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Compliance

** Below are a few examples of various topics and plans **
 
WHICH BENEFITS ARE ERISA PLANS?

The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that sets minimum standards for most voluntarily established retirement and health plans in private industry to provide protection for individuals in these plans. ERISA generally applies to the following Plans, whether they are fully insured or self-insured:

  • Medical, Surgical, Hospital, or HMO Plans

  • Health Reimbursement Accounts (HRA)

  • Healthcare FSA

  • Dental Plans

  • Vision Plans

  • Prescription Drug Plans

  • Sickness, Accident, and Disability Insurance

  • Life and AD&D Insurance

REQUIRED DOCUMENTS

The Employee Retirement and Income Security Act (ERISA) requires health plan administrators to give plan participants specific information about the benefits to which they are entitled, including covered benefits, plan rules, financial information and documents about the plan’s operation and management. This information must be provided in writing on a regular basis or upon request.

There are certain materials that a plan sponsor must provide to each participant and beneficiary in a plan, even if not requested:

  • Summary plan description

  • Summary of material modifications (whenever the plan is amended)

  • Summary annual report (contains information on the financial condition of the plan)

  • Summary of Benefits and Coverage

These materials can be provided electronically, as long as certain requirements are met, including the requirement that the plan member gave consent to receive the documents electronically.

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SUMMARY PLAN DESCRIPTION

One important document that participants are legally entitled to receive automatically is a plan summary or summary plan description (SPD). Generally, SPDs contain the following:

  • Outline health care services covered under the plan

  • Describe how services are provided and how the plan operates

  • Describe how benefits are calculated

  • Explain the portion of costs for which the plan is responsible, and the portion of costs for which the participant (or beneficiary) is responsible (e.g. copayments or coinsurance)

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HEALTH SAVINGS ACCOUNT (HSA)

An HSA is a fantastic financial vehicle because of its tax-favored status and flexibility of use. A Health Savings Account (HSA) is a type of personal savings account you can set up to pay certain health care costs. An HSA allows you to put money away and withdraw it tax free, as long as you use it for qualified medical expenses, like deductibles, copayments, coinsurance, and more. (Generally, insurance premiums aren’t considered qualified medical expenses.) You’re eligible to contribute to an HSA when you’re covered by an HSA-eligible plan (sometimes called a High Deductible Health Plan (HDHP)). With HSA-eligible plans,  the monthly premium is usually lower, but you pay more out-of-pocket health care costs yourself before your insurance company starts to pay its share. You can’t contribute to an HSA if you have Medicare coverage, or a plan that pays its share of a covered service without you having to pay deductibles or copayments first (called “first dollar coverage”).

**Check out https://hsastore.com/ to see eligible items and services**

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SECTION 125 (CAFETERIA PLANS) AND SIMILAR​

Saving tax dollars is a favorite activity for most of us.  In order to capture tax savings through a company's benefit package, it is vital to have the correct documents and procedures in place.​

  • Healthcare Flexible Spending Account – Reimburses all of the qualified medical expenses as

defined under Section 213(d) of the IRS code and subject to “use it or lose it” rules, unless the
employer elects an optional rollover of up to $640. Employers cannot elect both the $640 rollover
and the grace period option. The current annual maximum contribution limit is $3,200 for 2024.

  • Limited Purpose or Post-Deductible Spending Account – These plans are designed to

complement HSA and/or HRA plans to maximize pre-tax savings to employees and ensue
compliance between multiple programs. Funds are subject to “use it or lose it” rules.

  • Dependent Care Flexible Spending Account – Allows employees to fund their dependent care

expenses with pre-tax funds. These funds are subject to “use it or lose it” rules. The current IRS
maximum annual contribution is $5,000 ($2,500 if married and filing separately).

  • Transit & Parking Flexible Spending Account – Section 132 of the IRS Code allows an

employee to pre-tax fund qualified commuter expenses that generally include mass transit
expenses (train, subway, bus, commuter highway vehicle, transit passes), and parking.

  • 2.5-Month Extension or Grace Period - If a company has the 2.5-month extension period for their

prior plan year, it is impossible for two administrators to ensure that a member’s expenses incurred
during the current plan year are reimbursed through the correct plan year based on available
balances.

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**Check out https://fsastore.com/ to see eligible items and services**

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