The Internal Revenue Service (IRS) has recently released the contribution limits on Qualified Retirement Plans for 2014. HANYS Benefit Services created the attached chart that details these contribution limit increases. If you have any questions about the COLA Limits, or would like to speak with an advisor about reviewing or establishing a plan, please contact us at (800) 388-1963 or via e-mail at hbs@hanys.org .
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Defined contribution plans are and will continue to be a mainstay in the market. But, are they working? Improving Participant Outcomes: An Action Plan for Plan Sponsors looks at some of the factors that plan sponsors should consider when assessing the value of the retirement plan offered to their employees. It also considers steps they can take to provide greater assurance that employees will be able to generate sufficient income on which to retire. According to the Investment Company Institute’s 2013 Investment Company Fact Book, at year end 2012, there was approximately $5.1 trillion invested in defined contribution retirement plans in the United States. Recent regulatory changes have placed even greater responsibility on plan sponsors, including heightened fiduciary responsibilities, fee disclosures, and expanded audit and reporting requirements. However, little has been done to ensure participants are any more prepared to retire. Are these defined contribution retirement plans...
Defined contribution plans are and will continue to be a mainstay in the market. But, are they working? Improving Participant Outcomes: An Action Plan for Plan Sponsors looks at some of the factors that plan sponsors should consider when assessing the value of the retirement plan offered to their employees. It also considers steps they can take to provide greater assurance that employees will be able to generate sufficient income on which to retire. According to the Investment Company Institute’s 2013 Investment Company Fact Book, at year end 2012, there was approximately $5.1 trillion invested in defined contribution retirement plans in the United States. Recent regulatory changes have placed even greater responsibility on plan sponsors, including heightened fiduciary responsibilities, fee disclosures, and expanded audit and reporting requirements. However, little has been done to ensure participants are any more prepared to retire. Are these defined contribution retirement plans...
Earlier this year, the Internal Revenue Service (IRS) announced that its Employee Plans Compliance Unit (EPCU) would begin a compliance check of certain 457(b) plans maintained by non-governmental, tax-exempt entities. These plans, commonly referred to as “Top Hat” plans, are frequently offered by tax-exempt organizations in addition to other qualified retirement plans. The good news is that the extent of the compliance check is fairly limited. Letters and a questionnaire will be sent to 200 tax-exempt organizations in fiscal year 2013, and another 200 will be sent in fiscal year 2014. Employers will be selected for review based on information contained on 2011 Form W-2 and Form 990. If you receive a compliance check letter from the IRS, it is important that you respond in a timely fashion (15 days from the date of the letter) and provide the requested information. Although responding to the questionnaire is voluntary, failure to do so may result in the IRS initiating an audit of...
Earlier this year, the Internal Revenue Service (IRS) announced that its Employee Plans Compliance Unit (EPCU) would begin a compliance check of certain 457(b) plans maintained by non-governmental, tax-exempt entities. These plans, commonly referred to as “Top Hat” plans, are frequently offered by tax-exempt organizations in addition to other qualified retirement plans. The good news is that the extent of the compliance check is fairly limited. Letters and a questionnaire will be sent to 200 tax-exempt organizations in fiscal year 2013, and another 200 will be sent in fiscal year 2014. Employers will be selected for review based on information contained on 2011 Form W-2 and Form 990. If you receive a compliance check letter from the IRS, it is important that you respond in a timely fashion (15 days from the date of the letter) and provide the requested information. Although responding to the questionnaire is voluntary, failure to do so may result in the IRS initiating an audit of...
The Employee Retirement Income Security Act of 1974 (ERISA) sets the minimum standards for pension plans in the private industry. ERISA also requires accountability of plan fiduciaries which generally would include plan trustees, plan administrators, and members of the plan’s investment committee. The primary responsibility of fiduciaries is to run the plan solely in the interest of participants and beneficiaries and for the exclusive purpose of providing benefits and paying plan expenses. Fiduciaries must act prudently and must diversify the plan’s investments in order to avoid large losses. Fiduciaries who do not follow these principles of conduct may be personally liable to restore any losses to the plan, or to restore any profits made through improper use of plan assets. Recent court cases, most notably Tibble v Edison and Tussey v ABB, Inc. have made clear that plan fiduciaries will be held liable when they fail to meet their fiduciary responsibilities. In the Tussey case the plan...
The Plan Sponsor Council of America (PSCA) recently released the 2013 403(b) Plan Survey. The survey showed that 73.6% of plans offer target date funds (TDF) as an investment option. Similar findings were noted for 401(k) plans. Additionally, many plan sponsors have identified TDFs as their plan’s qualified default investment alternative (QDIA). Target date funds can be an attractive investment option for employees who do not want to actively manage their retirement portfolio. The inflow of monies into TDFs in recent years reflects the growing popularity of these types of investments. Employers and plan fiduciaries have an obligation to prudently select and monitor the investments offered in their retirement plan . Although all TDFs have similar characteristics, regardless of the investment provider, there are several differences that can significantly affect the way a TDF performs. It is important that fiduciaries understand these differences when deciding which TDF is appropriat...
This article sets out Questions and Answers regarding Health Savings Accounts (HSAs), as provided by the Internal Revenue Service (IRS) in Notice 2008-59 . The Notice addresses the following topics related to HSAs: Important definitions Distributions from HSAs Eligible individuals Prohibited transactions High deductible health plans (HDHPs) Establishing an HSA Contributions to HSAs Administrative fees Please read below for more information. Note : For 2014, the HSA annual contribution limit is $3,300 (up from $3,250 for 2013) for self-only HDHP coverage or $6,550 (up from $6,450 for 2013) for family HDHP coverage. To qualify as an HDHP for 2014, the annual deductible must be at least $1,250 for self-only coverage or $2,500 for family coverage, the same annual deductible as for 2013. For 2014, the maximum annual out-of-pocket expenses for HDHP coverage may not exceed $6,350 (up from $6,250 for 2013) for self-only coverage or $12,700 (up from $12,500 for 2013) for family coverage. D...
Beginning in 2014, the Affordable Care Act (ACA) requires health plans offered through an Exchange, or qualified health plans (QHPs), to meet certain levels of actuarial value. ACA’s required actuarial value levels are referred to as “ metal levels ”—bronze, silver, gold and platinum. ACA’s metal levels are intended to allow consumers to compare plans with similar levels of coverage in order to help them make informed decisions about their health insurance coverage. Since coverage will be similar for all plans in a metal tier (for example, all silver plans), consumers can focus on other plan factors, such as the premium and network of providers, when selecting a health plan. QHP issuers must offer at least one plan in the silver level and one plan in the gold level through the Exchanges. Outside of the Exchanges, non-grandfathered plans in the individual and small group markets must offer coverage that matches up to the metal levels. Actuarial Value Actuarial value is calculated as the...
The Obama Administration has postponed the Affordable Care Act (ACA) employer mandate penalties for one year, until 2015. The Department of the Treasury announced the delay on July 2, 2013, along with a similar delay for information reporting by employers, health insurance issuers and self-funded plan sponsors. The delay does not affect any other provision of the ACA, including individuals’ access to premium tax credits for coverage through an Exchange. The Treasury plans to issue more formal information about the delay within a week. ONE-YEAR IMPLEMENTATION DELAY The employer mandate provisions of the ACA are also known as the employer shared responsibility or pay or play rules. These rules impose penalties on large employers that do not offer affordable, minimum value coverage to their full-time employees and dependents. They were set to take effect on Jan. 1, 2014. According to the Treasury, the delay of the employer mandate was required because of issues related to the reporting re...
The Affordable Care Act (ACA), which was signed into law in March 2010, put in place comprehensive health coverage reform, with effective dates spread out over a period of four years and beyond. Some of ACA’s reform initiatives are already in effect for employers and their group health plans, such as the Form W-2 reporting requirement for large employers and the requirement for non-grandfathered health plans to cover certain preventive care services without cost-sharing. Many of ACA’s key reform initiatives will become effective in 2014 . Key ACA reforms that will affect employers in 2014 include health plan design changes, increased wellness program incentives, a new reinsurance fee, the employer “pay or play” mandate, and additional reporting requirements. To prepare for this next phase of ACA reform, employers should review upcoming requirements and make sure they have a compliance strategy in place. This Legislative Brief provides a health care reform compliance checklist for 2014...
Beginning January 1, 2014, individuals and employees of small businesses will have access to insurance coverage through the Affordable Care Act’s (ACA) health insurance exchanges (Exchanges). Open enrollment under the Exchanges will begin October 1, 2013. ACA requires employers to provide all new hires and current employees with a written notice about ACA’s Exchanges. This requirement is found in Section 18B of the Fair Labor Standards Act (FLSA). On May 8, 2013, the Department of Labor (DOL) released Technical Release 2013-02 to provide temporary guidance on the Exchange notice requirement. This temporary guidance will remain in effect until DOL issues regulations or other guidance. According to DOL, future regulations or other guidance will provide employers with adequate time to comply with any additional or modified requirements. In connection with the temporary guidance, DOL announced the availability of model Exchange notices for employers to use to sa...
The Affordable Care Act (ACA) requires health plans and health insurance issuers to provide a summary of benefits and coverage (SBC) to applicants and enrollees. The SBC is intended to be a short, simple explanation about the health plan’s benefits and coverage than can help consumers more easily compare plan options. On April 23, 2013, the U.S. Department of Labor (DOL), Department of Health and Human Services (HHS), and the U.S. Treasury (the Departments) issued Frequently Asked Questions (FAQs Part XIV) on the SBC requirement for the second year of its applicability. This guidance was provided in addition to the final regulations issued on February 14, 2012 and three prior sets of FAQs related to the SBC rules (FAQs Parts VIII, IX and X). The new FAQs address issues related to providing SBCs in the second year of applicability, including: changes made to the templates for the SBC and the uniform glossary; Transition relief with respect to the minimum essential co...
On May 3, 2013, the Internal Revenue Service (IRS) released a proposed rule on the minimum value and affordability rules under the Affordable Care Act (ACA). In this proposed rule, IRS provides guidance on determining whether health coverage under an employer-sponsored plan is affordable and provides minimum value for purposes of determining the employer “pay or play” penalties. In particular, the proposed regulation: explains how to calculate minimum value (MV); outlines special rules for determining how health reimbursement arrangements (HRAs), health savings accounts (HSAs) and wellness program incentives are counted in determining MV and affordability; and provides new safe harbors for determining MV. This proposed rule would apply for tax years ending after December 31, 2013. Background Effective for 2014, ACA provides premium tax credits and cost-sharing reductions to eligible individuals who purchase qualified health plan coverage through a Health Insurance Exchange....
The Health Insurance Portability and Accountability Act (HIPAA) of 1996 is a broad federal law regarding health coverage. It contains provisions related to administrative simplification, including: privacy and security of personally identifiable health information (privacy and security rules); enforcement of HIPAA requirements, including investigations, hearings, and penalties for violations (enforcement rule); and reporting requirements for breaches of unsecured protected health information (breach notification rule). HIPAA’s administrative simplification rules generally apply to health care providers, health plans, and health care clearinghouses (covered entities). In 2009, the Health Information Technology for Economic and Clinical Health (HITECH) Act was enacted as part of the American Recovery and Reinvestment Act. The HITECH Act strengthened the enforcement of HIPAA’s administrative simplification provisions. On January 17, 2013, the U.S. Department of Health and Human Services ...
On February 6, 2013, the U.S. Department of Labor (DOL) marked the 20th anniversary of the signing of the Family and Medical Leave Act (FMLA) by releasing a set of final FMLA regulations . The final regulations, which become effective on March 8, 2013, implement two statutory expansions of FMLA leave protections. According to DOL: The first expansion provides families of eligible veterans with the same job-protected FMLA leave currently available to families of military service members, and it enables more military families to take leave for activities that arise when a service member is deployed. The second expansion modifies existing rules so that airline personnel and flight crews are better able to make use of FMLA protections. In connection with the final regulations, DOL indicated that it updated some of its model FMLA forms, including the model FMLA poster. The model FMLA forms are available on the DOL’s FMLA Web page . Prior to the regulations’ effective date, em...