Innovative Benefit Planning Blog

CORRECTING OPERATIONAL MISTAKES CAN ELIMINATE FIDUCIARY LIABILITY

Posted On: November 27, 2012 | Categorized as: Company News, Retirement Plans

Over the past decade, plan sponsors have become familiar with the voluntary correction programs offered by the IRS and Department of Labor, including the Service’s Employee Plans Compliance Resolution System (EPCRS) and the DOL’s Voluntary Fiduciary Correction Program (VFCP).  These programs offer formal ways for sponsors to correct certain administrative errors in the operation of their plans.  Even if employers choose not to avail themselves of these formal programs, however, correcting administrative mistakes can eliminate the risk of fiduciary liability under ERISA. Operational errors in administering a retirement plan not only threaten the plan’s “qualified” status under the Tax Code, but can also result in fiduciary liability under ERISA for those who are responsible for the errors.  One of the primary duties imposed on ERISA fiduciaries is to administer the plan “in accordance with the documents and instruments” governing it.  Failing to do so is a violation of that fiduciary…


Healthy Employees Lead to Wealthy Employees

Posted On: November 20, 2012 | Categorized as: Company News, Employee Benefits, Workplace Wellness

We all know that employer-sponsored wellness programs are effective at extending quality of life by maintaining good health and reducing health risks that can worsen over time. Companies also obtain financials savings from implementing wellness programs. For instance, for every dollar spent on wellness, medical costs are reduced by $3.27 and absenteeism costs are reduced by $2.73. The 2012 UBA Health Plan Survey results show that smart employers are capitalizing on the benefits of wellness programs: Nearly 60% of employers with 1,000 or more employees offer wellness programs and even smaller employers with 50-99 employees showed the largest increase and fastest growth in adopting these programs. Aside from the obvious health benefits and health care cost savings to employers, an employee's wealth can also benefit from personal wellness. Here's how the concept works: • Illness can reduce retirement readiness by increasing the amount of savings that will be needed to…


Critical Amendment Deadline Approaching for Defined Benefit Plans

Posted On: November 18, 2012 | Categorized as: Company News, Retirement Plans

Sponsors of single-employer defined benefit pension plans will need to amend those plans soon to comply with a critical requirement of the Pension Protection Act of 2006 (the PPA).  As explained more fully below, meeting this deadline is crucial because the IRS has conditioned anti-cutback relief on a timely amendment.  If the cutbacks required under the PPA are implemented without a timely amendment, the plan risks disqualification, and the plan sponsor may be liable to participants and beneficiaries. MANDATORY FUNDING-BASED RESTRICTIONS One of the many requirements introduced by the PPA was a new regime of restrictions on benefit accruals under, distributions from, and amendments to certain underfunded defined benefit plans.  These restrictions arise under Section 436 of the Tax Code, a new section added by the PPA.  Under Section 436, a plan's underfunded status triggers the following mandatory cutbacks: If the plan has an adjusted target funding attainment percentage (AFTAP)…


Innovative Welcomes Michelle Bross!

Posted On: November 18, 2012 | Categorized as: Company News

We are so excited to welcome Michelle Bross to the Innovative team!  Michelle comes highly recommended and her extensive background in office administration will be well utilized as Innovative continues to grow.   Best of luck in your new role Michelle!


Health Plan Design Drives Regional Costs

Posted On: November 14, 2012 | Categorized as: Company News, Employee Benefits

United Benefit Advisors (UBA), one of the nation's largest employee benefit advisory organizations, announces more key findings from its 2012 Health Plan Survey. As health care costs continue to increase and recruitment and retention of quality employees becomes more competitive, accurate and detailed benefits benchmarking data is imperative for employee benefits design. Among the trends illuminated in the 2012 United Benefit Advisors Health Plan Survey, the nation's largest health plan benefits benchmarking survey with 11,711 employers responding, one of the most dramatic was the stark difference in plan design across each of the country's five regions -- Northeast, Southeast, North Central, Central and West, and the impact these variances had on plan costs. Notably, the average annual cost for plans in the Northeast is markedly higher than in other regions of the country. The 2012 UBA Health Plan Survey executive summary -- available as a free download -- helps explain…


What Employers Need To Know Right Now About Health Care Reform And What The Election Results Mean For PPACA

Posted On: November 8, 2012 | Categorized as: Company News, Employee Benefits, Health Care Reform

Maintenance of the status quo in Washington, D.C. (the re-election of Barack Obama, with a Republican majority in the House of Representatives and a Democratic majority in the Senate) means that implementation of the Patient Protection and Affordable Care Act (PPACA) will move forward largely as the law was passed in 2010. The law left the task of working out many of the details to the regulatory agencies (the Department of Labor, the IRS and the Department of Health and Human Services), and with many questions remaining unanswered, employers can expect that an enormous number of regulations and other types of guidance will be issued between now and the end of 2013. Of greatest interest to many employers is the employer shared-responsibility (“play or pay”) requirement.  As of Jan. 1, 2014, employers who have 50 or more full-time or full-time equivalent employees must offer “minimum essential” (basic) medical coverage for…


In this Election, Health Care Takes Center Stage

Posted On: November 6, 2012 | Categorized as: Company News, Employee Benefits, Health Care Reform

By Thomas Mangan, CEO, United Benefit Advisors UBA and CFO magazine weigh in on the health insurance exchange market in the face of health care reform. Today marks a historic milestone in the leadership of America as millions of people head to the polls to elect or re-elect our president. Even in spite of the devastation left behind by Hurricane Sandy, voting is a priority on this day and in particular this election year. The resulting impact on our industry will be great; either we will have to fully implement the Patient Protection and Affordable Care Act (a.k.a Obamacare), or we will be figuring out what to do once it is repealed. Either way, the stakes are high and the changes will be intense. One area sparking some controversy has to do with “health insurance exchanges,” a relatively new phrase for a concept that’s been in existence for a while…


The Benefits of Napping

Posted On: November 5, 2012 | Categorized as: Company News, Workplace Wellness

Quick Takes Naptime - Not Just for Toddlers Lions nap, dogs nap, even dolphins take brief naps.  In fact, 85% of all mammal species are polyphasic sleepers, meaning that they sleep for short periods throughout the day.  Generally, humans are monophasic sleepers, meaning we divide the day into two parts, one for wakefulness and one for sleep.  But perhaps we could learn something from our dozing fellow mammals. The Sleep Foundation reports that Americans are becoming more and more sleep deprived.  Roughly 41 million people in the U.S. get six hours or fewer of sleep a night, and that's not enough.  It may be that our busy lifestyle keeps us from getting enough sleep.  But can napping help?  In this month's newsletter, we'll look at the benefits of napping, possible negative effects of napping, learning to power nap, and soothing teas. Napping, wrote James B. Maas, Cornell University sleep expert,…


Play or Pay: Applying the Employer Shared Responsibility Penalties

Posted On: November 1, 2012 | Categorized as: Company News, Employee Benefits, Health Care Reform

PPACA calls for two possible penalties, one for not offering “minimum essential” coverage and a different penalty for offering coverage that is considered inadequate because it is not “affordable” and/or it does not provide “minimum value.” (A)    The “no offer” penalty applies if the large employer does not offer “minimum essential” coverage.  While minimum essential coverage has not been clearly defined, it appears that very basic medical coverage will be enough to meet this requirement.  The agencies have also said that they do not expect to apply the penalty to employers who offer coverage to the vast majority of their employees, but exclude a few for a legitimate business reason or because of an error, but as yet they have provided no details on how this limited exception might work. The “no-offer” penalty is $166.67 per month ($2,000 per year) for each full-time employee who is not offered basic medical…


Play or Pay: How Does an Employer Determine Average Hours Worked?

Posted On: October 29, 2012 | Categorized as: Company News, Employee Benefits, Health Care Reform

An employer may simply look at its population on a current, month by month basis if it wishes to.  However, to avoid the complications that may arise if an employee alternates between working more and less than 30 hours, or to simply reduce calculation frequency,  IRS Notice 2012-58 gives an employer the option of using longer calculation periods to get a smoother, more predictable result if it prefers to do that. If the employer wants to use a smoothing technique, different processes apply to existing and new employees. The calculation option for existing (“ongoing”) employees Instead of tracking time currently, an employer may look at how many hours the employee averaged during a lookback period called a “standard measurement period.” Once the determination is made whether the employee worked full-time during the standard measurement period that determination will apply throughout the related stability period regardless how many hours the employee…


COMPLIANCE ALERT: 2013 Annual Benefit Plan Amounts

Posted On: October 26, 2012 | Categorized as: Company News, Retirement Plans

2013 INFLATION ADJUSTMENTS Following recent announcements by both the IRS and the Social Security Administration, we now know most of the dollar amounts that employers will need to administer their benefit plans for 2013.  Many of the new numbers are slightly higher than their 2012 counterparts. For instance, the annual 401(k), 403(b), or 457(b) deferral limit will increase from $17,000 to $17,500; the Section 415 limit on annual additions to a participant's account will go from $50,000 to $51,000; and the annual compensation limit will increase from $250,000 to $255,000.  (The annual retirement plan catch-up contribution limit -- $5,500 -- will remain unchanged for 2013.) The annual compensation threshold used in identifying highly compensated employees (HCEs) remains unchanged for 2013 (at $115,000).  In identifying HCEs for 2013, employers should consider employees who earned at least $115,000 during 2012 (as well as 5% owners during either 2012 or 2013).  This is…


Play or Pay: How Will An Employer Count Hours?

Posted On: October 23, 2012 | Categorized as: Company News, Employee Benefits, Health Care Reform

It is expected that current DOL rules for counting hours for pension plan purposes will be used to count an employee’s hours of service as a full-time employee or full-time employee equivalent.  Under these rules, a person is considered to have completed an “hour of service” with each hour for which he is paid for work, vacation, holiday, sick time, layoff, jury duty, military duty, etc. When converting time to a monthly basis, 30 hours per week would mean 130 hours per calendar month. The agencies are considering several possible methods of counting hours and have said that they expect that employers will be able to use different counting methods for different classes of employees.  The proposed methods include: •    For employees who are paid hourly, actual hours worked or paid would need to be used •    For employees who are not paid hourly, alternatives would include: Counting actual hours…


COMPLIANCE ALERT! CRITICAL AMENDMENT DEADLINE APPROACHING FOR DEFINED BENEFIT PLANS

Posted On: October 18, 2012 | Categorized as: Company News, Employee Benefits

Sponsors of single-employer defined benefit pension plans will need to amend those plans soon to comply with a critical requirement of the Pension Protection Act of 2006 (the PPA).  As explained more fully below, meeting this deadline is crucial because the IRS has conditioned anti-cutback relief on a timely amendment.  If the cutbacks required under the PPA are implemented without a timely amendment, the plan risks disqualification, and the plan sponsor may be liable to participants and beneficiaries. MANDATORY FUNDING-BASED RESTRICTIONS One of the many requirements introduced by the PPA was a new regime of restrictions on benefit accruals under, distributions from, and amendments to certain underfunded defined benefit plans.  These restrictions arise under Section 436 of the Tax Code, a new section added by the PPA.  Under Section 436, a plan's underfunded status triggers the following mandatory cutbacks: •    If the plan has an adjusted target funding attainment percentage…


The Play or Pay Penalty – How Are Employees Counted Under PPACA?

Posted On: October 16, 2012 | Categorized as: Company News, Employee Benefits, Health Care Reform

Determining how many employees you have is important for several purposes under the Patient Protection and Affordable Care Act (PPACA).  So far, no final rules have been issued, but on Aug. 31, 2012, the regulatory agencies issued safe harbors for 2014 on several key issues. The agencies have also provided some indications of what they are considering on other issues relating to the employee identification issues. The notices (IRS Notice 2012-58 and Notice 2012-59) follow prior thinking on how new and existing (“ongoing”) employees who have a stable work schedule will be handled.  Significant additional flexibility has been provided to those employers with seasonal and variable hours employees, but with the flexibility has come a great deal of complexity.  Many employers will not need to explore all of the available options; therefore, this piece deals with the more straightforward situations first. Details are still needed on several other factors that…


Important Information About New Jersey 51-100 Health Benefits Plans

Posted On: October 15, 2012 | Categorized as: Company News, Employee Benefits

A benefit feature that encourages use of generic drugs will be included in all 51-100 health benefits plans. All Aetna 51-100 new business and renewing plans with December 1, 2012 and later effective dates will include a benefit feature that encourages members to use generic drugs as a first choice. Ultimately, the member has the choice to use a brand or a generic. Below are the two scenarios for members purchasing brand name drugs: 1.)If there is a brand name drug with a generic equivalent but the brand name drug is dispensed and the physician did not specify on the script “Dispense as Written” the member will pay the difference in cost between the brand and generic drug plus the applicable copay or cost sharing required by the plan for the brand name drug dispensed. 2.)If a there is a brand name drug with a generic equivalent but the brand…


Philadelphia Interactive HR Workshop – “Strategies from Industry Leaders in an Era of Change”

Posted On: October 14, 2012 | Categorized as: Company News, Employee Benefits

Please join Innovative at the Ultimate Software interactive HR workshop. Innovative's own Terriann Procida will be featured speaking about how to uncover the hidden risk in your benefit package through advanced analytics and predictive modeling. Your company needs a skilled and forward-thinking HR leader more than ever before. So are you developing the innovative programs that will bring success to you, your employees, and your organization? Gain the skills you need to be viewed as a trailblazer during this complimentary Interactive HR Workshop at The Union League in Philadelphia. You'll discover the dynamic HR initiatives other local businesses are undertaking. Date: Monday, November 5, 2012 Time: 8:15 a.m. - 4:45 p.m. (breakfast and lunch provided) Location: The Union League 140 South Broad Street Philadelphia, PA 19102 RSVP: Click here for more information and to register. This workshop is approved for 5.75 HRCI credits and is pending approval from the APA.…


Five Great Whole Grains

Posted On: October 8, 2012 | Categorized as: Company News, Workplace Wellness

This month we’re highlighting five whole grains that have much to offer when it comes to nutrition and flavor. The next time you’re at the supermarket or natural foods store, look for foods made with amaranth, barley, buckwheat, bulgur or quinoa and expand your whole-grain horizons. Barley The Story: Barley is one of the world’s oldest cultivated cereals. It was the chief bread plant of the Greeks and Romans. Barley arrived in America with British and Dutch colonists who used it to make beer. Nutrition: Barley is an excellent source of both insoluble and cholesterol-lowering soluble fiber. Pearl barley is not technically a whole grain (as small amounts of the bran are missing), but it's full of fiber and far healthier than a fully refined grain like white rice. Hulled barley, available at health food stores, retains more of the whole-grain nutrients but is very slow cooking. New varieties of…


United Benefit Advisors Welcomes Terriann Procida as a Board Member!

Posted On: October 2, 2012 | Categorized as: Company News, Employee Benefits

Terriann will be joining the United Benefit Advisors (UBA) Board of Directors effective January 1, 2013.  As one of the nation’s largest employee benefits advisory organizations, UBA is comprised of more than 140 of the most successful and most trusted independent employee benefits advisory firms in North America and Europe.  As a member since July 2005, Innovative has been able to draw from the talents, knowledge, tools and expertise of more than 2,200 benefits professionals through the UBA network, while remaining local and independent.  We are so proud of Terriann and we know that she will be an invaluable asset to the UBA team.  Congratulations Terriann!


Congratulations Liz!

Posted On: September 25, 2012 | Categorized as: Company News

We are proud to announce that today Liz Silver, Innovative's newest Account Manager, passed the third and final test to obtain her RHU designation.  All that hard work paid off Liz!  Congratulations on a great accomplishment!


All That Sneezing Getting You Down?

Posted On: September 19, 2012 | Categorized as: Company News, Workplace Wellness

The weather turns cooler, the leaves turn colors and pumpkins are everywhere.  It’s the perfect time to enjoy the outdoors, unless you suffer from allergies. Are your eyes itchy and watery?  Do you have a runny nose?  Are you coughing?  Does your nose itch?  Do you have dark circles under your eyes?  If you notice these symptoms occurring each year at the end of the summer, chances are you could have fall allergies. The most common allergen at this time of year is the pollen from ragweed which is prevalent from late summer to mid-fall, or until the first frost.  There are several other weeds that can cause allergic reactions as well:  goldenrod, curly dock, lamb’s quarters, pigweed, sheep sorrel and sagebrush.  Outdoor molds are also guilty of causing fall allergy symptoms.  These molds can be found in the leaves that cover the ground after they have fallen from the…


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