April 2024 Benefits Buzz: ERISA enforcement results and IRS updates

DOL releases ERISA enforcement results for 2023

The U.S. Department of Labor released the results of the Employee Benefits Security Administration’s enforcement actions for fiscal year 2023.

Through its enforcement of ERISA, EBSA oversees approximately 2.8 million health plans, 765,000 pension plans and 619,000 other welfare benefit plans. According to the audit, these plans cover 153 million workers, retirees and dependents.

In FY 2023, EBSA recovered over $1.4 billion for plans, participants and beneficiaries. Other key enforcement results include:

EBSA closed 731 civil investigations. Of these, 69% resulted in monetary results for plans or other corrective actions.
EBSA referred 50 cases for civil litigation and closed 196 criminal investigations.
EBSA’s criminal investigations led to the indictment of 60 individuals for offenses related to employee benefit plans. This included plan officials, corporate officers and service providers.

EBSA’s enforcement webpage outlines ERISA’s civil violations and criminal provisions, enforcement accomplishments, and national enforcement priorities and projects.

IRS reminder: Health FSAs, HRAs and HSAs cannot pay for personal health and wellness expenses

The IRS issued a bulletin reminding taxpayers that tax-advantaged medical savings accounts such as health flexible spending accounts and health reimbursement arrangements cannot pay for personal expenses for general health and wellness. Similarly, health savings accounts cannot be used to pay for these expenses on a tax-free basis.

The IRS is concerned that taxpayers are being misled by companies that misrepresent when these accounts can reimburse personal expenses.

Health FSAs, HRAs and HSAs can only be used to pay for qualified medical expenses on a tax-advantaged basis. Expenses that are merely beneficial to general health are not qualified medical expenses. The IRS maintains a set of frequently asked questions addressing when costs related to nutrition, wellness and general health are qualified medical expenses. These FAQs clarify that these costs are qualified medical expenses only in very limited circumstances.

Therefore, the IRS cautions taxpayers to beware of companies misrepresenting nutrition, wellness and general health expenses as qualified medical expenses. According to the IRS, some companies mistakenly claim that notes from doctors based merely on self-reported health information can convert nonmedical food, wellness and exercise expenses into qualified medical expenses.

Have questions on April’s Benefits Buzz issue?

If you need more information or guidance, contact TruePlan today. Our team of experts can help you better understand what was covered in this Benefits Buzz issue. To learn more about us, explore our employee benefits and retirement services.

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