Flexible Spending Accounts – Different Strokes for Different Plans

Flexible spending accounts (FSAs), also called Section 125 plans after the relevant section of the Internal Revenue Code, are commonplace benefits. But, perhaps because they are common, some employers and employees don’t understand some of the regulations that apply to these plans. IRS Publication 969 titled “Health Savings Accounts and Other Tax-Favored Health Plans” isContinue reading “Flexible Spending Accounts – Different Strokes for Different Plans”

Caution if Offering Health Coverage to Non-Employees

A frequent Compliance Corner question asks whether employers can include independent contractors in their health plans or other benefits. The answer to this question is more complicated than one might think. Most benefit experts advise against including independent contractors or other non-employees such as 1099 employees, non-employee directors or leased employees on employer’s benefit plans.Continue reading “Caution if Offering Health Coverage to Non-Employees”

IRS Insight on Letter 227 – Hint: It’s in Reply to Letter 226J

Those lucky employers who have already received a 226J letter from the IRS have a Letter 227 to look forward to! The Letter 227 is the acknowledgement letter Applicable Large Employers (ALEs) receive following their response to the Letter 226J. The Letter 226J provides a preliminary calculation of the amount that an ALE may oweContinue reading “IRS Insight on Letter 227 – Hint: It’s in Reply to Letter 226J”

IRS Provides Limited Bare-Counties SHOP Relief

IRS Notice 2018-27 provides limited relief for employers who wished to utilize the small employer health insurance tax credit but there were no available plans in their county. As a reminder, the tax credit is available for a two-consecutive tax year period. It was first available for tax years beginning after December 31, 2009. ToContinue reading “IRS Provides Limited Bare-Counties SHOP Relief”

Déjà vu — IRS Revises HSA Family limit

IRS Revenue Procedure 2018-27 returns the annual limit for 2018 HSA family contributions to $6,900. This follows and supersedes Revenue Procedure 2018-18 which was published this past March. The IRS acknowledged that the $50 reduction to the limit on HSA deductions for family HDHP coverage imposed “administrative and financial burdens.” The notice reflected that theseContinue reading “Déjà vu — IRS Revises HSA Family limit”

ACA’s Individual Mandate — Still in Force

The new tax law passed by Congress and signed by the President does not repeal the individual mandate as many people have assumed. The tax law actually zeroes out the individual mandate penalty. And, importantly, this action takes effect in 2019. The actual law text is: SEC. 11081. ELIMINATION OF SHARED RESPONSIBILITY PAYMENT FOR INDIVIDUALSContinue reading “ACA’s Individual Mandate — Still in Force”

Cautions and Caveats Regarding Health Care Sharing Ministries

There has been a significant increase in enrollment in health care sharing ministries over the years since enactment of the Affordable Care Act (ACA). ACA specifically referenced health care sharing ministries, allowing an exemption from the individual mandate for individuals participating in one. According to the Alliance of Health Care Sharing Ministries there are moreContinue reading “Cautions and Caveats Regarding Health Care Sharing Ministries”

ACA Employer Reporting Penalties Increase for 2018

Many employers are getting unwelcome mail from the IRS –Letter 226J- assessing employer shared responsibility penalties. Early reports of employers receiving these letters are that errors made on the 1094-C and 1095-C forms may be the trigger. Hopefully, these errors can be corrected and many of the penalties will be abated. But, this experience pointsContinue reading “ACA Employer Reporting Penalties Increase for 2018”