Core Documents Launches Campaign to Help Employers Avoid IRS and DOL Audit Disasters for Section 125 and HRA Benefits Due to Compliance Issues
PR Web |
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• Section 105 HRA Plans used by Sole Proprietors,
• Health Reimbursement Arrangements or HRA Plans, and
• Section 132 Commuter and Parking Arrangements.
The Section 125 or Section 105 HRA compliance infractions are normally discovered by an astute insurance agent – rarely by the company owner, corporate attorney, CPA, or bookkeeper. However, many insurance agents, as well as accountants, just don't bother to keep up with the constantly changing requirements and compliance issues associated with these plans.
What are the consequences of a plan with compliance issues? Any, or all, of the following:
• all pre-tax deductions may be disallowed back to the beginning,
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• and possible daily
Many employers mistakenly believe their Accountant, CPA, Insurance Agent,
Here are a few of the more common compliance issues:
• Employers are required by the
• Employers or insurance agents that "borrow" and insert their company name in an outdated plan document designed for another company that doesn't address their plan design requirements, and has become increasingly out of compliance by new regulations,
• The "free" plan document offered by insurance company agents to sell supplemental policies (quackers), that no one ever updated or maintained, and probably can't even locate,
• Employers are required by the
• Annual salary reduction election forms should be on file and available for possible
• Discrimination testing should be done at least once a year and proof of testing should be available for possible
• Medical expense reimbursement plans with more than 100 participants are required to file
• Failure to update and maintain plan documents for compliance with new laws regarding COBRA, HIPAA, FMLA, USERRA, protected health information, over-the-counter prescription drugs, new definitions for dependents, deductions for domestic partners, mid-year qualifying events to make election changes, and now the Affordable Care Act aka ObamaCare regulations,
• Failure to enforce twelve-month irrevocable deduction rules during the plan year,
• Refunding unused funds back to the employee from medical and dependent care assistance FSA plans at the end of the plan year,
• Not amending a Health FSA plan to the new required annual limits, and employer maximum contribution limits (due to ACA, ObamaCare), or adding the new Health FSA carryover provision option,
• Companies establishing simple reimbursement plans for dental, vision, or deductible and co-payment expenses without a Health Flexible Spending Account plan document,
• Reimbursing medical and insurance expenses to certain key employees only,
• Discriminating within a class of employees,
• Basing benefit limits for reimbursement on seniority or a percentage of pay,
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• Owners participating illegally,
• Highly compensated and key employee deductions total more than 25% of group deductions,
• Professional groups, such as physicians, setting up elaborate insurance and medical expense reimbursement schemes without a formal plan while excluding hourly employees,
• Pre-taxing health savings account bank funds through the Section 125 Premium Only Plan without proper plan documentation addressing HSA administration,
• Not limiting Medical Expense Reimbursement FSA plans offered in combination with HSA plans,
• Offering pre-tax individual health insurance premium deductions through the Section 125 Plan or an HRA Plan,
• Allowing pre-tax ACA Exchange individual health insurance policy deductions through the Section 125 or HRA plan not allowed under recent
• Employer funding Health FSA plans without an ACA compliant group health insurance plan,
• Offering a Comprehensive HRA plan with capped annual benefits for reimbursing medical expenses in violation of recent ACA, DOL, and
• Employers still using a zaney HRA "buy individual health insurance and drop your group plan" system no longer allowed,
• Employers still using the Premium Reimbursement FSA system, no longer allowed,
• Employers using any number of proprietary HRA and Medical Expense Reimbursement Plan (MERP) systems designed as an ObamaCare work-around solution, no longer allowed,
• Offering any non-excepted benefits or individual health insurance through an HRA Plan.
These are just a few of the compliance issues employers should consider and why a competent plan document provider is necessary.
Read the full story at http://www.prweb.com/releases/2014/03/prweb11639030.htm
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