BPC has carefully monitored the regulations surrounding ACA reporting as they have developed over the past several years. This fall, the IRS finalized forms and instructions related to ACA reporting, and we want to take a moment to detail how your account-based health plans (HRAs, FSAs, and HSAs), and COBRA coverage, could impact your reporting obligations.
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
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
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
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
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
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
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.
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.
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.
The IRS released 2015 annual inflation adjustments for various tax benefits including Flexible Spending Accounts. Of particular note for BPC clients, was a move to raise the Health FSA employee contribution limit for 2015 up to $2,550. That’s a $50 increase over the 2013 and 2014 limit of $2,500.
Depending on your plan document language, this change may or may not automatically apply to your plan for 2015. It’s important to be aware of whether or not it does, because the plan document will control what should be reflected on enrollment materials and other communications to your employees.
If your plan document states the annual limit for the Health FSA is $2,500, but will automatically adjust for cost of living increases announced by the IRS, then the new limit will apply to your first plan starting on or after 1/1/2015. If your plan document simply lists a static dollar amount as the limit (whether it’s $2,500 or something lower), then this new limit will only apply if you choose to amend your plan.
If the $2,550 limit applies to your plan already, then revisions to your open enrollment materials may be advisable. If the new limit does not apply yet, but you would like to change it, please contact BPC to request a plan amendment or restatement.
BPC will be happy to work with you to determine where you plan stands currently, and what open enrollment material changes may be needed. Please contact your BPC Representative by phone or email if you have any questions or need assistance. You can also contact an available representative by calling 877-272-8880 or by emailing.