by admin | Sep 15, 2017 | COBRA, ERISA, Group Benefit Plans
The DOL issued guidance for employee benefit plans, plan sponsors, and employers located in a county identified for individual assistance by the Federal Emergency Management Agency (FEMA) due to Hurricane Harvey.
Because plan participants and beneficiaries may have difficulty meeting deadlines for filing ERISA benefit claims and making COBRA elections, the DOL advised plan sponsors to “act reasonably, prudently, and in the interest of the workers and their families who rely on their health plans for their physical and economic well-being. Plan fiduciaries should make reasonable accommodations to prevent the loss of benefits in such cases and should take steps to minimize the possibility of individuals losing benefits because of a failure to comply with pre-established timeframes.”
The DOL acknowledged that group health plans may not be able to timely and fully comply with deadlines due to a physical disruption to a plan’s principal place of business. The DOL’s enforcement approach will emphasize compliance assistance, including grace periods and other relief as appropriate.
By Danielle Capilla
Originally Published By United Benefit Advisors
by admin | Jul 20, 2017 | Benefit Management, ERISA
UBA’s compliance team leverages the collective expertise of its independent partner firms to advise 36,000 employers and their 5 million employees. Lately, a common question from employers is: If a health and welfare benefit plan has fewer than 100 participants, then does it need to file a Form 5500?
If a plan is self-funded and uses a trust, then it is required to file a Form 5500, no matter how many participants it has.
Whether the plan must file a Form 5500 depends on whether or not the plan is “unfunded” (where the money comes from to pay for the self-funded claims).
Currently, group welfare plans generally must file Form 5500 if:
- The plan is fully insured and had 100 or more participants on the first day of the plan year (dependents are not considered “participants” for this purpose unless they are covered because of a qualified medical child support order).
- The plan is self-funded and it uses a trust, no matter how many participants it has.
- The plan is self-funded and it relies on the Section 125 plan exemption, if it had 100 or more participants on the first day of the plan year.
There are several exemptions to Form 5500 filing. The most notable are:
- Church plans defined under ERISA Section 3(33)
- Governmental plans, including tribal governmental plans
- Top hat plans which are unfunded or insured and benefit only a select group of management or highly compensated employees
- Small insured or unfunded welfare plans. A welfare plan with fewer than 100 participants at the beginning of the plan year is not required to file an annual report if the plan is fully insured, entirely unfunded, or a combination of both.
A plan is considered unfunded if the employer pays the entire cost of the plan from its general accounts. A plan with a trust is considered funded.
For smaller groups that are self-funded or partially self-funded, you’d need to ask them whether the plan is funded or unfunded.
If the employer pays the cost of the plan from general assets, then it is considered unfunded and essentially there is no trust.
If the employer pays the cost of the plan from a specific account (in which plan participant contributions are segregated from general assets), then the plan is considered funded. For example, under ERISA, pre-tax salary reductions under a cafeteria plan are participant contributions and are considered plan assets which must generally be held in trust based on ERISA’s exclusive benefit rule and other fiduciary duty rules.
By Danielle Capilla
Originally Posted By www.ubabenefits.com
by admin | Jun 1, 2017 | Benefit Management, ERISA, HSA/HRA, IRS
Certain small employers have the option to reimburse individual health coverage premiums up to a dollar limit through Qualified Small Employer Health Reimbursement Arrangements (QSE HRAs) under the 21st Century Cures Act (Cures Act).
The Cures Act amends the Employee Retirement Income Security Act of 1974 (ERISA) to exclude QSE HRAs from the ERISA definition of group health plan; however, the Cures Act does not specifically exclude QSE HRAs from the rest of ERISA.
Small employers that plan to offer QSE HRAs should be cautious before presuming that ERISA would not apply to a reimbursement arrangement. Because QSE HRAs are new, the issue of whether the remainder of ERISA applies to QSE HRAs remains undetermined by an administrative agency or court. In consideration of the limited ERISA group health definition exclusion and the law’s legislative history, a risk-averse small employer should treat a QSE HRA as an employee welfare benefit plan covered under ERISA and comply with applicable ERISA requirements such as having a written plan document and summary plan description as well as following ERISA’s fiduciary and other rules.
Request UBA’s Compliance Advisor, “Qualified Small Employer Health Reimbursement Arrangements and ERISA” for a discussion of ERISA’s definitions of “group health plan,” as well as the law’s legislative history governing exclusions. A small employer who intends to offer a QSE HRA without complying with ERISA’s employee welfare benefit plan requirements should consult with its attorney before proceeding.
By Danielle Capilla
Originally Posted By www.ubabenefits.com
by admin | Jan 18, 2017 | ACA, Compliance, ERISA
Proposed regulations for revising and greatly expanding the Department of Labor (DOL) Form 5500 reporting are set to take effect in 2019. Currently, the non-retirement plan reporting is limited to those employers that have more than 100 employees enrolled on their benefit plans, or those in a self-funded trust. The filings must be completed on the DOL EFAST2 system within 210 days following the end of the plan year.
What does this expanded number of businesses required to report look like? According to the 2016 United Benefit Advisors (UBA) Health Plan Survey, less than 18 percent of employers offering medical plans are required to report right now. With the expanded requirements of 5500 reporting, this would require the just over 82 percent of employers not reporting now to comply with the new mandate.
While the information reported is not typically difficult to gather, it is a time-intensive task. In addition to the usual information about the carrier’s name, address, total premium, and payments to an agent or broker, employers will now be required to provide detailed benefit plan information such as deductibles, out-of-pocket maximums, coinsurance and copay amounts, among other items. Currently, insurance carriers and third party administrators must produce information needed on scheduled forms. However, an employer’s plan year as filed in their ERISA Summary Plan Description, might not match up to the renewal year with the insurance carrier. There are times when these schedule forms must be requested repeatedly in order to receive the correct dates of the plan year for filing.
In the early 1990s small employers offering a Section 125 plan were required to fill out a 5500 form with a very simple 5500 schedule form. Most small employers did not know about the filing, so noncompliance ran very high. The small employer filings were stopped mainly because the DOL did not have adequate resources to review or tabulate the information.
While electronic filing makes the process easier to tabulate the information received from companies, is it really needed? Likely not, given the expense it will require in additional compliance costs for small employers. With the current information gathered on the forms, the least expensive service is typically $500 annually for one filing. Employers without an ERISA required summary plan description (SPD) in a wrap-style document, would be required to do a separate filing based on each line of coverage. If an employer offers medical, dental, vision and life insurance, it would need to complete four separate filings. Of course, with the expanded information required if the proposed regulations hold, it is anticipated that those offering Form 5500 filing services would need to increase with the additional amount of information to be entered. In order to compensate for the additional information, those fees could more than double. Of course, that also doesn’t account for the time required to gather all the data and make sure it is correct. It is at the very least, an expensive endeavor for a small business to undertake.
Even though small employers will likely have fewer items required for their filings, it is an especially undue hardship on many already struggling small businesses that have been hit with rising health insurance premiums and other increasing costs. For those employers in the 50-99 category, they have likely paid out high fees to complete the ACA required 1094 and 1095 forms and now will be saddled with yet another reporting cost and time intensive gathering of data.
Given the noncompliance of the 1990s in the small group arena, this is just one area that a new administration could very simply and easily remove this unwelcome burden from small employers.
By Carol Taylor, Originally published by United Benefit Advisors – Read More
