Are you Ready for a DOL Audit?
Over the past several months we have heard of a significant increase in audit activity and compliance checks for small employers. Based on the feedback we’ve received it appears the DOL is focused much more on encouraging compliance than just reaching for penalties however this could change quickly. Clients of taxfreepremiums.com when purchasing an IRS Section 125 POP Document receive a compliance checklist. Our strong suggestion is to follow the checklist, make sure you are distributing either via hard copy or electronically the Summary Plan Description (SPD), make sure the document is up to date and has been reviewed or amended to include current language.
There has been alot of discussion over early renewals for small group to avoid significant rate increases due to ACA. Depending on your current document you will want to review the plan year and how your document defines eligibility. Careful consideration should be given between the client and your advisor, however making sure you have a written Section 125 Plan document is a MUST if you are deducting premiums on a tax-free basis.