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The Cruel Catch-22 Of Long-Term Unemployment

The Cruel Catch-22 Of Long-Term Unemployment

It seems like it’s easier for people to find a job if they’re already employed. Consequently, it seems like the longer someone is unemployed, then the more unemployable he or she may appear. To combat this perception the Department of Labor has announc…

Do You Need to Amend Your Health and Section 125 Plans?

Many group health plans will need to be amended to reflect the required changes to benefits and waiting periods that take effect in 2014. Employers also should consider whether eligibility language will need to be updated to reduce the number of hours the employee must work to be eligible, to address look-back periods, and/or to base eligibility on actual hours worked instead of the “regularly scheduled to work” standard that is common now.

The Cruel Catch-22 Of Long-Term Unemployment

It seems like it’s easier for people to find a job if they’re already employed. Consequently, it seems like the longer someone is unemployed, then the more unemployable he or she may appear. To combat this perception the Department of Labor has announc…

How to Survive a DOL Audit

By Josie Martinez
Senior Partner and Legal Counsel 

EBS Capstone, A UBA Partner FirmDOL Audit

The Department of Labor (DOL) collected more than $1.6 billion in fines in fiscal year 2013 and has hired 700 new agents to enhance its enforcement and plan audit efforts.  As a result of an uptick in DOL audits, those employers that might not have been targeted before are now being targeted, regardless of size, industry, or location.  What we have come to learn is that the easier and smoother an employer makes the audit process for the auditor, the less painful the audit will be for the employer.  What may have been scheduled as a multi-day audit can instead be wrapped up in a matter of hours.  Preparation and organization are vital. 

Recently, it seems that the audit letters received by employers grant a short window of time until the on-site field investigation is scheduled to take place, thereby making adequate preparation almost impossible, particularly when one considers the fact that many of the documents requested need to be obtained from third parties.  Therefore, upon receipt of the DOL audit letter, an employer should immediately contact the DOL investigator assigned to the case and ask for a 30-day extension.  This will give the employer some breathing room to collect and organize the necessary information. 

Break down what the DOL wants.  Along with the audit letter, the employer will receive an attachment that lists the various documents and information requested. Sometimes, requests such as “Materials describing …” or “samples of …” are vague.  It is important to identify exactly what documents and information will be responsive to each request before the collection process can begin so you have a thorough, exhaustive list of what documents to obtain and from whom to request them.

Collection of requested documents and information.  Having created a detailed list of the necessary documents, it is now time to reach out to carriers and relevant third parties to obtain the necessary documentation.  As the documents arrive, each should be indexed in a folder according to the DOL request to which each is responsive.  For example, if the DOL request number 1 seeks “plan document and all amendments,” then the employers’ wrap document should be identified to respond to this particular request.  It is also wise to designate sections of documents or excerpts from plan documents that may be responsive to a particular request and have those provisions copied separately so that the auditor does not have to search for the information relevant to the request.  The more specific and narrow the employer is in providing the information, the easier it will be for the auditor to review it. 

Provide a roadmap. To make the process even more efficient, provide a log detailing the request number, the item description and the responsive documentation including any necessary comments so that the auditor has a master list from which he or she can work.  The list helps to demonstrates that every request has been met and, if not, the reason why such documents are not available, or why such information is not applicable and does not exist.

Whatever process the employer chooses to follow in order to prepare for the on-site investigation, preparation, organization, and accessibility of information are critical to an efficient audit.

Do You Need to Amend Your Health and Section 125 Plans?

PPACA ReadinessMany group health plans will need to be amended to reflect the required changes to benefits and waiting periods that take effect in 2014. Employers also should consider whether eligibility language will need to be updated to reduce the number of hours the employee must work to be eligible, to address look-back periods, and/or to base eligibility on actual hours worked instead of the “regularly scheduled to work” standard that is common now.

Section 125 plans have until December 31, 2014, to amend the plan for any or all of these changes:

  • The required reduction in the maximum employee contribution to a health care FSA of $2,500
  • A one-time opportunity to make a mid-year change during the 2013-2014 plan year because of the individual mandate and/or opening of the health Marketplace [available to non-calendar year plans only]
  • Adoption of the newly permitted health care FSA rollover (and elimination of any available grace period)

HRAs must be amended to allow an employee, or a former employee, to permanently opt out of and waive future reimbursements from the HRA and to provide that upon termination of employment either the remaining amounts in the HRA will be forfeited or the employee will be permitted to permanently opt out of and waive future reimbursements from the HRA.  The IRS has added this requirement because a person is ineligible for a premium tax credit if covered by minimum essential coverage. HRAs are considered minimum essential coverage, and the IRS does not want individuals to lose a premium tax credit simply because they have a small balance in their HRA.

Health plan amendments are an important part of preparation for PPACA. For information on all aspects of PPACA readiness, including determining “large employer” status, 2014 benefit requirements, and 2015 requirements for large employers, download Preparing for PPACA – A Readiness Checklist.

Employee Spotlight – Diane Vlachos

The team we have here at Byrne, Byrne and Company is our greatest asset to both our company and the clients we serve daily. The Employee Spotlight is to help our clients get to know the staff they work so closely with and rely on personally and professionally! Read below to learn more about Diane … Continued

What Makes Wellness Work?

More than 75 cents of every health care dollar spent in the United States goes toward treating chronic diseases such as arthritis, asthma, cancer, cardiovascular disease, and diabetes, according to the Centers for Disease Control and Prevention. Becaus…

U.S. Surgeon General’s Report May Spur More Wellness Program Activity

A U.S. Surgeon General’s Report issued in January marks fifty years since the Surgeon General’s landmark report in 1964 that set in motion a nationwide campaign to reduce and hopefully eliminate tobacco smoking in the United States. Also in January, rules under the Affordable Care Act (ACA) went into effect, enhancing employers’ ability to provide financial incentives to employees to “kick the habit!”

Form 5500 Filing Requirements

Form 5500 Filing Requirements
Tuesday, May 13, 2014 – 2:00 p.m. ET / 11:00 a.m. PT

Most employee benefit plans are required to file a Form 5500 annually, and penalties for not meeting this obligation can be costly. During this 90-minute basic-to-…