Is Your Plan Starting 2014 in Compliance with IRS Section 125?
The Department of Labor has significantly increased the amount of audit activity reported from HR sources in 2013 and enhanced audit inquiries are expected through 2014 as well. With all the new regulations being issued and plan updates that are required under the Department of Labor through recent bulletins many employers fail to remember some of the basics.
Maintaining your Section 125 Premium Only Plan is almost as important as having a plan, to begin with. In our opinion, the out-of-pocket medical expenses plans through IRS Section 125 have decreased dramatically as Health Savings Accounts coupled with High Deductible Health Plans continue the trend of increased participation. The assets of rollover and limits are dramatically higher.
Tips for compliance:
- Make sure you have a written plan document for your Section 125 POP Plan
- Make sure your document is up to date and SPD’s have been distributed to all eligible participants
- If you are using an H.S.A. for employees confirm your plan document has been amended or allows for these contributions.
- If you have recently changed your waiting period (which most employers will in 2014 upon renewal) confirm that you have either updated your document or your document allows the flexibility to coincide with your benefits automatically.
- Confirm address and plan contact information is up to date
- Confirm only eligible employees are allowed to participate and that you actually running your plan in accordance with plan documents.
If you have any questions on what is required please feel free to contact a member of our staff or request a free compliance checklist.