Q & A with HR Service, - HR, Compliance & Benefits Admin

A Section 125 premium-only-plan (POP), is a cafeteria plan which allows employees to pay their health insurance premiums with tax-free dollars. Traditionally, POP plans have been used in combination with employer-sponsored group health insurance plans. However, employees can also use POP plans to pay individual health insurance premiums with tax-free dollars. Using a Section 125 POP to pay for insurance premiums benefits both employers and their employees.

A Summary Plan Description (SPD) is a document that employers must give free to employees who participate in Employee Retirement Income Security Act-covered retirement plans or health benefit plans. The SPD is a detailed guide to the benefits the program provides and how the plan works.

The U.S. Department of Labor, Internal Revenue Service, and the Pension Benefit Guaranty Corporation jointly developed the Form 5500 Series, so employee benefit plans could utilize the Form 5500 Series forms to satisfy annual reporting requirements under Title I and Title IV of ERISA and under the Internal Revenue Code.

Once a Form 5500 is completed and filed, you must prepare a Summary Annual Report (SAR) for each of your welfare benefit plans subject to ERISA reporting. After submitting, the SAR summarizes Form 5500 information. Then notifies participants that Form 5500 and a copy is available to participants who request. SARs must be distributed to covered participants within nine months after the end of the plan year. A sample SAR format is accessible from https://www.dol.gov/.

If an employer has at least 50 full-time employees, including full-time equivalent employees, on average during the prior year, the employer is an Applicable Large Employer (ALE) for the current calendar year and are required to provide medical insurance and submit ACA Reports annually to employees and the IRS to avoid penalties.

Determine ALE status for 2019 based on 2018 data. Identify full-time employees based on the ACA's definition of full time (averaging 30 hours of work or more per week during a month), considering special classifications such as staffing employees, independent contractors, temporary or short-term employees, and even interns. Assess whether the monthly measurement method or look-back measurement method to determine full-time status is best, based on the nature of the company's workforce.

Update plan documents and summary plan descriptions, if necessary, for the measurement method selected. Select the appropriate safe harbor the company will use for the affordability calculation:  W-2, rate of pay, or federal poverty line. Make sure Social Security number request obligations are being fulfilled. Check reporting obligations for non-ALEs that self-insured group health plans. Review the instructions for required forms, noting changes from prior years.

HR Compliance entails:

  • Federal and state laws
  • Company SOPs and policies
  • Code of conduct
    Data privacy and security
  • Fraud detection and prevention (anti-money laundering, anti-bribery, etc.)
  • Business ethics (gift policy, conflicts of interest
  • Discrimination
  • Sexual harassment
    OSHA regulations and workplace safety
  • Workplace violence
  • Risk management
    Workplace substance abuse
  • Workplace violence
    Diversity and inclusiveness in the workplace

The following are examples, to date, of requirements that employers have most frequently failed to follow:

  • Provide a medical evaluation before a worker is fit-tested or uses a respirator.
  • Perform an appropriate fit test for workers using tight fitting respirators.
  • Assess the workplace to determine if COVID-19 hazards are present, or likely to be present, which will require the use of a respirator and/or other personal protective equipment (PPE).
  • Establish, implement, and update a written respiratory protection program with required worksite-specific procedures.
  • Provide an appropriate respirator and/or other PPE to each employee when necessary to protect the health of the employees (ensuring the respirator and/or PPE used is the correct type and size).
  • Train workers to safely use respirators and/or other PPE in the workplace, and retrain workers about changes in the workplace that might make previous training obsolete.
  • Store respirators and other PPE properly in a way to protect them from damage, contamination, and, where applicable, deformation of the facepiece and exhalation valve.
    For any fatality that occurs within 30 days of a work-related incident, report the fatality to OSHA within eight hours of finding out about it.
  • Keep required records of work-related fatalities, injuries, and illness.

You can change plans through August 15 due to the coronavirus disease 2019 (COVID-19) emergency. If you’re currently enrolled in Marketplace coverage, you may qualify for more tax credits. Learn more about new, lower costs.

  • If you have a life event that qualifies you for a Special Enrollment Period, you can change any time.
  • Most people who qualify for a Special Enrollment Period and want to change plans may have a limited number of health plan “metal” categories to choose from (instead of all 4) during their Special Enrollment Period.
  • This means if you want to change plans during a Special Enrollment Period that you qualify for, you may need to select a new plan within the same plan category as your current plan, or wait until the next Open Enrollment if you want to change to a plan in a different category.

If you’re currently enrolled in Marketplace coverage, you may qualify for more tax credits.

Q&A - HSA, FSA, HRA, COBRA, QSERA and ICHRA

If you’re losing job-based coverage and haven’t signed up for COBRA, learn about your rights and options under COBRA HERE.

According to the Department of Labor, to qualify for COBRA you must fall under three conditions to be considered for coverage:

  • You must have an event that qualifies you for COBRA coverage.
  • COBRA must cover your group health plan.
  • You must be a beneficiary that is qualified for the specific event.

Generally, no. If you only have a cafeteria plan, you are not required to file Form 5500 or Schedule F. However, if you have a welfare benefit plan, you may be required under Department of Labor regulations to file a return for that plan.

An HSA is a type of savings account that lets you set aside money on a pre-tax basis to pay for qualified medical expenses. By using un taxed dollars in a Health Savings Account (HSA) to pay for deductibles, co-payments, coinsurance, and some other expenses, you may be able to lower your overall health care costs. HSA funds generally may not be used to pay premiums.

You cannot contribute to your HRA. It is owned, defined, and completely funded by your employer. It’s one of the ways your employer helps you make healthcare more affordable.

A flexible spending account (FSA) is a type of savings account that provides the account holder with specific tax advantages.

  • You can claim a tax deduction for contributions you, or someone other than your employer, make to your HSA even if you don’t itemize your deductions on Schedule A (Form 1040).

  • Contributions to your HSA made by your employer (including contributions made through a cafeteria plan) may be excluded from your gross income.

  • The contributions remain in your account until you use them.

  • The interest or other earnings on the assets in the account are tax-free.

  • Distributions may be tax-free if you pay qualified medical expenses.

  • An HSA is "portable." It stays with you if you change employers or leave the workforce.

IRS contribution limits in 2020 allow you to set aside $2,750 into a medical or limited FSA and $5,000 into a dependent care FSA.

ICHRA allows businesses the option to offer employees a monthly allowance of tax-free money to buy health insurance that fits their needs. ICHRA also 
addresses ACA compliance for employers with more than 50 employees.

ICHRA Helps Employer and Employee

Amounts contributed by employers are contributions to a health and welfare plan, and therefore are a qualified business expense.

Contributions by employers do not add to an employee’s income that now becomes a  tax-free benefit.

Small employers who don't offer group health coverage to their employees can help employees pay for medical expenses through a Qualified Small Employer Health Reimbursement Arrangement (QSEHRA). If your employer offers you a QSEHRA, you can use it to help pay your household's health care costs (like your monthly premium) for qualifying health coverage.

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