Benefits Law

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Qualified small employers that offer health reimbursement accounts, but no other major medical plan to employees, don’t have to worry about the Affordable Care Act’s excise tax on group plans that don’t meet the market reform provisions. But contributions may be taxable and subject to withholding.

What’s in a name? An awful lot if you use an off-the-shelf 401(k) plan. You don’t have to spend big bucks to design and maintain an individualized plan and the IRS doesn’t have to spend its limited time and resources auditing that plan.

The IRS generally frowns on 401(k) plans that allow employees to take out loans. And it has come down like a hammer when employees whose accounts hold more than $100,000 in vested benefits take out multiple loans during the same year.
In a significant win for these organizations, the U.S. Supreme Court has ruled that defined benefit pension plans offered and maintained by hospitals associated with religious organizations are, nevertheless, church plans, which are excluded from ERISA, the federal benefits law.
One of the first things IRS auditors examine when auditing 401(k) or 403(b) plans is documentation backing up hardship distributions made to employees who need cash. New exception: New instructions to auditors ease this substantiation burden by allowing plans to ditch retaining original documentation in favor of summaries of employees’ financial need.
It’s becoming increasingly hard to find a human to talk to when you pick up the phone. It was inevitable that automated advisers—called robo-advisers—would seep into the 401(k) arena.
Employees are always vested in the amounts they contribute into their 401(k) plan accounts on a pretax basis. The same isn’t true for employer matching contributions, which means that 401(k) plans must account for forfeitures when employees leave before they become vested.
Final regulations allow cities, counties and other political subdivisions with populations equal to or greater than the population of the least populated state to require private employers without retirement plans to auto-enroll employees into IRAs without running into ERISA.
Three federal agencies—the IRS, the Department of Labor and the Department of Health and Human Services—hold sway over group health plans. Each agency has issued regulations that will affect your group plan.
Double dips are great for ice cream cones, but not group health benefits.
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