Tag Archives: group benefit plans

Advance Informational Copies of 2017 Form 5500 Annual Return/Report
22nd December 2017 by fgsiteadmin in General

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.

©Copyright 2017 by Danielle Capilla, Senior VP of Compliance and Operations at United Benefit Advisors. Reproduction permitted with attribution to the author.

With Below Average Cost, Increasing Enrollment, CDHPs Have Big Impact
14th December 2017 by fgsiteadmin in News

When most experts think of group healthcare plans, Preferred Provider Organization (PPO) plans largely come to mind—though higher cost, they dominate the marketin terms of plan distribution and employee enrollment. But Consumer-Directed Health Plans (CDHPs) have made surprising gains. Despite slight cost increases, CDHP costs are still below average and prevalence and enrollment in these plans continues to grow in most regions—a main reason why it was one of the top 7 survey trends recently announced.

In 2017, 28.6% of all plans are CDHPs. Regionally, CDHPs account for the following percentage of plans offered:

CDHPs have increased in prevalence in all regions except the West. The North Central U.S. saw the greatest increase (13.2%) in the number of CDHPs offered. Looking at size and industry variables, several groups are flocking to CDHPs:

When it comes to enrollment, 31.5% of employees enroll in CDHP plans overall, an increase of 19.3% from 2016, after last year’s stunning increase of 21.7% from 2015. CDHPs see the most enrollment in the North Central U.S. at 46.3%, an increase of 40.7% over 2016. For yet another year in the Northeast, CDHP prevalence and enrollment are nearly equal; CDHP prevalence doesn’t always directly correlate to the number of employees who choose to enroll in them. Though the West held steady in the number of CDHPs offered, there was a 2.6% decrease in the number of employees enrolled. The 12.6% increase in CDHP prevalence in the North Central U.S. garnered a large 40.7% increase in enrollment. CDHP interest among employers isn’t surprising given these plans are less costly than the average plan. But like all cost benchmarks, plan design plays a major part in understanding value. The UBA survey finds the average CDHP benefits are as follows:

For a detailed examination of the key findings, download UBA’s free 2017 Health Plan Survey Executive Summary. To benchmark your exact plan against others in your region, industry or size bracket, contact a UBA Partner near you to run a custom benchmarking report.

©Copyright 2017 by Bill Olson, VP, Marketing & Communications at United Benefit Advisors. Reproduction permitted with attribution to the author.

Benefit Plan Design: Charging Employees Different Premiums
8th November 2017 by fgsiteadmin in News, Healthcare Reform, General

Employers who are designing a health and welfare benefit plan for their employees often wonder about the rules relating to setting premiums for employees. Employers generally have significant flexibility in this part of their plan’s design. Common structures contemplated by employers include, but are not limited to:

  • Charging all employees a flat amount for their health plan
  • Charging employees a percentage of the premium for the health plan, with the percentage changing as employees move between tiers (self, self plus one, self plus family)
  • Giving employees a set dollar amount that they can use to offset the cost of whatever plan and plan tier they enroll in

Employers are also interested in setting different contribution structures for different groups of employees. Sometimes this is due to a geographic difference between employees, job types, staff versus management, and more. Employers may wish to give lower-paid employees more employer-provided money; sometimes employers wish to give managers or executive staff more employer-provided money.

Employers should be aware that there are different nondiscrimination requirements to consider.

Generally, under HIPAA non-discrimination rules, employers have discretion when structuring their benefits plans and may make distinctions among employee populations regarding access to and the level of benefits offered. Plans may differ among employees only on “bona fide employment-based classifications” consistent with the employer’s usual business practice. Examples that would satisfy this requirement include salaried, hourly, full-time, part-time, type of job, geographic location, date of hire, division, subsidiary, business unit, and profit center distinctions.

If an employer’s proposed structure meets these basic HIPAA requirements, then the employer needs to review the applicable nondiscrimination requirements under Internal Revenue Code Section 125 (for cafeteria plans) and Section 105(h) (for self-funded plans). If the employer’s plan is subject to these rules, at a most basic level, the plan cannot favor highly compensated individuals. Sometimes an innocent plan design can lead to an employer failing the nondiscrimination requirements under Section 125 or 105(h) without the employer intentionally favoring the highly compensated employees. Many employers also erroneously assume that none of their employees fall into the “highly compensated” category, so the rules do not apply to them. As a best practice, any time an employer has a plan design with different levels of employer contributions, the employer should run the applicable testing to ensure its plan is compliant.

Under Section 125, benefit plans cannot discriminate in favor of highly compensated individuals or key employees. For definitions of highly compensated and key employees, as well as the consequences of violating HIPAA nondiscrimination rules and failing section 125 or 105(h) nondiscrimination tests, request UBA’s Compliance Advisor, “Benefit Plan Design: Charging Employees Different Premiums”.

©Copyright 2017 by Danielle Capilla, Senior VP of Compliance and Operations at United Benefit Advisors. Reproduction permitted with attribution to the author.