Innovative Benefit Planning Blog

DOL Finalizes, Delays 401(k) Fee Disclosure Rules

Posted On: February 10, 2012 | Categorized as: Company News, Retirement Plans

After months of delay, the Department of Labor (DOL) has just released final regulations under Section 408(b)(2) of ERISA, requiring retirement plan service providers to disclose information about their services and fees to plan sponsors.  In doing so, the DOL delayed the effective date of those rules and made minor modifications to them.  The final regulations defer the compliance date from April 1 to July 1, 2012.  As a consequence, plan sponsors will also have more time to comply with the related participant-level fee disclosure rules. In an attempt to arm plan fiduciaries with additional information about the increasingly complex services provided by retirement plan vendors (such as record keepers, third-party administrators, and brokers) and the fees charged for those services, the Section 408(b)(2) regulations impose specific disclosure requirements on those providers.  Under ERISA, fiduciaries must ensure that these arrangements are reasonable, and that only reasonable compensation is paid for…

2012 Fiscal Year Plans Must Adhere to FSA $2,500 Limit

Posted On: February 3, 2012 | Categorized as: Company News, Employee Benefits, Health Care Reform

Though not the norm, some Cafeteria Plans (Section 125 plans) are not calendar year plans but instead are fiscal year plans (e.g. February 1-January 31).  Be careful if this applies to you because if your fiscal year plans include Health Care Spending Accounts (HCSA), then as the plan sponsor, you must institute the $2,500 pre-tax contribution account maximum beginning with the first day of the 2012 fiscal year. The Patient Protection and Affordable Care Act (PPACA) Section 9005 provides the following:  “ if a benefit is provided under a cafeteria plan through employer contributions to a health flexible spending arrangement, such benefit shall not be treated as a qualified benefit unless the cafeteria plan provides that an employee may not elect for any taxable year to have salary reduction contributions in excess of $2,500 made to such arrangement, for any taxable year beginning after December 31, 2012”.  The potential trap…

HHS Secretary Announces One-Year Delay for Nonprofits with Religious Beliefs in Complying with No-Cost Women’s Preventive Services

Posted On: January 24, 2012 | Categorized as: Company News, Employee Benefits, Health Care Reform

After receiving comments on the interim final rule requiring most health insurance plans to cover preventive services for women including recommended contraceptive services without copays, coinsurance or deductibles, Health and Human Services (HHS) Secretary Kathleen Sebelius announced that nonprofit employers who, based on religious beliefs, do not currently provide contraceptive coverage, will be given an additional year, until Aug. 1, 2013, to comply with the new law. HHS also released an amendment to the prevention regulation that allows religious institutions that offer insurance to their employees the choice of whether or not to cover contraception services.  This regulation is modeled on the most common accommodation for churches available in the majority of the 28 states that already require insurance companies to cover contraception.  The full text can be found at: HHS welcomes comment on this policy; comments are due on or before Sept. 30, 2012. For more information on…

IRS Releases 2011 Form 8941 and Instructions for Claiming

Posted On: January 24, 2012 | Categorized as: Company News, Employee Benefits

The IRS has released the 2011 version of Form 8941, which is used by eligible small employers to calculate their health care tax credit.  Once calculated, the tax credit is claimed as a general business credit on Form 3800 (or by tax-exempt small employers as a refundable credit on Form 990-T).  As background, employers with fewer than 25 employees and average annual wages of less than $50,000 per employee that offer health insurance coverage under a qualifying arrangement may qualify for a tax credit of up to 35 percent of the non-elective contributions they make toward premium cost.  A qualifying arrangement is generally one under which the employer contributes a uniform percentage of at least 50 percent of the premium cost for employees. Form 8941 has been shortened for 2011 to remove the reporting of carry-forwards, carry-backs, and passive activity limitations for this credit, which are now reported on Form…

More IRS Guidance On W-2 Reporting of Health Coverage

Posted On: January 20, 2012 | Categorized as: Company News

Overview of Reporting Requirement Before addressing the recent guidance, it is worth noting some key points that have not changed.  For instance, this reporting requirement remains optional for 2011, but then required for 2012. Also preserved is a postponement of this requirement for "small" employers.  Any employer that is required to issue fewer than 250 W-2s for 2011 (or that would have been required to issue fewer than 250 W-2s had it not engaged an agent to handle this reporting) qualifies for this postponement.  The soonest such a small employer might be required to report the value of its employees' health coverage is January of 2014 (on the 2013 W-2). Once this reporting requirement does apply, the value of employer-sponsored health coverage is to be reported in Box 12 of the W-2, using the code "DD."  Finally, this latest Notice reemphasizes that nothing in this new reporting requirement will cause…

Do You Like To Eat Out?

Posted On: January 12, 2012 | Categorized as: Company News

Our own Terriann Procida is Chairperson for this year's Samaritan Healthcare & Hospice Gala taking place February 25th in Mt. Laurel, NJ.  As part of the fundraiser we are selling raffle tickets for $5 to win 12, $200 Gift Certificates to the following restaurants:  Amada, Brio, Caffe Aldo Lamberti, Cafe Madison, Cuba Libre, Luke Palladino's, McCormick's & Schmicks, Ponzio's, Seasons 52, Stephen Starr Restaurants, Villagio Italian Restaurant and Wolfgang Puck.  This is a great way to support a great cause so let us know how many you would like!  If you would like to donate anything for the Silent Auction at the Gala please let us know and we would be happy to come pick it up!

IRS Issues Additional Guidance on Form W-2 Health Care

Posted On: January 6, 2012 | Categorized as: Company News, Health Care Reform

The U.S. Internal Revenue Service (IRS) has issued Notice 2012-9 to provide additional guidance on the informational reporting to employees of the cost of their employer-sponsored group health plan coverage on Form W-2.  The IRS requested public comments on the W-2 reporting requirement in Notice 2011-28. Notice 2012-9 responds to these comments and amends, restates and supersedes Notice 2011-28.  Specifically, the new notice includes guidance on the W-2 reporting as it relates to small employers, flexible spending accounts, dental and vision plans, COBRA and health reimbursement arrangements. Health care cost information will have to be reported on 2012 W-2s, which will be issued in 2013. Under previous IRS guidance, smaller employers -- those that distribute fewer than 250 W-2s in 2011 -- are exempt from this requirement until at least 2014 and possibly longer. The latest guidance, released Tuesday, makes clear that employers can -- but are not required to…

Soup’s On!

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

Several studies show that soup eaters end up weighing less than those who don’t eat much soup, according to Penn State nutrition professor Barbara Rolls, co-author of “Volumetrics: Feel Full on Fewer Calories.” "Incorporating soups into a weight-management plan can really help save calories," she notes. She also likes it as a snack: "When you get the munchies, it's much better to have some soup than to go to the candy machine." Soup Studies The soup effect has been demonstrated again and again over the past 30 years: • In a 1980s University of Pennsylvania study, 500 people in a weight-loss program noted each meal they ate for 10 weeks. Some were told to eat soup at least four times a week. The soup eaters ate fewer calories -- on average, 100 less per day -- and lost the most weight. • In a Baylor University College of Medicine study, Dr. John…

Final Rule for CO-OPs – Highlights

Posted On: December 19, 2011 | Categorized as: Company News, Health Care Reform

On Dec. 8, the Centers for Medicare and Medicaid Services (CMS) released the Final Rule produced by the Department of Health and Human Services (HHS) to establish the Consumer Operated and Oriented Plan (CO-OP) Program under Section 1322 of the Patient Protection and Affordable Care Act (PPACA).  The following are some of the highlights: "Substantially All" Requirement: -The Final Rule confirms that many larger employers will be able to participate in CO-OPs by permitting up to one-third of all CO-OP contracts to be purchased by such large employers.  It provides that Section 1322's requirement that "substantially all" health insurance issued by the CO-OP is placed in the individual and small group markets is satisfied where two-thirds of its contracts are in those markets.  The Final Rule confirms also that the two-thirds standard applies to all of the activities in the CO-OP, an interpretation that HHS believes properly encourages providers who…

Essential Health Benefits: HHS Informational Bulletin

Posted On: December 19, 2011 | Categorized as: Company News, Health Care Reform

On Dec. 16, the Department of Health and Human Services (HHS) issued a bulletin outlining the approach (and proposed policies) that HHS intends to pursue in rulemaking to define essential health benefits.  The bulletin can be found at

Early Retiree Reinsurance Program Wrapping Up

Posted On: December 14, 2011 | Categorized as: Company News

The Early Retiree Reinsurance Program will cease to be operational in short order.  The $5 billion program was created in July of 2010 to help offset employer costs associated with providing health coverage benefits to early retirees and their eligible spouses, surviving spouses, and dependents.  From the get-go, experts predicted that the program would exhaust its funding quickly, and that is exactly what occurred.  With the reinsurance funds depleted, it is expected that the Dec. 13 edition of the Federal Register will include an announcement that HHS will not accept claims incurred after Dec. 31, 2011.

HHS Releases FAQs on Implementation of Exchanges, Including Issues Raised by Federally Facilitated Exchanges

Posted On: December 13, 2011 | Categorized as: Company News, Health Care Reform

On Nov. 29, HHS released 13 Q&As addressing implementation issues for state and federally facilitated Exchanges.  The Q&As cover a range of topics including funding responsibility and resources, information exchanges through federally managed data "hubs," and shared eligibility verification services.  Among them are Q&As focused on issues raised by federally facilitated Exchanges, highlighted below. 1)One Q&A addresses the coordination of federally facilitated Exchanges and state insurance departments.  The Q&A explains that HHS intends to work with states to preserve the traditional responsibilities of state insurance departments (e.g., licensure, solvency, and network adequacy standards) when establishing a federally facilitated Exchange. 2)A second Q&A raises issues regarding eligibility determinations made by state versus federally facilitated Exchanges.  It concludes that the proposed Exchange rules currently do not distinguish between a state-established Exchange and a federally facilitated Exchange, but based on comments it has received, HHS intends to modify the rules to permit additional…

W-2 Reporting Requirements

Posted On: December 8, 2011 | Categorized as: Company News, Health Care Reform

Requires all employers (including government entities) to include the aggregate cost (whether paid by the employer or the employee) of employer-sponsored health benefits on the employees' annual Form W-2. The specific value attributable to each benefit is not required. If an employee receives health insurance coverage under multiple plans, the employer must disclose the aggregate value of all such health coverage. The coverage costs that must be reported (whether under an insured or self-insured plan) include: o Medical plans o Prescription drug plans o Dental and Vision plans (unless they are each stand-alone plans) o Executive physicals o On-site clinics if they provide more than "de minimis" care (example: an on-site nurse who provides only emergency services) o Medicare supplemental policies o Employee assistance programs Not required to be reported:   o Long-term care, accident, or disability income benefits o Specific disease or illness policies, and hospital or other indemnity…

CMS Releases PPACA Medical Loss Ratio Requirements Including Group Health Plan Rebate Provisions

Posted On: December 8, 2011 | Categorized as: Company News

On Dec. 2, the Centers for Medicare & Medicaid Services (CMS) issued a final regulation that will ensure health insurance companies spend at least 80 percent of consumers' health insurance premiums on medical care, not income, overhead and marketing. Insurance companies that fail to meet the new standard are required to provide a rebate to consumers. MLR rules under the Patient Protection and Affordable Care Act (PPACA) took effect on Jan. 1, 2011, but the new final rule makes modifications and provides certainty to how the medical loss ratio (MLR) is calculated. These modifications are based on public comments solicited in an earlier version of the rule published by CMS in the spring. The modifications made in the new rule (effective date of Jan. 1, 2012): • Rather than having insurers send checks that could be taxed, workers in group health plans can receive rebates tax-free. • The new regulation proposes that…

Before You Go: Healthy Travel Tips

Posted On: December 4, 2011 | Categorized as: Company News, Workplace Wellness

Need a Flu Shot? With all that’s going on at this time of year, getting vaccinated against seasonal flu may be the last thing on your mind. But you don’t want to come down with the flu when you’re away from home. And you certainly don’t want to spread the flu to more vulnerable family members. The Centers for Disease Control and Prevention recommends that everyone six months and older get a flu vaccine. Many pharmacies offer flu shots on a walk-in basis. Bring Your Insurance I.D. Card Check your wallet now to prevent anxiety later. If you can’t find your card, try to print one out from your insurer’s website. Make sure you’re also carrying information about your prescription drug plan. Make a List of Your Current Medications Ideally, you should bring all your bottles with you. That way, if you end up in the emergency room and are…

Fiduciary Luncheons A Success Again!

Posted On: November 23, 2011 | Categorized as: Company News, Retirement Plans

Innovative would like to thank all of our guests that attended the Fiduciary Luncheons that we hosted last week in Princeton, Parsippany and Philadelphia.  Innovative’s own Mark Sulpizio, Accredited Investment Fiduciary®, discussed the impact of the new 408(b)(2) and 404(a) fee disclosure regulations.  Mark also touched on what fiduciary best practices employers need to implement now in order to properly address employee questions next April when the regulations go into effect.  If you were unable to attend but are interested in learning more about 408(b)(2) and 404(a) please contact us at 856-786-4300.  We would be happy to schedule time to meet with you to review these important new regulations and what they mean to you.

Employer Health Care Reform Law Communication Mandate Delayed

Posted On: November 22, 2011 | Categorized as: Company News, Health Care Reform

Employers have more time to comply with rules dictated by the health care reform law that will require them to revamp how they communicate and explain their health care plans.  In a notice published Nov. 17, the Department of Labor (DOL) said the reporting requirements would not go into effect until after final rules are published.   "It is anticipated that regulations, once issued, will include an applicability date that gives group health plans and health insurance issuers sufficient time to comply," the Labor Department said. At the time the proposed rules were issued by the Health and Human Services (HHS), Labor and Treasury departments, federal regulators said they would go into effect on March 23, 2012.  Among other things, the proposed rules would require employers to provide employees with an "easy-to-understand" summary of benefits and coverage (SBC) and, upon request, a glossary of commonly used health care coverage terms,…

NJ Posting and Notification Requirements for Employers

Posted On: November 21, 2011 | Categorized as: Company News, Health Care Reform

The NJ Department of Labor and Workplace Development issued a new regulation concerning employer obligations and their record keeping.  For employees hired after November 7, 2011 a written copy of the form notification of these regulations must be distributed at the time of hiring.  For existing employees a document must be posted in a conspicuous location and distributed to all employees by December 7, 2011.  This document serves as a notification that employers must maintain and report records regarding wages, benefits, taxes and other contributions and assessments under New Jersey's wage, benefit and tax laws.   Summarized in the notification are the record-keeping requirements under the following New Jersey statutes:  the Wage Payment Law, the Wage and Hour Law, the Unemployment Compensation Law, the Prevailing Wage Act, and the Gross Income Tax Act.   Important to note, in the event that an employer has an internet or intranet site to…

Health Law May Undermine Marriage

Posted On: November 10, 2011 | Categorized as: Company News

The health reform law could undermine marriage because once people tie the knot, they may no longer be eligible for tax incentives for insurance.  The law links the tax credit to household income, so two people whose combined income goes above a certain level will not be able to get a tax credit if they are married and file together.  But if they get divorced or stay single they might, individually, be eligible for a premium credit.  Giving people pause about marriage could be a big "unintended consequence" of the law. Under the law, families as well as individuals can qualify for subsidies on a sliding scale, up to 400 percent of the poverty level.  The proposed rule issued by the administration disqualifies a family from claiming the credit if either spouse is offered an insurance plan at work with an out-of-pocket premium less than 9.5 percent of household income…

Year-End Notices for Retirement Plans

Posted On: November 4, 2011 | Categorized as: Company News, Retirement Plans

There are a series of notices regarding retirement plans that must be provided to participants as the end of 2011 approaches. Included in these notices are the following: 1)If a plan sponsor makes “safe harbor” 401(k) contributions, the plan sponsor must provide the participants with a safe harbor notice at least 30 (but not more than 90) days prior to the beginning of the plan year. 2) If a plan includes “automatic enrollment”, a participant must receive a notice of the automatic enrollment before the participant is initially enrolled in the plan and again on an annual basis.  The notice should explain that, in the absence of an affirmative election, the plan will make automatic deferrals on behalf of the participant into specified investments.  It should also contain all other pertinent information regarding the right to stop or change deferrals and investments.  The annual notice must be provided at least…

Need a custom plan designed for your team?

Schedule a Consultation

Contact Us Now To Get Your Business Covered