Benefits In Brief

Miscalculating an employer matching contribution is one of the most common mistakes in the administration of a Section 401(k) plan.  This mistake often occurs because the plan sponsor calculates the matching contribution using an incorrect timing assumption—for example, a pay-period basis, rather than an annual basis.

In Revenue Procedure 2012-26, the IRS has announced the 2013 inflation-adjusted amounts for health savings accounts (“HSAs”) and qualifying high deductible health plans (“HDHPs”), all as determined under Section 223 of the Internal Revenue Code.

The failure to properly withhold salary deferral contributions from a participant’s compensation is one of the most common mistakes that arise in the administration of a Section 401(k) defined contribution retirement plan.  This common mistake generally occurs because the plan sponsor fails to apply the proper definition of compensation under the plan.

The tide of regulations interpreting the 2010 Patient Protection and Affordable Care Act (“PPACA”) began to ebb in 2011, and portions of the law have even been repealed or put on hold.  Nonetheless, health plan sponsors will still face new compliance burdens in 2012.  This article briefly addresses these aspects of the PPACA.

The Affordable Care Act (“ACA”) requires each employer group health plan to provide a 4-page summary of its benefits to all individuals who are eligible for coverage. This requirement takes effect on March 23, 2012 (two years after the enactment of the ACA). The three agencies charged with implementing many of the ACA’s requirements have just issued proposed regulations, along with templates of proposed formats, under which a plan may furnish this new “summary of benefits and coverage” (“SBC”).

The Affordable Care Act (“ACA”) requires group health plans (other than plans that are “grandfathered”) to cover a list of preventive health services.  Earlier this month, the three agencies charged with administering the ACA issued additional rules describing women’s preventive services that must also be covered.  Like the services listed in earlier agency guidance, these women’s preventive services must be covered on a first-dollar basis, with no cost-sharing requirement, by “non-grandfathered” group health plans.  This article briefly summarizes the new rules.

On April 1, 2011, the Centers for Medicare and Medicaid Services ("CMS") issued revised Medicare Part D creditable and non-creditable coverage notices to reflect an amendment made to the Social Security Act by the Affordable Care Act ("ACA"). The amendment accelerated the Medicare Part D annual enrollment period — from November 15 through December 31, to October 15 through December 7. This change is effective for 2012 Part D enrollments, occurring in the fall of 2011.

The Affordable Care Act requires that employees’ W-2s provide useful and comparable consumer information on the cost of their employer-sponsored health coverage. On March 29, 2011, the IRS issued Notice 2011-28, providing interim guidance on this new reporting requirement.

By now, most people involved in the administration of group health plans are familiar with the requirement that plans offering dependent coverage make that coverage available to adult children until they attain age 26. This new requirement applies to both insured and self-insured plans (regardless of the plan’s status as a “grandfathered” plan), and is effective for plans years beginning on or after September 23, 2010 (January 1, 2011, for calendar-year plans). Many of us, however, are not as familiar with the corresponding change to the Tax Code that allows these benefits to be provided on a tax-free basis.

Amid the year-end rush to comply with the reform provisions of the Affordable Care Act (“ACA”) for group health plans, it is easy to overlook the ACA’s effects on other health plan arrangements. As discussed in our May 2010 article, cafeteria plans, health flexible spending accounts (“FSAs”), health savings accounts (“HSAs”), and health care reimbursement arrangements (“HRAs”) are subject to several of the same requirements that apply to group health plans.