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School’s out! Summer is here, and it’s the time of year when working parents have questions about using their Dependent Care Spending Accounts (DCSAs). Are summer camp expenses eligible? What about day versus overnight camps? Employers and benefit advisors want to be ready with answers about this valuable benefit program.

The following are the top summertime questions about DCSAs and reimbursable expenses:

1. What are the basic rules for reimbursable expenses?

Dependent care expenses, such as babysitting and daycare center costs, must be work-related to qualify for reimbursement. Work-related means the expenses are for the care of the employee’s child under age 13 to allow the employee to work. If the employee is married and filing jointly, the employee’s spouse also must be gainfully employed or looking for work (unless disabled or a full-time student).

In some cases, expenses to care for a disabled dependent, regardless of age, may be reimbursable. This article focuses on expenses for children under 13 since those are by far the most common type of DCSA reimbursement.

2. One of our employees and his family are taking a two-week vacation this summer, but his children’s daycare center will charge its regular fee. Are the expenses reimbursable even if the employee and spouse are off work?

Yes. In most cases, expenses are not eligible unless the dependent care services are necessary for the parents to work, but some exceptions apply. The IRS rules for DCSAs provide that expenses during short, temporary absences are eligible if the employee has to pay the child’s care provider. Absences of up to two weeks are automatically considered short, temporary absences. Depending on the circumstances, longer absences also may qualify.

3. During the school year, our employee uses her DCSA for her 10-year old’s after-school daycare center expenses. This summer, the child’s daycare will be provided by her 20-year old sister. If the older daughter bills for her services, are the costs eligible for reimbursement?

The answer depends on whether the employee or spouse can claim the older daughter as a tax dependent. If the older daughter can be claimed as a dependent, whether or not the employee actually claims her, she is not a qualifying dependent care provider under the DCSA rules.

If the older daughter cannot be claimed as a tax dependent, her charges for providing care are eligible expenses. The specific rule is that a child of the employee, whom the employee cannot claim as a dependent, may be a qualifying provider if the child is age 19 or older by the end of the year.

Note that the employee’s spouse or the child’s parent is never a qualifying provider.

4. One of our employees has to pay an application fee and deposit before her child starts attending a daycare center this summer. Are those expenses eligible for reimbursement?

Prepaid expenses are eligible for DCSA reimbursement, provided the costs are required in order for the child to receive care. In this case, after the daycare center begins providing care, the employee can be reimbursed for the application fee and deposit she paid. On the other hand, if the employee cancels and her child does not attend, then the application fee and deposit are not eligible expenses.

5. An employee will pay day camp expenses for his 8-year-old son and overnight camp expenses for his 12-year-old daughter this summer. Are both types of expenses eligible for reimbursement?

The day camp expenses generally are reimbursable. Expenses for overnight camp, however, are not eligible since overnight care is not work-related.

Under the IRS rules for DCSAs, expenses for food, lodging, clothing, education, and entertainment are not reimbursable. If, however, such expenses are small, incidental expenses that cannot be separated from the cost of caring for the child, they may be included for reimbursement. For instance, the day camp may include lunch, snacks, and some sports activities in its basic fee, which would be eligible for reimbursement.

6. An employee’s children go to private year-round schools. He pays tuition for one child’s grade school and fees for the other child’s nursery school. Are both types of expenses eligible for reimbursement?

Educational expenses are not reimbursable, unless the educational services are merely incidental as part of a child care service. Expenses to attend kindergarten or a higher grade are educational, so the older child’s school fees are not eligible for DCSA reimbursement. (Expenses for before- or after-school care, however, may qualify as reimbursable expenses.)

On the other hand, expenses for a child in nursery school, preschool, or a similar program for children below the level of kindergarten are expenses for care. Such expenses are not considered educational even though the nursery school may include some educational activities.

Originally Published By ThinkHR.com

Do you offer coverage to your employees through a self-insured group health plan? Do you sponsor a Health Reimbursement Arrangement (HRA)? If so, do you know whether your plan or HRA is subject to the annual Patient-Centered Research Outcomes Institute (PCORI) fee?

This article answers frequently-asked questions about the PCORI fee, which plans are affected, and what you need to do as the employer sponsor. PCORI fees for 2017 health plans and HRAs are due July 31, 2018.

What is the PCORI fee?

The Affordable Care Act (ACA) created the Patient-Centered Outcomes Research Institute to study clinical effectiveness and health outcomes. To finance the nonprofit institute’s work, a small annual fee is charged on health plans.

Most employers do not have to take any action, because most employer-sponsored health plans are provided through group insurance contracts. For insured plans, the carrier is responsible for the PCORI fee and the employer has no duties.

If, however, you are an employer that self-insures a health plan or an HRA, it is your responsibility to determine whether PCORI applies and, if so, to calculate, report, and pay the fee.

The annual PCORI fee is equal to the average number of lives covered during the health plan year, multiplied by the applicable dollar amount:

  • If the plan year end date was between January 1 and September 30, 2017: $2.26.
  • If the plan year end date was between October 1 and December 31, 2017: $2.39.

Payment is due by July 31 following the end of the calendar year in which the plan year ended. Therefore, for plan years ending in 2017, payment is due no later than July 31, 2018.

Does the PCORI fee apply to all health plans?

The fee applies to all health plans and HRAs, excluding the following:

  • Plans that primarily provide “excepted benefits” (e.g., stand-alone dental and vision plans, most health flexible spending accounts with little or no employer contributions, and certain supplemental or gap-type plans).
  • Plans that do not provide significant benefits for medical care or treatment (e.g., employee assistance, disease management, and wellness programs).
  • Stop-loss insurance policies.
  • Health savings accounts (HSAs).

The IRS provides a helpful chart indicating the types of health plans that are, or are not, subject to the PCORI fee.

If I have multiple self-insured plans, does the fee apply to each one?

Yes. For instance, if you self-insure one medical plan for active employees and another medical plan for retirees, you will need to calculate, report, and pay the fee for each plan. There is an exception, though, for “multiple self-insured arrangements” that are sponsored by the same employer, cover the same participants, and have the same plan year. For example, if you self-insure a medical plan with a self-insured prescription drug plan, you would pay the PCORI fee only once with respect to the combined plan.

Does the fee apply to HRAs?

Yes. The PCORI fee applies to HRAs, which are self-insured health plans, although the fee is waived in some cases. If you self-insure another plan, such as a major medical or high deductible plan, and the HRA is merely a component of that plan, you do not have to pay the PCORI fee separately for the HRA. In other words, when the HRA is integrated with another self-insured plan, you only pay the fee once for the combined plan.

On the other hand, if the HRA stands alone, or if the HRA is integrated with an insured plan, you are responsible for paying the fee for the HRA.

What about QSEHRAs? Does the fee apply?

Yes. A Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) is new type of tax-advantaged arrangement that allows small employers to reimburse certain health costs for their workers. Although a QSEHRA is not the same as an HRA, and the rules applying to each type are very different, a QSEHRA is a self-insured health plan for purposes of the PCORI fee. In late 2017, the IRS released guidance confirming that small employers that offer QSEHRAs must calculate, report and pay the PCORI fee.

Can I use ERISA plan assets or employee contributions to pay the fee?

No. The PCORI fee is an employer expense and not a plan expense, so you cannot use ERISA plan assets or employee contributions to pay the fee. An exception is allowed for certain multi-employer plans (e.g., union trusts) subject to collective bargaining. Since the fee is paid by the employer as a business expense, it is tax deductible.

How do I calculate the fee?

Multiply $2.26 or $2.39 (depending on the date the plan year ended in 2017) times the average number of lives covered during the plan year. “Covered lives” are all participants, including employees, dependents, retirees, and COBRA enrollees. You may use any one of the following counting methods to determine the average number of lives:

  • Average Count Method: Count the number of lives covered on each day of the plan year, then divide by the number of days in the plan year.
  • Snapshot Method: Count the number of lives covered on the same day each quarter, then divide by the number of quarters (e.g., four). Or count the lives covered on the first of each month, then divide by the number of months (e.g., 12). This method also allows the option — called the “snapshot factor method” — of counting each primary enrollee (e.g., employee) with single coverage as “1” and counting each primary enrollee with family coverage as “2.35.”
  • Form 5500 Method: Add together the “beginning of plan year” and “end of plan year” participant counts reported on the Form 5500 for the plan year. There is no need to count dependents using this method since the IRS assumes the sum of the beginning and ending of year counts is close enough to the total number of covered lives. If the plan is employee-only without dependent coverage, divide the sum by 2. (If Form 5500 for the plan year ending in 2017 is not filed by July 31, 2018, you cannot use this counting method.)

For an HRA, count only the number of primary participants (employees) and disregard any dependents.

How do I report and pay the fee?

Use Form 720, Quarterly Excise Tax Return, to report and pay the annual PCORI fee. Report all information for self-insured plan(s) with plan year ending dates in 2017 on the same Form 720. Do not submit more than one Form 720 for the same period with the same Employer Identification Number (EIN), unless you are filing an amended return.

The IRS provides Instructions for Form 720. Here is a quick summary of the items for PCORI:

  • Fill in the employer information at the top of the form.
  • In Part II, complete line 133(c) and/or line 133(d), as applicable, depending on the plan year ending date(s). If you are reporting multiple plans on the same line, combine the information.
  • In Part II, complete line 2 (total).
  • In Part III, complete lines 3 and 10.
  • Sign and date Form 720 where indicated.
  • If paying by check or money order, also complete the payment voucher (Form 720-V) provided on the last page of Form 720. Be sure to fill in the circle for “2nd Quarter.” Refer to the Instructions for mailing information.

Caution! Before taking any action, confirm with your tax department or controller whether your organization files Form 720 for any purposes other than the PCORI fee. For instance, some employers use Form 720 to make quarterly payments for environmental taxes, fuel taxes, or other excise taxes. In that case, do not prepare Form 720 (or the payment voucher), but instead give the PCORI fee information to your organization’s tax preparer to include with its second quarterly filing.

Summary

If you self-insure one or more health plans or sponsor an HRA, you may be responsible for calculating, reporting, and paying annual PCORI fees. The fee is based on the average number of lives covered during the health plan year. The IRS offers a choice of three different counting methods to calculate the plan’s average covered lives. Once you have determined the count, the process for reporting and paying the fee using Form 720 is fairly simple. For plan years ending in 2017, the deadline to file Form 720 and make your payment is July 31, 2018.

Originally posted on thinkhr.com

Taking control of health care expenses is on the top of most people’s to-do list for 2018.  The average premium increase for 2018 is 18% for Affordable Care Act (ACA) plans.  So, how do you save money on health care when the costs seems to keep increasing faster than wage increases?  One way is through medical savings accounts.

Medical savings accounts are used in conjunction with High Deductible Health Plans (HDHP) and allow savers to use their pre-tax dollars to pay for qualified health care expenses.  There are three major types of medical savings accounts as defined by the IRS.  The Health Savings Account (HSA) is funded through an employer and is usually part of a salary reduction agreement.  The employer establishes this account and contributes toward it through payroll deductions.  The employee uses the balance to pay for qualified health care costs.  Money in HSA is not forfeited at the end of the year if the employee does not use it. The Health Flexible Savings Account (FSA) can be funded by the employer, employee, or any other contributor.  These pre-tax dollars are not part of a salary reduction plan and can be used for approved health care expenses.  Money in this account can be rolled over by one of two ways: 1) balance used in first 2.5 months of new year or 2) up to $500 rolled over to new year.  The third type of savings account is the Health Reimbursement Arrangement (HRA).  This account may only be contributed to by the employer and is not included in the employee’s income.  The employee then uses these contributions to pay for qualified medical expenses and the unused funds can be rolled over year to year.

There are many benefits to participating in a medical savings account.  One major benefit is the control it gives to employee when paying for health care.  As we move to a more consumer driven health plan arrangement, the individual can make informed choices on their medical expenses.  They can “shop around” to get better pricing on everything from MRIs to prescription drugs.  By placing the control of the funds back in the employee’s hands, the employer also sees a cost savings.  Reduction in premiums as well as administrative costs are attractive to employers as they look to set up these accounts for their workforce.  The ability to set aside funds pre-tax is advantageous to the savings savvy individual.  The interest earned on these accounts is also tax-free.

The federal government made adjustments to contribution limits for medical savings accounts for 2018.  For an individual purchasing single medical coverage, the yearly limit increased $50 from 2017 to a new total $3450.  Family contribution limits also increased to $6850 for this year.  Those over the age of 55 with single medical plans are now allowed to contribute $4450 and for families with the insurance provider over 55 the new limit is $7900.

Health care consumers can find ways to save money even as the cost of medical care increases.  Contributing to health savings accounts benefits both the employee as well as the employer with cost savings on premiums and better informed choices on where to spend those medical dollars.  The savings gained on these accounts even end up rewarding the consumer for making healthier lifestyle choices with lower out-of-pocket expenses for medical care.  That’s a win-win for the healthy consumer!

Our February 1, 2018 blog post reported on the late February release of the Form W-4 and guidance on the income withholding rules that changed under the Tax Cuts and Jobs Act. On February 28, 2018, the federal Internal Revenue Service (IRS) released the new 2018 Form W-4 and an updated withholding calculator.

Why a Withholding Calculator?

The IRS encourages the use of the withholding calculator for a quick paycheck checkup in light of the changes to the tax law for 2018. According to the IRS, employees may be encouraged to use the calculator to ensure the correct tax amount is being withheld from their paychecks. For example, reviewing withholding may help protect employees against having too little tax withheld and facing an unexpected tax bill or penalty during next year’s tax season. Alternatively, with the average refund being $2,800, the IRS anticipates that some employees may have less tax withheld up front and instead receive more in their paychecks. If an employee needs to make changes to his or her withholding, the calculator provides the necessary information to fill out a new W-4.

Next Steps

Make sure your employees know about the availability of the calculator. Only employees changing their withholding need to complete a new W-4, and they may use results from the calculator to complete the new form. Encourage those employees to submit updated W-4s as soon as possible to ensure their withholdings are accurate.

The IRS also suggests that if employees follow the calculator’s recommendations and change their 2018 withholding, they should recheck their withholding at the beginning of 2019 to protect against having too little withheld. This is important where an employee reduces his or her withholding sometime during 2018 because a mid-year withholding change in 2018 may have a different full-year impact in 2019.

Originally Published By ThinkHR.com

IRS Releases Publication 15 and W-4 Withholding Guidance for 2018

On January 31, 2018, the federal Internal Revenue Service (IRS) released Publication 15 — Introductory Material, which includes the following:

  • 2018 federal income tax withholding tables.
  • Exempt Form W-4.
  • New information on:
    • Withholding allowance.
    • Withholding on supplemental wages.
    • Backup withholding.
    • Moving expense reimbursement.
    • Social Security and Medicare tax for 2018.
    • Disaster tax relief.

Read Publication 15 and further details here.

EEOC Penalty Increases for Failure to Post Required Notices

On January 18, 2018, the U.S. Equal Employment Opportunity Commission (EEOC) released a final rule increasing the penalty amount from $534 to $545 for violations of Title VII of the Civil Rights Act (Title VII), the Americans with Disabilities Act (ADA), and the Genetic Information Nondiscrimination Act (GINA) notice posting requirements.

The final rule is effective February 20, 2018.

Originally Published By ThinkHR.com

If you’ve been getting questions from your employees about completing new 2018 W-4 forms to take advantage of the tax reform rules, we’ve finally received some answers. You can continue to rely on the current W-4 forms for now until the new 2018 form is released in late February.

The January 29th Internal Revenue Service (IRS) Notice 2018-14 provides additional guidance on the income withholding rules that were changed under the recently passed Tax Cuts and Jobs Act. The guidance:

  • Extends the effective period of Forms W-4 furnished to claim exemption from withholding for 2017 until February 28, 2018.
  • Permits employees to claim exemption from withholding for 2018 by temporarily using the 2017 Form W-4. This procedure will expire 30 days after the 2018 Form W-4 is released.
  • States that employees experiencing a change in status that causes a reduction in the number of withholding exemptions are not required to furnish employers with new withholding certificates until 30 days after the 2018 Form W-4 is released.
  • Provides that employees who have a reduction in the number of withholding allowances solely due to changes made by the Tax Cuts and Jobs Act are not required to furnish employers with new withholding certificates during 2018. However, employees may choose to update their withholding at any time in response to the act. Employees who choose to update their withholding may use the 2017 Form W-4 instead of the 2018 Form W-4 to report changes in withholding allowances until 30 days after the 2018 Form W-4 is released.
  • Confirms that the optional withholding rate on supplemental wage payments is 22 percent for 2018 through 2025.
  • Specifies that, for 2018, withholding under IRC 3405(a)(4) on periodic payments when no withholding certificate is in effect will be based on treating the payee as a married individual claiming three withholding allowances.

In addition to the guidance, the IRS also released a new Publication 15, (Circular E), Employer Tax Guide, for 2018. Publication 15 includes the 2018 withholding tables and explains an employer’s tax responsibilities, such as withholding, depositing, reporting, paying, and correcting employment taxes.

 

Originally Published By ThinkHR.com

WHD Revises Test for Unpaid Internships

On January 5, 2018, the U.S. Department of Labor’s Wage and Hour Division (WHD) released a Field Assistance Bulletin (FAB No. 2018-2) establishing that the primary beneficiary test, rather than the six-point test, will determine whether interns at for-profit employers are employees under the federal Fair Labor Standards Act (FLSA).

The primary beneficiary test requires an examination of the economic reality of the intern-employer relationship to determine which party is the primary beneficiary of the relationship. The following seven factors are part of this test:

  1. The extent to which the intern and the employer clearly understand that there is no expectation of compensation. Any promise of compensation, express or implied, suggests that the intern is an employee — and vice versa.
  2. The extent to which the internship provides training that would be similar to that which would be given in an educational environment, including the clinical and other hands-on training provided by educational institutions.
  3. The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit.
  4. The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar.
  5. The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning.
  6. The extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern.
  7. The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job after the internship.

According to the WHD, under the primary beneficiary test, no one factor is dispositive and every factor is not required to be fulfilled to conclude that the intern is not an employee entitled to the minimum wage. The primary beneficiary test is a distinct shift in analysis because per the six-part test every intern and trainee would be an employee under the FLSA unless his or her job satisfied each of six independent criteria. Courts have held that the primary beneficiary test is an inherently “flexible” test and whether an intern or trainee is an employee under the FLSA necessarily depends on the unique circumstances of each case.

The WHD announced it will conform to the federal court of appeals’ determinations and use the same court-adopted test to determine whether interns or students are employees under the FLSA.

Read the field bulletin

Increased Penalties for Federal Violations

On January 2, 2018, the U.S. Department of Labor (DOL) announced in the Federal Register that penalties for violations of the following federal laws have increased for 2018:

  • Black Lung Benefits Act.
  • Contract Work Hours and Safety Standards Act.
  • Employee Polygraph Protection Act.
  • Employee Retirement Income Security Act.
  • Fair Labor Standards Act (child labor and home worker).
  • Family and Medical Leave Act.
  • Immigration and Nationality Act.
  • Longshore and Harbor Workers’ Compensation Act.
  • Migrant and Seasonal Agricultural Worker Protection Act.
  • Occupational Safety and Health Act.
  • Walsh-Healey Public Contracts Act.

These increases are due to the requirements of the Inflation Adjustment Act, which requires the DOL to annually adjust its civil money penalty levels for inflation by no later than January 15.

These increased rates are effective January 2, 2018.

Read the Federal Register

OSHA Penalties Increased

On January 2, 2018, the U.S. Department of Labor announced in the Federal Register that Occupational Safety and Health Administration (OSHA) penalties will increase for 2018 as follows:

  • Other-than-Serious: $12,934
  • Serious: $12,934
  • Repeat: $129,336
  • Willful: $129,336
  • Posting Requirement Violation: $12,934
  • Failure to Abate: $12,934

These increases apply to states with federal OSHA programs; rates for states with OSHA-approved State Plans will increase to these amounts as well; State Plans are required to increase their penalties in alignment with OSHA’s to maintain at least as effective penalty levels.

These new penalty increases are effective as of January 2, 2018 and apply to any citations issued on that day and thereafter.

Read the Federal Register

Agencies Release Advance Copies of Form 5500 for Filing in 2018

The Employee Benefits Security Administration (EBSA) the Internal Revenue Service (IRS), and the Pension Benefit Guaranty Corporation (PBGC) released the advance informational copies of the 2017 Form 5500 and related instructions. For small employee benefit plan reports, advance short form copies of 2017 Form 5500-Short Form (SF) and 2017 Instructions for Form 5500-SF were also released with supplemental materials including schedules and attachments.

Read about and download the Form 5500 Series

Originally Published By ThinkHR.com

On January 11, 2018, the Internal Revenue Service released its income tax withholding tables for 2018 reflecting changes made by the December 2017 tax reform legislation. The updated withholding information provides the new rates for employers to use during 2018. Employers are encouraged to use these tables as soon as possible but must use them by no later than February 15, 2018. Employers should continue to use the 2017 withholding tables until they implement the 2018 withholding tables.

According to the U.S. Treasury, an estimated 90 percent of paycheck recipients are likely to see an increase in their take-home pay by February. However, when employees see these changes in their paychecks depends on how quickly the new tables are implemented by their employers and how often they are paid (usually weekly, biweekly, or semimonthly).

To help individuals identify the correct amount of withholding, the IRS is releasing a revised withholding calculator by the end of February, which will be posted on IRS.gov. The IRS encourages taxpayers to use the calculator to adjust their withholding once it is released.

Changes for 2018 and Looking Forward

The new law makes many changes for 2018 that affect individual taxpayers, including an increase in the standard deduction, repeal of personal exemptions, and changes in tax rates and brackets. In relation to Form W-4, these new withholding tables are designed to work with employees’ current W-4, as filed with their employer; so, there are no steps employees must currently take regarding the new tables and law.

The IRS is also working on revising the Form W-4 to reflect the newly available itemized deductions, increases in the child tax credit, the new dependent credit, and repeal of dependent exemptions. However, there is no set release date for the revised form.

Once released, employees may use the new Form W-4 to update their withholding in response to the new law or changes in their personal circumstances in 2018, and by workers starting a new job. Until a new Form W-4 is issued, employees and employers should continue to use the 2017 Form W-4.

For Now

At this time, employers should be reviewing these new tables and implementing necessary changes. For 2019, the IRS has said that it anticipates making even more changes involving withholding. But don’t despair; the agency provides FAQs, which employers and employee may find useful, and pledges to work with the business and payroll community to encourage workers to file new Forms W-4 next year while sharing information on changes in the new tax law that impact withholding.

Stay tuned though, because 2018 has only just begun.

Originally Published By ThinkHR.com

The ACA requires employers to report the cost of coverage under an employer-sponsored group health plan. Reporting the cost of health care coverage on Form W-2 does not mean that the coverage is taxable.

Employers that provide “applicable employer-sponsored coverage” under a group health plan are subject to the reporting requirement. This includes businesses, tax-exempt organizations, and federal, state and local government entities (except with respect to plans maintained primarily for members of the military and their families). Federally recognized Indian tribal governments are not subject to this requirement.

Employers that are subject to this requirement should report the value of the health care coverage in Box 12 of Form W-2, with Code DD to identify the amount. There is no reporting on Form W-3 of the total of these amounts for all the employer’s employees.

In general, the amount reported should include both the portion paid by the employer and the portion paid by the employee. See the chart below from the IRS’ webpage and its questions and answers for more information.

The chart below illustrates the types of coverage that employers must report on Form W-2. Certain items are listed as “optional” based on transition relief provided by Notice 2012-9 (restating and clarifying Notice 2011-28). Future guidance may revise reporting requirements but will not be applicable until the tax year beginning at least six months after the date of issuance of such guidance.

  Form W-2, Box 12, Code DD
Coverage Type Report Do Not
Report
Optional
Major medical X    
Dental or vision plan not integrated into another medical or health plan     X
Dental or vision plan which gives the choice of declining or electing and paying an additional premium     X
Health flexible spending arrangement (FSA) funded solely by salary-reduction amounts   X  
Health FSA value for the plan year in excess of employee’s cafeteria plan salary reductions for all qualified benefits X    
Health reimbursement arrangement (HRA) contributions     X
Health savings account (HSA) contributions (employer or employee)   X  
Archer Medical Savings Account (Archer MSA) contributions (employer or employee)   X  
Hospital indemnity or specified illness (insured or self-funded), paid on after-tax basis   X  
Hospital indemnity or specified illness (insured or self-funded), paid through salary reduction (pre-tax) or by employer X    
Employee assistance plan (EAP) providing applicable employer-sponsored healthcare coverage Required if employer charges a COBRA premium   Optional if employer does not charge a COBRA premium
On-site medical clinics providing applicable employer-sponsored healthcare coverage Required if employer charges a COBRA premium   Optional if employer does not charge a COBRA premium
Wellness programs providing applicable employer-sponsored healthcare coverage Required if employer charges a COBRA premium   Optional if employer does not charge a COBRA premium
Multi-employer plans     X
Domestic partner coverage included in gross income X    
Governmental plans providing coverage primarily for members of the military and their families   X  
Federally recognized Indian tribal government plans and plans of tribally charted corporations wholly owned by a federally recognized Indian tribal government   X  
Self-funded plans not subject to federal COBRA     X
Accident or disability income   X  
Long-term care   X  
Liability insurance   X  
Supplemental liability insurance   X  
Workers’ compensation   X  
Automobile medical payment insurance   X  
Credit-only insurance   X  
Excess reimbursement to highly compensated individual, included in gross income   X  
Payment/reimbursement of health insurance premiums for 2% shareholder-employee, included in gross income   X  
Other situations Report Do Not
Report
Optional
Employers required to file fewer than 250 Forms W-2 for the preceding calendar year (determined without application of any entity aggregation rules for related employers)     X
Forms W-2 furnished to employees who terminate before the end of a calendar year and request, in writing, a Form W-2 before the end of the year     X
Forms W-2 provided by third-party sick-pay provider to employees of other employers     X

By Danielle Capilla
Originally Published By United Benefit Advisors

The U.S. Department of Labor’s Employee Benefits Security Administration (EBSA), the Internal Revenue Service (IRS), and the Pension Benefit Guaranty Corporation (PBGC) released advance informational copies of the 2017 Form 5500 annual return/report and related instructions.

Specifically, the instructions highlight the following modifications to the forms, schedules, and instructions:

  • IRS-Only Questions. IRS-only questions that filers were not required to complete on the 2016 Form 5500 have been removed from the Form 5500 and Schedules.
  • Authorized Service Provider Signatures. The instructions for authorized service provider signatures have been updated to reflect the ability for service providers to sign electronic filings on the plan sponsor and Direct Filing Entity (DFE) lines, where applicable, in addition to signing on behalf of plan administrators on the plan administrator line.
  • Administrative Penalties. The instructions have been updated to reflect that the new maximum penalty for a plan administrator who fails or refuses to file a complete or accurate Form 5500 report has been increased to up to $2,097 a day for penalties assessed after January 13, 2017, whose associated violations occurred after November 2, 2015. Because the Federal Civil Penalties Inflation Adjustment Improvements Act of 2015 requires the penalty amount to be adjusted annually after the Form 5500 and its schedules, attachments, and instructions are published for filing, be sure to check for any possible required inflation adjustments of the maximum penalty amount that may have been published in the Federal Register after the instructions have been posted.
  • Form 5500-Plan Name Change. Line 4 of the Form 5500 has been changed to provide a field for filers to indicate that the name of the plan has changed. The instructions for line 4 have been updated to reflect the change. The instructions for line 1a have also been updated to advise filers that if the plan changed its name from the prior year filing or filings, complete line 4 to indicate that the plan was previously identified by a different name.
  • Filing Exemption for Small Plans. The instructions indicate that for a small unfunded, insured, or combination welfare plan to qualify for the filing exemption, the plan must not be subject to the Form M-1 filing requirements.

Be aware that the advance copies of the 2017 Form 5500 are for informational purposes only and cannot be used to file a 2017 Form 5500 annual return/report.

By Danielle Capilla
Originally Published By United Benefit Advisors

Kathy! You are amazing! I was speaking with Dr. Abel today re a patient and on his own he brought up how you were able to fix his wife and daughter’s insurance in less than 24 hours AND you were so NICE and PROFESSIONAL. He then said you were AMAZING. I absolutely love working with you, Ron, and the entire gang! Just wanted to pass this on - and again thank you for all you do for us!!!!

- Office Manager, Surgical Center in San Francisco

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