Benefits Blog

Among the many benefits-related items on one's year-end to-do list are the mundane but necessary plan document amendments that must or should be adopted by December 31. Here's what's on the list this year:Section 125 Cafeteria Plan Amendments$500 FSA rollever versus 2-1/2 month grace period. FSAs can have one but not both. Amendment must be adopted by end of plan year from which funds will be rolled over, so if you want to allow rollovers from 2014 to 2015, you must amend by December 31, 2014.Exchange-related qualified changes in status. In order to permit a mid-year election change on account of federal or state exchange (i.e., "marketplace") enrollment/disenrollment, the plan doc must state that it is allowed. The IRS expanded the list of status changes, so if you want to allow them, the plan doc needs to be amended. Amendment is technically not required until the end of the year following this change, but why wait?FSA annual contribution limit for 2015.

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If you employ temporary employees or use a temporary staffing firm or PEO, then the ACA shared responsibility (a/k/a pay-or-play) rules present special issues. The trouble results from the IRS' rather unclear application of its multi-factor direction-and-control test for whether there is a common law employer-employee relationship. I've broken down the contingent workforce problem into 4 categories, which are enumerated below. In every case, though, the first issue is....Who Is the Common Law Employer?The IRS' direction-and-control test has more than 20 factors and is stated in a fair amount of detail in IRS Publication 15-A.

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Employers with 100 or more full-time equivalents and a non-calendar plan year for a group health plan that will be subject to the shared responsibility rules in 2015 do not have to comply until the beginning of the group health plan’s 2015 plan year, so long as certain criteria are met. Same goes for employers with 50 or more full-time equivalents and a non-calendar plan year in 2016. Employers unable to meet the following criteria will be subject to the shared responsibility rules effective January 1, 2015 (or January 1, 2016 for employers with 50-99 full-time equivalents), regardless of the plan year.1. Must Be a Group Health Plan Based on my reading of the preamble to the proposed employer shared responsibility regulations, the preamble to the final employer shared responsibility regulations and the general statutory scheme of the ACA, I believe the type of plan this transition relief refers to is a group health plan, as defined by the Internal Revenue Code.

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Compliance with the Affordable Care Act (ACA) hinges on the concept of “applicable large employer” status. If in 2014 an employer has 100 or more full-time equivalents, then that employer will be considered a large employer for ACA purposes in 2015, subject to the pay-or-play penalties and the related affordability and minimum value requirements, as well as additional annual reporting requirements. If the employer has fewer than 100 full-time equivalents in 2014, then that employer will not be considered a large employer for ACA purposes in 2015 and will not be subject to those rules in 2015. When determining large employer status for 2016 and thereafter, the threshold is lowered 50. So if in 2015 an employer has fewer than 50 full-time equivalents, then the pay-or-play penalties and reporting requirements will not apply in 2016; if it has 50 or more, then they will. Easily stated.

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