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 .

BPC Partners with a Robust Banking Platform for HSA Administration

BPC Partners with Avidia Bank for HSA Administration

Pairing a Health Savings Account (HSA) with a Qualified High Deductible Health (QHDHP) plan can help an employer’s bottom line, while giving employees more control of their health and well-being.  HSAs are part healthcare account and part retirement account.  Taking the best of both areas, a properly utilized HSA will provide a triple tax benefit, surpassing almost any retirement account on the market.  Funds put into an HSA will go in tax-free, grow tax-free, and provided the funds are eventually used for qualified medical expenses, they will also be disbursed tax-free. 

Many banks provide HSAs, but they don’t always have the deep regulatory understanding needed to guide accountholders through the complexities of managing their HSA properly.  That’s why BPC has partnered with Avidia Bank to seamlessly integrate their robust banking platform with BPC’s compliance and administration services.

BPC’s team of certified Flexible Compensation Specialists guide clients and participants through what it takes to be eligible for an HSA, how much they can contribute to an HSA, what they can use the funds to purchase, and much more.  From videos, to print materials, to online decision support calculators, BPC has a wealth of HSA-focused educational resources and can help you map out a specific educational strategy to bring your employees up to speed.

Participants will have real-time access to account balances and transaction history, control investment options, set up online bill payments, and view monthly statements through BPC’s website and mobile app.  When employers offer additional reimbursement accounts, such as a limited-purpose FSA, BPC can drive all transactions for the participant from a single debit card, with all activity available on a single web portal. 

Thanks to BPC’s partnership with Avidia, 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. 

Employers benefit by keeping your costs down, while giving employees increased control and understanding over their healthcare decisions.  If you’re interested in taking advantage of this exciting partnership, contact BPC at 800-355-2350 or emailing us.

Posted on December 9, 2014 .