In a World Where Identity Theft Protection Is Not Created Equal...

inaworld

The media and entertainment industry was abuzz after the historic hacking of Sony Pictures Entertainment's network this past November. Careers were tarnished and The Interview became a cultural event. But the terrifying real-life drama that resulted from the hack was left out of the spotlight. Thousands of Sony Pictures Entertainment employees were living in a horror film after their identities, bank accounts, and health information were compromised in the security breach.

“You chug along. But it is like, wow, you always have to look over your shoulder. This is forever.”
— Sony Pictures Employee

An employee* of Sony Pictures Entertainment has opened up to Fortune about the personal impact the security breach had on his family and some of his colleagues. From having to take time off for opening and closing accounts to worrying about their life savings and retirement funds, the cost of identity theft is devastating to both employees and employers. Read the full article here.

“The company provided us with All Clear ID, which is a security monitoring firm, but some people said that LifeLock was the way to go, and I decided to get it. There’s a reason you pay for it.”
— Sony Picture Employee

As employers and employees work to secure networks and personal identities, they often start exploring the world of identity theft protection. Many providers offer "reactive" services that may be presented at a lower cost. The problem with reactive services is that often times the impact of a security breach is not seen until after accounts and identities are compromised. Only Lifelock Identity Theft Protection provides proactive monitoring and alerts.

In today's digital world it is not a matter of if but when identity theft will happen. Learn how BPC and LifeLock Identity Theft Protection can safeguard your employees as a voluntary employee benefit at no cost to your company. And, by partnering with BPC, you can offer this group benefit at rates much lower than what is available to individual customers. Watch this video and learn more about how BPC and LifeLock Identity Theft Protection can safeguard your employees.

*The employee’s name has been withheld due to the sensitivity of the ongoing situation.

 

Posted on February 27, 2015 .

IRS Announces Transition Relief for Small Employers Offering Certain Health Coverage Reimbursements

Exise Tax Relief for Small Employers

As employers continue to adapt to Affordable Care Act market reforms, the IRS continues to provide guidance and clarification. In its latest notice,  IRS has provided small employers who reimburse or pay certain individual health insurance policy premiums for employees with some limited transition relief from the assessment of the excise tax in Code Sec. 4980D until July 1, 2015.

The full notice answering five questions can be read here. Below are highlights from the guidance.

Transition Relief and Clarification on Individual Premium Plans

Question and answer one provides that small employers (not an Applicable Large Employer (ALE)), who employed fewer than 50 employees in the prior year, that reimbursed some or all of individual medical premiums in 2014 or the first half of 2015 are not subject to any excise tax until July 1, 2015. The IRS reiterates their position that ultimately these arrangements will be subject to tax in the future and this relief is being provided to allow small employers additional time to obtain group health coverage or adopt a suitable alternative. 

The Notice is clear in question and answer five that whether a premium reimbursement is considered taxable income to the receiving employee is not at issue. Rev. Rul. 61-146, which holds that benefits paid through such arrangements are not taxable income, continues to apply. That ruling does not mean that excise taxes to the employer will not be applicable though. Nor does the IRS consider a reimbursement program acceptable simply on the basis of the premiums being paid post-tax. Even if considered taxable, a premium reimbursement program may still constitute an employer payment plan, fail the annual dollar limit and preventive services requirements, and be subject to the excise tax.   

However, Q&A 4 indicates that increasing an employee’s compensation, without conditioning the payment on any purchase of health coverage (or otherwise endorsing a particular policy, form or issuer of health insurance) will not constitute an employer payment plan.  It appears that in the long-term, employers wishing to assist employees with the purchase of individual premiums may need to take this relatively hands-off approach.  

Treatment of S Corporations' Health Care Arrangements:

The second question and answer clarifies that a premium reimbursement plan can still cover S-Corp owners (not employees) on a post-tax basis, and S-Corp owners can still claim the deduction at year-end. Further guidance may be issued, but until that point S-Corp owners can continue to reply on IRS Notice 2008-1.

Integration of Medicare Premium Reimbursement Arrangements and TRICARE-related HRA with a Group Health Plan

In the third question and answer, the IRS reiterates previous guidance that Medicare and TRICARE are not group health plans, but offers a sort of middle road for providing an integrated plan to reimburse premiums (Medicare) or medical expenses (TRICARE) without requiring actual enrollment in the employer’s group health plan. In each case employers have to offer a minimum value group health plan, the employee must be enrolled in the other coverage (Medicare/TRICARE), and the plan must be restricted to employees with that coverage. The Notice also details restrictions on what each plan could reimburse.  

The IRS anticipates that clarifications regarding other aspects of employer payment plans and HRAs will be provided in the near future. BPC will continue to keep you in the know along the way. 

 

Posted on February 20, 2015 .

What Employers Need to Know About Illinois' Mandated Retirement Savings Program

What Employers Need to Know About Illinois' Mandated Retirement Savings Program

A new law makes Illinois the first state in the nation to put in place a mandatory, state-run retirement savings program for private-sector Illinois employers. Just before leaving office last month, former Illinois Governor Pat Quinn signed into law a measure to create the Illinois Secure Choice Savings Program

The law takes effect on June 1, 2015 and requires the program to be implemented within 24 months. This program is subject to two things: 1) favorable determination this program is not subject to ERISA; 2) initial program funding by the state.

This new law and program will not impact or apply to private-sector Illinois employers who are offering an employer-sponsored retirement plan at the time the law is implemented.

Below are FAQs covering the highlights of the new law and how it impacts employers.

What are the highlights of this new Illinois law?

Private-sector employers in Illinois must offer this Illinois operated retirement savings program to their employees upon implementation of the law if the employer:

  • Has been in operation for at least two years, and
  • Has at least 25 employees, and 
  • Does not offer an employer-sponsored retirement plan

Is my company/our organization exempt from this new Illinois law because we offer an employer-sponsored retirement plan?

Illinois employers are exempt from the new law if an employer-sponsored plan (assuming you continue to maintain your plan throughout the implementation of the law).  An Illinois employer will be exempt from this law if they offer a 401(k), an ERISA 403(b) plan, any other type of ERISA retirement plan, or a SIMPLE or SEP, and that plan is operational on and after June 1, 2017.    

Will this new law impact or make any new requirements on our current retirement plan’s provisions, design or operation?

There is no impact on employers who currently offer a plan.  You must simply continue to offer your employer-sponsored retirement plan to be exempt from this new law and program.               

How will this new law apply to my company/our organization if we do not have an employer-sponsored retirement plan when the law goes into effect?

  • Illinois employers not exempt from this law must automatically enroll their employees in this new state retirement savings plan upon implementation of the law. Employees may individually opt out.
  • Employers must make a 3% of pay IRA deduction and send it to each employees’ IRA under this program; participants will be able to adjust the percentage of their pay they have deducted.
  • IRA deductions under this program will be sent into a new state-run pooled investment fund; a Board is being established under this law to design and oversee this new Illinois pooled investment fund. 
  • At least once a year employers not exempted from this program must offer an open enrollment period to allow employees who opted out of the program to enroll.
  • Employers who do not offer an employer-based retirement plan AND who fail to offer the Secure Choice program will subject to annual fines; fines start at $250 per employee in year one for those not automatically enrolled (unless they opt out), and increase to $500 per employee in year 2 and thereafter for those employees not annually automatically enrolled (unless they annually opt out).

What should my company/organization do if we not currently offer an employer-sponsored retirement plan and do not want to be subject to the new Illinois mandate?

Employer initiated, designed and sponsored employee benefits are more flexible, effective and attractive than government-mandated alternative programs. Contact BPC at 800-355-2350 for a no-cost complementary retirement plan design conversation and cost estimate.

Where can I read more about this new Illinois law?

You can review the full text of Illinois Senate Bill SB2758 and this helpful industry article from the NAPA. 

BPC is always ready to help guide employers through matters related to your current retirement plan or a prospective new plan. Contact us at 800-355-2350.

Posted on February 9, 2015 .

What Employers Need to Know About COBRA Compliance

What employers need to know about COBRA Notices

We all know that when an employee terminates, he should be offered COBRA.  Beyond that, it starts to get complicated.  That is why BPC offers comprehensive COBRA administration services to save you time and keep your company in compliance. 

COBRA notice requirements begin long before an employee loses coverage.  Let's start with a brief refresher on the beginning of the COBRA process and Qualifying COBRA Events.

What is an Initial COBRA Notice?

Also known as the General Notice, this is a short description of a participant’s rights and obligations under COBRA.  It is to be furnished when a participant first becomes covered under a plan, to ensure that the participant is aware of the right to elect COBRA if they terminate employment or experience another qualifying event at some point in the future. 

When must an Initial COBRA Notice be sent?

The Department of Labor’s COBRA regulations specify that the Initial COBRA Notice should be delivered within 90 days after the coverage begins.  In order to ensure this deadline is met, BPC asks that employers inform BPC of new coverage for employees or spouses within 30 days from the start of coverage.

Keep reading...

Posted on February 9, 2015 .

Secretary of Treasury Establishes myRA Accounts

What employers need to know about myRA regulations

On December 15, 2014 The Secretary of the Treasury issued regulations establishing myRA accounts.  These regulations were issued in response to President Obama’s directive to create government-backed personal retirement savings accounts starting 2015. The goal of government’s myRA program is to increase personal retirement savings.

What are the main highlights of myRA?

  • A voluntary retirement savings option for workers.  

  • Targeted at low-and-middle income American workers who do not have access to employer-sponsored retirement plans.
  • Allows workers to save for retirement using after-tax contributions and withdraw the money in retirement tax-free (no tax on earnings).
  • Savers can participate in myRA until their account balance reaches $15,000, or 30 years, whichever occurs first.
  • Invests solely in a savings bond backed by the U.S. government.   
  • Savers can transfer their myRA account balance at any time to a commercial financial services provider of Roth IRA’s.
  • Savers can withdraw their contributions at any time but withdrawals of interest before age 59 ½ incur taxes/penalties like a traditional Roth IRA.


What theme does myRA, the recently signed Illinois Secure Choice Savings Program, and the USA Retirement Funds Act being considered by Congress seem to have common?

The theme is to encourage employers, possibly require employers in federal legislation, to offer a retirement savings program to their employees and for employees to start saving and to save more for retirement.   

Given this theme what options are available now for employers?

For employers already sponsoring a sponsoring a plan, continue offering a retirement plan and regularly encourage workers to save and save more for retirement.  If new legislation or regulation impacts the design requirements of your plan BPC will assist you. 

For employers not offering a retirement plan, offer one on your terms.  The emerging theme points to offer a plan of your choosing and design that provides tax-advantages to both your company and your employees---or be forced to offer a government designed plan.  Employer initiated retirement plans are historically more flexible, effective and attractive than government-mandated options.  

For employers with a plan not with BPC and for employers not offering a retirement plan, contact BPC at 800-355-2350 to discuss your retirement plan goals and options and our retirement plan service.

Posted on February 9, 2015 .

Creating a Thriving Service Culture

Merriam-Webster Dictionary has named "Culture" the 2014 Word of the Year! At BPC we are very intentional about fostering a service-based corporate culture that focuses on the kindness and service we provide for our clients and colleagues.

Whether you are intentional about it or not, your organization has a culture. Is your culture productive? Where does culture start? Who is responsible for fostering it? In this video series, CEO Habeeb Habeeb shares the philosophy behind BPC's culture and how you can create a thriving service culture in your organization. 

Posted on December 15, 2014 .

2014 In Review: Compliance Updates and Recommendations

As 2014 draws to a close, we have selected a number of important compliance updates and recommendations you may need to consider for your retirement and benefit plans. Please contact a BPC team member to further discuss or implement applicable recommendations for your plans.

 

BPC Enhances HSA Administration

BPC has partnered with Avidia Bank to seamlessly integrate their robust banking platform with BPC's compliance and administration services. Thanks to this partnership participants will benefit from having no monthly administrative fees, more than a dozen mutual fund investment options, and the peace of mind that comes from keeping money with an FDIC-insured community bank. Learn More


Important Facts on Restating Your Retirement Plan Document

Retatements

The mandatory Pension Protection Act (PPA) Plan Document Restatement Window, as set by the IRS, is open now through April 30, 2016. Here are details on how restatements impact your plan and how BPC is ready to help. Learn More


2015 Flexible Spending Accounts Limits

FSA Limits 2014

The IRS has released 2015 annual adjustments for various tax benefits including Flexible Spending Accounts (FSA). The maximum Health FSA election in 2015 has risen to $2,550.00. Learn more


New Health FSA Rollover Feature Benefits Employers and Participants

FSA Rollover

In the early stages of the new Health FSA rollover, the results for plan sponsors and participants are trending positive.  By opting in for the new Health FSA balance rollover feature, you can reduce participants' fear of losing money and encourage employees to contribute more dollars into their Health FSAs, saving you and employees tax dollars along the way. Learn More


2015 Pension Plan Limits

2015 pension limits

The 2015 cost-of-living adjustments on dollar limitations for pension plans and other retirement-related items were released by the IRS. Some limits will remain unchanged in 2015 because the increase in the Consumer Price Index did not meet the statutory thresholds for their adjustment, however, other limitations will increase for 2015. Learn More


New Permitted Cafeteria Plan Changes

cafeteria plan changes

The Affordable Care Act gives people access to healthcare options they've never had before.  However, without proper amendments, your Cafeteria Plan will likely restrict your employees from utilizing those options, effectively "trapping" them on your group health plan.  Click here to learn more about BPC's recommended updates to your plan. Learn More


Important ACA Reminders

aca reminders

The Affordable Care Act (ACA) included rules that impact Cafeteria Plans and HRAs. We want to share another reminder about the following elements that should raise significant red flags if they're a part of your current benefit structure. 

Be cautious if any these three statements are true of your organization:

1.    We (the employer) contribute more than $500 into employee Health FSAs.

2.    We offer a Health FSA to people who are not eligible for our Group Health Plan.

3.    We reimburse individual health insurance premiums through our Cafeteria Plan or HRA.

Learn more

Posted on December 10, 2014 .

ACA Reminders for Your Reimbursement Plans

The Affordable Care Act (ACA) included rules that impact cafeteria plans. We want to share another reminder about the following elements that should raise significant red flags if they’re a part of your current benefit structure.  Be cautious if any these three statements are true of your organization:

1.    We (the employer) contribute more than $500 into employee Health FSAs.

2.    We offer a Health FSA to people who are not eligible for our Group Health Plan.

3.    We reimburse individual health insurance premiums through our Cafeteria Plan or HRA.

If any of these describe your benefits, please contact BPC right away to discuss whether your plan is out of compliance and what corrective actions may be necessary.  

The Affordable Care Act requires that group health plans cover preventive services at 100% and that they have no annual or lifetime limits.  Instituting a group health plan that fails to comply with these mandates can result in excise tax penalties of up to $100 per day per employee.  

Excepted Health FSA: A Health FSA is exempt from the annual limit prohibition, but is subject to the preventive services requirement it unless is a considered an excepted benefit.  To be considered an excepted benefit, it must meet two parameters:

1.    It must be offered only to employees who are eligible for your group health plan.

2.    The maximum payable benefit cannot exceed two times the employee’s salary reduction, or, if greater, the employee’s salary reduction plus $500.

Generally, a Health FSA funded solely by employee contributions will be safe, as long as it is only offered to employees who are eligible for the group health plan.  Employer contributions to a Health FSA, provided as a match, or totaling less than $500, will also be safe.

It is also possible to establish a limited-purpose FSA, restricted to dental and vision expenses only, which will be considered an excepted benefit based on the expenses it covers, without regard to the parameters above.

Individual Insurance Premiums: Many employers may wish to offer employees assistance in obtaining individual health insurance coverage, rather than providing a group health plan.  Unfortunately, repeated agency guidance has indicated that the IRS and DOL consider employer funding of individual premiums to be a group health plan in its own right.  They have also clearly stated their position that such arrangements will generally fail the annual limit prohibition and the preventive services mandate.  Their view is that even if the individual policies purchased meet those requirements, the policy reimbursement arrangement will not.  

Employers wishing to provide assistance to employees on the purchase of individual premiums should generally just provide basic wage increases, with no requirements for how the funds are used.  Allowing any pre-tax payroll deductions to fund individual policies appears to carry significant risks in today’s regulatory landscape.

 

Posted on December 9, 2014 .

New Health FSA Rollover Feature is Benefiting Employers and Participants

Rolloverbenefits

In the early stages of the new Health FSA rollover, the results for plan sponsors and participants are trending positive.  By opting in for the new Health FSA balance rollover feature, you can reduce participants’ fear of losing money and encourage employees to contribute more dollars into their Health FSAs, saving you and employee tax dollars along the way.  

Broadly analyzed data suggests that employers who implemented the rollover last year averaged an increase in participation of around 10%.  Increases were particularly strong when employers took efforts to educate employees about the “safety net” the rollover provides.  

In addition to seeing a strong impact on participation, we've received welcome clarification on some of the key questions raised after the original rollover guidance was issued.  

1.    Interaction with eligibility for HSA’s: It’s long been clear that participation in a Health FSA will interfere with an individual’s eligibility to participate in a Health Savings Account.  In the first quarter of 2014, the IRS issued guidance confirming that rolling funds forward would constitute disqualifying participation in a Health FSA.  However, they offered two plan design possibilities to alleviate the problem.  Plans can be structured so the rollover funds automatically convert to a limited-purpose FSA for participants choosing the employers HSA-qualified plan, or to allow participants to voluntarily opt out of the rollover funds.  

2.    Rollover minimum: While no specific guidance has been issued, informal comments from IRS officials have indicated that structuring a minimum dollar threshold into the rollover would be acceptable.  This can prevent minimal balances from rolling over year after year, for a participant who may not want or need the funds.  Rather than paying for administrative fees for such a minimal account, employers can amend the plan so that the rollover only applies to substantial balances.  

Next Steps:
To view a comparison of the rollover feature to the longer standing grace period feature, click here.  If you want to take advantage of this rollover feature, of if you’re not sure whether your existing plan takes advantage of the HSA compatibility features or the rollover minimum, contact BPC via email or 800-355-2350.

Posted on December 9, 2014 .