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Did Your 401(k) Plan Meet the Discretionary Contribution Notice Requirements?

"For plan sponsors with a pre-approved 401(k) plan document that contains a discretionary matching contribution, there is a new compliance requirement.... [A] plan must include a clear, predetermined formula for how contributions will be allocated. To meet the new requirement, pre-approved plan documents with discretionary matching contributions must contain the required complaint language and meet two notice requirements."

When Can You Use the DOL Calculator for Earnings on Plan Corrections?

"The DOL provides an online tool that calculates lost earnings for plan sponsors when they owe earnings to their retirement plans due to a prohibited transaction.... Under EPCRS, the IRS provides that to the extent possible earnings on any corrections should be calculated using actual earnings.... There are also several rules of administrative convenience that may be used when the correction involves increasing a participant's account.... There are different rules of administrative convenience that may be used when the correction involves decreasing a participant's account."

IRS Provides Chance to Avoid Roth Catch-Up for Some 403(b) and 457 Participants

"In 403(b) plans, employees with at least 15 years of service at eligible employers, such as public schools and certain nonprofits, may qualify for an additional catch-up contribution of up to $3,000 per year, capped at $15,000 total. The Roth catch-up requirement does not apply to these ... Similarly, for governmental 457(b) plans, the Roth requirement applies only to the extent catch-up contributions exceed the regular 457(b) limit."

When Does Your ERISA Plan Need an Audit?

"Most plans with 100 or more eligible participants at the beginning of the plan year must include an accountant's audit report when filing Form 5500. There is a general exception which allows some smaller plans to avoid attaching an audit to their filing.... For sponsors of health and welfare plans, the good news is that ERISA's audit requirement generally only applies if the plan is funded through a trust (for example, a VEBA), or if participant contributions are otherwise segregated from the employer's general assets."

Deadline Approaching for 457(b) Plans Maintained by Tax-Exempt Organizations

"If you have made any of the following changes in operation to your plan, an amendment is necessary by year end: [1] RMD age ... [2] Roth distributions ... [3] Small benefit amount ... [4] Unforeseeable emergencies."

The Future of Telehealth: Awaiting Legislative Action

"While [CMS] extended many of the flexibilities introduced during the COVID-19 Public Health Emergency (PHE) multiple times over the years, many of these policies are set to expire ... September 30, 2025 -- and others will expire on December 31, 2025. Several bills are pending ... [h]owever, to date, no long-term legislation has offered a solution to make a broad range of telehealth services a permanent benefit under Medicare."

Plan Errors Are Inevitable: Is Your Correction Playbook Ready?

"The first step in your correction playbook should always be to assess the damage.... After damage has been assessed, the next step in your playbook should be to make appropriate corrections.... [T]he last step of your playbook will remind you to document all corrections, including the steps that have been taken to ensure the error does not continue to occur in the future. "

What Happens to Health FSA Balances When COBRA Coverage Is Elected?

"[I]ndividuals who elect to continue health FSA coverage through COBRA are generally only required to have this coverage extended through the plan year in which their qualifying event occurs. However, if the employer’s cafeteria plan allows for a carryover (currently up to $660 in 2025), a qualified beneficiary will still have access to this carryover amount in the following plan year, or if earlier, until the end of their maximum COBRA period.... The cost of coverage for the health FSA will be the amount of contributions elected by the employee for the plan year. "

Can You Charge Smokers More for Your Health Plan?

"Several new lawsuits have been filed recently alleging that employers violated HIPAA's non-discrimination rule by charging higher health insurance premiums to employees who use tobacco products.... In order to satisfy the wellness program exception, a tobacco surcharge must be implemented as part of an employer's health plan, and employees must have a reasonable opportunity to avoid the surcharge or opt into a reasonable alternative at least once per year."

Is My Health Plan Affordable Enough?

"Recently, the IRS announced that the [ACA] affordability threshold will increase to 9.96% of household income for plan years starting in 2026. This is an increase from the 9.02% that applied to 2025. This significant increase means employers have more room to potentially increase the employee portion of premiums for 2026."