this analysis [in chart form] in an effort to help people make informed choices." (The Councial for Affordable Health Insurance) [Guidance Overview] Impact of the Heroes Earnings Assistance and Relief Tax Act of 2008 on Employee Benefit Plans (PDF) 6 pages. Excerpt: "The IRS has yet to issue guidance clarifying the provisions of the HEART Act and their impact on employee benefit plans, although it has identified this guidance as a high priority. Since plan amendments incorporating the mandatory provisions of the HEART Act are not required until the last day of the plan year beginning on or after January 1, 2010, you can wait for further guidance from the IRS before amending your plans. Nonetheless, you must be careful to operate your plans in accordance with the provisions of the HEART Act that are effective retroactively or that will take effect as of January 1, 2009." (Harter Secrest & Emery LLP) [Guidance Overview] REMINDER: January 1, 2009 Proposed Effective Date for New Cafeteria Plan Regulations Excerpt: "Cafeteria plan sponsors, their administrators and advisors will want to examine the need to bring their cafeteria plans into compliance with the proposed cafeteria plan regulations by January 1, 2009. At the time it proposed the regulations, IRS withdrew the prior Prop. Treas. Reg. §§ 1.125-1 & 1.125-2, leaving the new proposals as the only existing regulatory guidance on most of the fundamental features of IRC § 125 plans. Treas. Reg. §§ 1.125-3 and -4 – regarding the effect of the Family and Medical Leave Act on the operation of IRC § 125 cafeteria plans and permitted mid-year election changes, respectively – remain in effect." (Deloitte via BenefitsLink.com) [Official Guidance] Text of IRS 2008-2009 Priority Guidance Plan, Including Reg Projects for Retirement Benefits, Executive Comp, Healthcare and Other Benefits (PDF) 31 pages; dated September 10, 2008. (Internal Revenue Service) [Guidance Overview] Heroes Act Requires Changes to Employee Benefit Plans (PDF) 3 pages. Excerpt: "The changes to employee benefit plans, some required and others optional, generally expand the availability of benefits under retirement and cafeteria plans to employees who have been called to military service. All employers should review the Heroes Act to determine the provisions that apply to their benefit plans, and the applicable effective dates. A summary of the employee benefit provisions of the Heroes Act, and a chart outlining the provisions and their respective effective dates, are provided [on the target page]." (Employee Benefit Plan Review via Winston & Strawn LLP) [Guidance Overview] Certain Year-End and Early 2009 Deadlines Approaching for Retirement and Welfare Benefit Plans Excerpt: "As the end of the calendar year fast approaches, sponsors of retirement and welfare benefit plans should review those plans (including the administration of those plans) to make sure such plans are (or will be) in compliance with year-end and early 2009 requirements." (Bond, Schoeneck & King, PLLC) [Guidance Overview] IRS's Additional Guidance on Health and Fringe Benefit Exclusions for Children of Divorced or Separated Parents Excerpt: "EBIA Comment: The new guidance should clear up the confusion created by the amendments to Code Section 152(e) in situations where a child's custodial parent does not release the claim to the exemption. Employers and administrators need to know about these rules in order to provide appropriate tax treatment under their benefit programs." (Employee Benefits Institute of America) [Official Guidance] Text of IRS Rev. Proc. 2008-48: Treatment of Dependent by Noncustodial Parent When Custodial Parent Has Not Released Claim (PDF) 5 pages. Excerpt: "The Service will treat a child described in the scope section of this revenue procedure of taxpayers within the scope of this revenue procedure as the dependent of both parents under §§ 105(b), 106(a), 132(h)(2)(B), 213(d)(5), 220(d)(2), and 223(d)(2), whether or not the custodial parent releases the claim to the exemption under § 152(e)(2). . . . This revenue procedure is effective August 18, 2008. However, taxpayers may apply this revenue procedure in any taxable year beginning after December 31, 2004, for which the period of limitation on credit or refund under § 6511 has not expired as of August 18, 2008." (Internal Revenue Service) [Guidance Overview] HEART Act Affects Qualified Plans, Health FSAs, and Military Differential Pay (PDF) 4 pages. Excerpt: "In June, the President signed the Heroes Earnings Assistance and Relief Tax Act ('HEART Act') into law. The HEART Act amends certain provisions that were added by the Uniformed Services Employment and Reemployment Rights Act of 1994 ('USERRA'). The HEART Act requires certain changes for retirement plans and permits other changes, changes the treatment of military differential pay for purposes of retirement plans and income tax withholding, permits certain changes to health FSAs, and adds special withholding provisions for certain expatriate employees." (Powell Goldstein LLP) [Guidance Overview] Heroes Earnings Assistance and Relief Tax Act of 2008: Impact on Employee Benefit Plans (PDF) 4 pages. Excerpt: "[The Heroes Earnings Assistance and Relief Tax Act of 2008 (the 'HEART Act')] contains mandatory and optional provisions that impact retirement plan benefits and Health FSAs provided to employees performing 'qualified military service' (generally, military service that is covered by USERRA). These provisions are summarized [on the target page]." (Seyfarth Shaw LLP) [Guidance Overview] The Heroes Earnings and Assistance Relief Tax Act (PDF) Excerpt: "This Regulatory Brief summarizes the key retirement plan provisions included in the Act, along with the relevant decision points for plan sponsors. It also provides a brief overview of the provisions in the Act applicable to cafeteria plans." (The Vanguard Group) [Guidance Overview] Another Question is Answered in the Consumer-Driven Healthcare Reimbursement Accounts (HSAs, HRAs, Archer MSAs, Medicare MSAs) Q&A Column What are the FSA-related requirements under the Heroes Earnings Assistance and Relief Tax (HEART) Act of 2008? (BenefitsLink.com) [Official Guidance] Text of Corrections to Final IRS Regs: Dependent Child of Divorced or Separated Parents or Parents Who Live Apart (PDF) 1 page. Changes 'taxable year' to read 'calendar year' in two provisions. (Internal Revenue Service) [Guidance Overview] IRS Representatives Discuss Tax Issues Affecting COBRA, Wellness Incentives in May 9 Meeting Excerpt: "Several of the questions addressed COBRA continuation of coverage tax issues." (Wolters Kluwer) How Cafeteria Plans Enhance City Employee Benefits while Saving Taxpayer Money (PDF) Excerpt: "Conclusion. Taking full advantage of the city's cafeteriaplan can benefit the city and its employees. Raising employees' net income while reducing city expenses maximizes the city's use of taxpayer dollars and the value of each city job." (Councial for Affordable Health Insurance) [Guidance Overview] Highlights of the New Cafeteria Plan Regulations Excerpt: "These are only a few highlights of the lengthy proposed regulations. On the whole, the rules provide welcome clarification for many issues. However the inflexible rules, zero-tolerance compliance standard, and harsh penalties for plan failures make it important for employers to consider all of the provisions carefully and start reviewing their cafeteria plan documents and administrative practices for compliance now." (Miller & Chevalier Chartered) [Guidance Overview] Impact of the Heroes Earnings Assistance and Relief Act of 2008 on Your Employee Benefit Plans 6 pages. Excerpt: "This newsletter explains how HEART's provisions impact sponsors' administration of health FSAs, qualified 401(k) and other retirement plans, and 403(b) tax-sheltered annuities." (Utz, Miller, Kuhn & Eickman, LLC) IRS and Treasury Officials Provide Informal Views on Health Benefits, Wellness Incentives, and More Excerpt: "The Joint Committee on Employee Benefits (JCEB) of the American Bar Association has posted a report on the May 2008 question-and-answer session between JCEB representatives and IRS and Treasury officials. Highlights include the following informal, nonbinding comments about post-termination health benefits, wellness incentives, health coverage for non-dependents, and COBRA under health FSAs." (Employee Benefits Institute of America) Creative Pairing of HSAs with Other Benefits Can Result in Synergies That Deliver Better Benefits and Coverages Excerpt: "In the early days of HSAs, employers were trying to get their bearings in order to understand – and then utilize – this new savings vehicle. Now, a solid group of HSA devotees has begun pairing other products and programs with HSAs so employees can better maximize the advantages inherent in these plans. These pairings must take into account that HSA-eligible individuals must be covered by a high deductible health plan that meets IRS criteria and can have no other coverage that pays benefits before the IRS-established minimum deductible has been met." (Warner Norcross & Judd LLP) [Guidance Overview] Employer Flex Credits in a Sec. 125 Plan and FSA Limits and Changing Employment Excerpt: "[Response to a question about] an employer group that has a Sec. 125 FSA plan year of March 1 to February 28. There is a bargaining contract in place and part of the initial negotiations required the employer to provide a $25 per month subsidy for either a wellness benefit or the FSA to be used by the employee." (Wolters Kluwer) [Guidance Overview] New Proposed Regulations for Cafeteria Plans Become Effective January 1, 2009 Excerpt: "It is not necessary to restate an existing cafeteria plan document if the plan has been kept up-to-date with current laws and regulations. However, plans established prior to 2000 which have not been amended should be restated." (Swerdlin & Company) [Guidance Overview] IRS Issues Final Regulations on Tax Exemption for Children Whose Parents Are Divorced, Separated, or Living Apart Excerpt: "The final regulations replace regulations that are over 20 years old (and, in many instances, obsolete). Employers should know about these rules because, generally, coverage under a cafeteria plan can only be provided for someone who is a participant, the participant's spouse, or a tax dependent." (Employee Benefits Institute of America) [Guidance Overview] Heroes Earning Assistance and Relief Tax Act Adds Benefits for Those in Military Service (PDF) Pages 3- of 8 pages. Excerpt: "The HEART Act deals principally with the tax treatment of military personnel, with provisions applying to a wide range of Internal Revenue Code ('Code') provisions. This article will deal primarily with those provisions which have an effect on qualified retirement or Section 125 plans, and IRAs." (Trucker Huss) [Official Guidance] Text of Final IRS Regs: Dependent Child of Divorced or Separated Parents or Parents Who Live Apart (PDF) 26 pages. Excerpt: "This document contains final regulations relating to a claim that a child is a dependent by parents who are divorced, legally separated under a decree of separate maintenance, or separated under a written separation agreement, or who live apart at all times during the last 6 months of the calendar year. The regulations reflect amendments under the Working Families Tax Relief Act of 2004 (WFTRA) and the Gulf Opportunity Zone Act of 2005. . . . These regulations are effective July 2, 2008." (Internal Revenue Service) [Guidance Overview] Bush Signs Military Reservist Benefits Measure Excerpt: "Employees no longer will have to forfeit unused balances in their health care flexible spending accounts when called up from the reserves for active military duty." (Workforce Management; free registration required) [Guidance Overview] Miller & Chevalier's Focus on Employee Benefits, June 5, 2008 (PDF) 6 pages. The newsletter offers articles on: Health FSA and Mental Health Parity; Qualified Plan Queries: Differential Pay Now Compensation Under Code Section 415 and New Distribution Feature; Qualified Plan Queries: Military Survivor and Disability Benefits Under Tax-Qualified Plans; Exec Comp Corner: New Code Section 887A Impacting Withholding on Certain Expatriates' Deferred Compensation. (Miller & Chevalier Chartered) New Legislation Enhances 401(k) Benefits for Military Personnel, Allows Qualified Reservist Distributions from Health FSAs, and Extends MHPA Excerpt: "For some 401(k) plans, the Act's rule requiring enhanced survivor benefits may trigger accelerated vesting of matching and profit-sharing contributions for short-service participants. While not previously mandatory, treating differential military pay as plan compensation was already available for 401(k) plans in the final regulations under Code Section 415. (And while not specifically addressed, the Act may also facilitate pre-tax cafeteria plan salary reductions from differential pay.)" (Employee Benefits Institute of America) House Approves FSA Funds for Reservists Called to Duty Excerpt: "Legislation approved Tuesday, May 20, by the House of Representatives would allow individuals called up from the reserves for active military service for at least six months to take unused balances in their health care flexible spending accounts as a taxable distribution." (Workforce Management; free registration required) [Guidance Overview] Chart for Corporate Employers That Compares FSAs, HRAs and HSAs (PDF) 2 pages. (The Segal Group, Inc.) [Guidance Overview] Final HSA Comparability Guidance Clarifies Fair Worker Benefits Excerpt: "A long-awaited final guidance on employer comparable contributions to health savings accounts (HSAs) was released April 17 by the Treasury Dept. and IRS. The guidance clarifies the obligations to other employees when some are offered an HSA as part of their benefits." (AISHealth.com) [Guidance Overview] Hot HR Compliance Issues for Small Businesses in 2008 Excerpt: "The purpose of this article is to highlight a few issues before they become critical [such as Section 409A, flex plans, qualified retirement plans, and 401(k) contributions]." (Employee Benefit News; free registration required) [Guidance Overview] Flexible Spending Account Administrator Breached ERISA by Applying IRC § 125 Requirements Excerpt: "In a decision that underscores the importance of complying with ERISA's Title I requirements, the U.S. District Court of New Jersey held that the administrator of a Flexible Spending Account violated ERISA by applying the IRC § 125 definition of when a medical expense is 'incurred' when the relevant plan documents were silent on the issue. O'Meara v. _________, Civil Action No. 07-CV-4429 DMC (April 1, 2008)." (Deloitte via BenefitsLink.com) [Guidance Overview] Employer Breached ERISA Fiduciary Duties by Providing Misleading Health FSA Documents Excerpt: "EBIA Comment: IRS regulations prohibit health FSAs from reimbursing medical expenses before they are 'incurred,' and provide that medical expenses generally are 'incurred' when medical care is provided, not when the employee is formally billed, charged for, or pays for the medical care. This is not the first time that an employer has run into problems by providing health FSA disclosure documents that refer to IRS Publication 502, which is used to help taxpayers determine what medical expenses they can deduct on their tax returns but is not intended to help someone decide what expenses are reimbursable under a health FSA . . . ." (Employee Benefits Institute of America) [Guidance Overview] Proposed Regulation on TRICARE Incentive Prohibition Addresses Treatment of Cafeteria Plans Excerpt: "EBIA Comment: The TRICARE incentive prohibition applies beginning January 1, 2008 to all employers (except those with fewer than 20 employees). The DoD had previously indicated that the TRICARE incentive prohibition regulation would not consider a Code Section 125 cafeteria plan to be an unlawful incentive so long as all plan participants are treated the same . . . . Although the regulation is only proposed at this point, employers that are subject to the prohibition may want to familiarize themselves with the regulation and its preamble. The prohibition against offering financial or other incentives must be taken seriously -- civil penalties of up to $5,000 can be imposed for each violation." (Employee Benefits Institute of America) FSA's Diversion from IRS Definition Misleading to Participants Excerpt: "A Flexible Spending Account (FSA) plan sponsor had a fiduciary duty to plan participants to clearly state in plan documents that its definition of the word 'incur' was different from the Internal Revenue Service definition, the U.S. District Court for the District of New Jersey ruled." (PLANSPONSOR.com; free registration required) [Guidance Overview] Are Rollover and Transfer Contributions to Health Savings Accounts Permitted? Excerpt: "Rollover and transfer contributions from Archer Medical Savings Accounts (MSAs) and other HSAs to an HSA are permitted. They need not be in cash and are not subject to the annual contribution limits. . . . Rollovers from certain flexible spending arrangements (FSAs) and health reimbursement arrangements (HRAs) are also allowed, subject to the rules of IRS Notice 2007-22." (Wolters Kluwer) Controlling Health Insurance Premiums with FSA, HRA, HSA Plans Excerpt: "Health insurance costs are rising much faster than inflation. But what can manufacturers do about it? One idea that seems to be working is giving employees 'ownership' in their health plans. A big problem is that employees are disconnected from the cost of healthcare. For instance, when asked in surveys, a surprising number of people think the doctor only receives their health plan's co-pay amount, $10 or $20!" (Penton Media, Inc.) [Guidance Overview] Tax-Free Long-Term Disability Benefits (PDF) Pages 2-3 of 4 pages. Excerpt: "An employer who wishes to provide its employees with the opportunity to make after-tax contributions and receive their disability benefits on a tax-free basis needs to prospectively amend its cafeteria plan to permit payment of the premiums on an after-tax basis and communicate this option to employees." (Miller & Chevalier Chartered) [Guidance Overview] State Law Requiring Consent Prior to Withholding for Benefits Preempted Excerpt: "ERISA preempts a state law requiring employees' written consent prior to withholding wages for welfare benefits, according to an Employee Benefits Security Administration (EBSA) advisory opinion." (Wolters Kluwer Financial Services) [Official Guidance] Text of Proposed Labor Regs: 7-Day Safe Harbor for Participant Contributions for Plans Having Fewer Than 100 Participants (PDF) Excerpt: "[T]he Department believes that adoption of a '7-business day' safe harbor rule would present little, if any, additional risk to plan participants and beneficiaries. In this regard, the Department believes that most employers with small plans that are taking longer than 7 business days to deposit participant contributions will expedite the depositing of those contributions to take advantage of the safe harbor. The Department also believes that where participant contributions are being made by employers with small plans within a period shorter than 7 business days, few employers with small plans will incur the costs attendant to modifying their payroll system in order to hold such contributions for a few additional days." (Employee Benefits Security Administration, U.S. Department of Labor) [Opinion] DOL 'Preempts' Congress on Auto-Enrollment Excerpt: "The Department of Labor last week posted on its website Advisory Opinion 2008-02A expressing its opinion that, at least when it comes to ERISA preemption, Congress is…well…kind of irrelevant. The advisory opinion is in response . . . to Solicitor of Labor Eugene Scalia's questions on behalf of Sprint-Nextel's automatic enrollment cafeteria plan, which automatically defaults non-electing employees into a health plan. Importantly, the default plan requires employee cost sharing in the form of payroll deductions." (Baker & Daniels LLP) |
|
URL of this page: http://benefitslink.com/buzz/subjects/cafeteriaplans125flexiblespending.html · This page last modified: Thursday, November 20, 2008 · Webmaster: Dave Baker (click) · © 2008 BenefitsLink.com, Inc. (contact the webmaster for reprint permission) · Linking: Feel free to link directly to this page, even without specifically crediting BenefitsLink ® as its source. Glad you're here! · Privacy Policy |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
