Category Archives: Benefit Plans

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Time for a 401(k) Plan Spring Cleaning?

Spring
Now that spring is in the air, it might be a good time to dust off your 401(k) plan document and do a quick checkup. This post walks through five issues we recommend considering as you jump into your spring cleaning:… Continue reading this entry

DOL at it Again: New Proposed Rules Published to Clarify Regular Rate

Proposed
On March 28, 2019, the U.S. Department of Labor (DOL) announced a new proposed rule that would clarify that certain payments and benefits provided by employers do not factor in to employees’ “regular rate,” which is used to calculate overtime pay. This latest announcement is on top of a flurry of recent activity from DOL … Continue reading this entry

Summary Plan Descriptions: You Gotta Have Them, So Make the Most of Them

summary
Administrators of plans subject to ERISA (including plans sponsored by for-profit and nonprofit businesses and organizations[1]) must provide participants and beneficiaries with summary plan descriptions (“SPDs”) describing “the most important facts they need to know about their retirement and health benefit plans including plan rules, financial information, and documents on the operation and management of … Continue reading this entry

Deferred Compensation Plans and FICA Taxes: A Valentine’s Day Match or Disaster?

Taxes
While February is usually the month for valentines and candy conversation hearts, I hope you will use this month to give a little love and attention to one of the often overlooked “other” taxes applied to payments from nonqualified deferred compensation plans (NQDC Plans)—FICA taxes! Companies commonly fail to implement the unique FICA tax rules … Continue reading this entry

Under Developing IRS Guidance (Not Final), an Employer Would Be Able to Fully Satisfy ACA’s Employer Mandate Without Maintaining Group Health Plan

ACA
Takeaway Message: A recent IRS notice provides a future path for employers to avoid ACA employer mandate penalties by reimbursing employees for a portion of the cost of individual insurance coverage through an employer-sponsored health reimbursement arrangement (HRA). While the notice is not binding and at this stage is essentially a discussion of relevant issues, it … Continue reading this entry

Proposed Hardship Withdrawal Regulations Provide Useful Guidance

While not exactly a Thanksgiving “miracle,” many retirement plan sponsors were no doubt thankful for the IRS’ recent issuance of proposed regulations (the “Proposed Regs”) addressing changes to the Code §401(k) and 403(b) plan hardship withdrawal rules enacted as part of the Bipartisan Budget Act of 2018 (the “Act”). The Proposed Regs answer several questions … Continue reading this entry

Proposed Regulations Would Permit Employers to Reimburse an Employee’s Premium Costs for a Health Insurance Policy Purchased in the Individual Market

regulations
Takeaway Message: Except in limited circumstances, current regulatory guidance prohibits an employer from maintaining a health reimbursement arrangement (HRA) that reimburses the cost of premiums for individual health insurance policies purchased by employees in the individual market. Proposed regulations (found here) aim to eliminate this prohibition, if certain conditions are met.… Continue reading this entry

Check Your COBRA Notices in Order to Avoid Potential Lawsuits

ACA
Have you thought about your COBRA notices recently? Of course not, because COBRA notices don’t warrant your valuable time. They are just another one of those pesky notices that the law requires you to send. If that was your reaction, you may want to rethink it.… Continue reading this entry

Incentive Compensation That is Never Subject to Income Tax – Too Good to Be True?

Incentive
Clients frequently ask if they can provide incentive compensation to their employees and executives in a manner that gives them flexibility and drives performance, but receives coveted capital gains treatment. This usually sounds too good to be true. In most cases, you can defer or sometimes minimize income tax for employees (retirement plans, deferred compensation … Continue reading this entry

Non-Qualified Retirement Plans & Divorce: You May be Able to Honor DROs, But Should You?

Spring
You probably already know that employers are required to honor qualified domestic relations orders (commonly referred to as “QDROs”) regarding the division of qualified retirement plan benefits (such as 401(k) balances) when an employee gets divorced. However, many employers mistakenly assume that they must also honor domestic relations orders (“DROs”) related to nonqualified retirement plans … Continue reading this entry

A New Way to Use Your 401(k) Plan to Attract and Retain Recent Graduates

401(k)
According to a recent report, the average student loan debt for a Class of 2016 graduate is $37,172. As recent graduates enter the work force, they often choose not to contribute to their employers’ 401(k) plans and lose out on corresponding employer match because they prefer to focus on paying off their student loans or … Continue reading this entry

How Do I Report Non-Qualified Plan or Severance Payments to a Former Employee? Hint: You Should Probably Use a W-2, Not a 1099!

Payments
Employers commonly make payments to former employees for a number of reasons. Two of the more routine payments are those from a non-qualified deferred compensation plan (such as payments from a supplemental executive retirement plan or a 401(k) restoration-type plan) or pursuant to a severance arrangement, and sometimes both. (Other termination- or settlement-type payments, such … Continue reading this entry

Details Matter: Medical Plan Anti-Assignment Clauses Protect Employers

regulations
Yes, details matter. This is true on many fronts, including whether the documents governing the medical plan offered to employees prohibit employees and their dependents from assigning their plan benefit rights to a health care provider.… Continue reading this entry

April 1, 2018 is Fast Approaching – Are Your Disability Claims Procedures Ready?

Disability
The Department of Labor issued the final disability claims regulations on December 16, 2016. These regulations are effective for all claims filed on or after April 1, 2018. The Department felt the update was needed to provide claimants a full and fair review, to promote fairness and accuracy, and to better protect participants.  The Department … Continue reading this entry

An Annual Retirement Plan “Check-Up” May be Just What the Doctor Ordered!

Taxes
February is Heart Health Month, which always reminds me to schedule my annual doctor checkup. This got me thinking that the need for ongoing “checkups” and maintenance applies not just to our health, but to our homes, cars, and even to your company’s retirement plans!  That’s right—if you work with your employer’s tax-qualified retirement plans, … Continue reading this entry

Tax Reform and Employee Benefits – What You Need to Know Now

Tax
As you have probably heard by now, the recently enacted Tax Cuts and Jobs Act (the Tax Reform Act) made significant changes to the Internal Revenue Code. With regard to executive compensation, the Tax Reform Act made widely publicized changes impacting public companies and nonprofit entities.  The new law also made changes affecting employer-provided retirement, … Continue reading this entry

Cybersecurity Risks to Employee Benefit Plans - Are You Prepared?

Cybersecurity
Unless you’ve been living on a remote mountaintop or inside a cave for the past 10 years, chances are good you’ve either been affected by a cybersecurity breach or know someone who has. Among many other businesses, recent cybersecurity breaches have affected large retailers and bankers, internet providers, and even the U.S. government.  The 2017 … Continue reading this entry

Unlike Diamonds, You Cannot Presume Retiree Medical Benefits Are Forever

Employer
Last week, the United States Supreme Court issued a decision that gives unionized employers in Michigan, Ohio, Tennessee, and Kentucky greater ability to modify medical benefits they provide to retirees pursuant to current and prior collective bargaining agreements. Employers in these states were previously subject to the unique case law from the United States Court of … Continue reading this entry