Skip to main content

April 2024 Benefits Buzz: ERISA enforcement results and IRS updates

April 2024 Benefits Buzz ERISA Enforcement Results

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

© 2024 Zywave, Inc. All rights reserved. 

Popular posts from this blog

What are Alternative Investments? 4-Part Introduction

The market has seen a lot of uncertainty in recent years. Because of this, many organizations are looking for new ways to diversify their investment portfolios. Our best-kept “not-so-secret” secret: alternative investments. In this blog, we'll explore alternative investments with a focus on how they can potentially shield your portfolios from downside market volatility. In addition, we'll break down its benefits and risks and whether it could be a good fit for you. Part 1: What are alternative investments? Alternative investments may help diversify your investment portfolios through non-traditional investment strategies. Non-traditional investment options have varying liquidity ranges depending on the strategy and fund structure. Alternative investments are sometimes referred to as alternative assets. According to the Harvard Business School , the seven types of alternative investments are: private equity; private debt; hedge funds; real estate; commodities; collectibles; and s

Section 125 – Cafeteria Plans Overview

A Section 125 plan, or cafeteria plan , allows employees to pay for certain benefits on a pre-tax basis. Employers use these plans to provide their employees with a choice between cash and certain qualified benefits without adverse tax consequences. Paying for benefits on a pre-tax basis reduces the employee’s taxable income and, therefore, reduces both the employee’s and the employer’s tax liability. To receive these tax advantages, a cafeteria plan must comply with the rules of Section 125 of the Internal Revenue Code and related IRS regulations. Under these rules, a Section 125 plan must have a written plan document and can only offer certain qualified benefits on a tax-favored basis. Once an employee makes a Section 125 plan election, they may not change that election until the next plan year, unless the employee experiences a permitted election change event. Also, for highly compensated employees to receive the tax advantages associated with a Section 125 plan, the plan must pass

5 Top reasons to offer employee mental health benefits

In fast-paced and demanding work environments, the importance of employee mental health benefits cannot be overstated. Employees who are mentally well are more productive, engaged and satisfied with their jobs. Mental health treatment, including therapy, medication and self-care, can help people who are experiencing mental illness. However, taking that first step toward recovery or seeking help can be challenging. The National Alliance on Mental Illness’ Mental Health By the Numbers finds that the average delay between the onset of mental health symptoms and treatment is 11 years. Factors such as cost, access and stigma can hold workers back from receiving the mental health support and treatment they need. However, there are employer solutions that can help employees overcome these barriers, understand available treatment options and start their recovery journey. This article explores barriers to mental healthcare and ways employers can help break them down to support employees holist