Flexible Spending Accounts
For 2018, the dollar limitation on employee salary reduction contributions to a Health Flexible Spending Account will increase by $50 to $2,650 per plan year.
Adoption Assistance FSA
The maximum amount that may be excluded from an employee’s gross income under an employer-provided adoption assistance program for the adoption of a child will increase to $13,840 for 2018.
Qualified Small Employer Health Reimbursement Arrangement
To qualify as a qualified small employer Health Reimbursement Arrangement, the total amount of payments and reimbursements cannot exceed $5,050 for single coverage and $10,250 for family coverage.
Commuter Plan – Parking & Transit Account
The maximum monthly contribution amount for both the Parking and Transit Accounts will increase by $5 to $260 for 2018.
For 401(k), 403(b) and most 457 plans, the 2018 elective deferral limit will increase to $18,500. The catch-up contribution limit for employees ages 50 and over who participate in 401(k), 403(b), and most 457 plans will continue at $6,000.
The limitation used in the definition of highly compensated employees under Section 414(q)(1)(B) for 2018 will remain unchanged at $120,000.
For further questions please contact your P&A Group account representative at (800) 688-2611 or visit www.padmin.com.
Open Enrollment is often a hectic time for companies and their HR departments, so we’re all about making it easier in any way we can. That’s why P&A offers online enrollment – at no additional cost – for your Flexible Spending Account (FSA) renewal. This secure enrollment option is available for any size company that has more than 25 eligible participants.
What exactly does online enrollment entail? It’s easy. First, let your renewal rep know that you want to use the online enrollment platform. Next, determine the window of dates you want online enrollment to be available to your employees. Then, we’ll provide you with a file template asking for your employees’ main demographic info. All that’s required of you is to complete the eligibility file and upload it securely to P&A’s employer portal, HR Connect. P&A’s online enrollment team does the rest. Pretty easy, right?
P&A’s online enrollment solution gives your employees more freedom when it comes to enrolling in their FSA plan – they can log in at any time and change their election amount during their open enrollment window. It also gives employees the opportunity to make other changes to their accounts, like signing up for direct deposit and taking advantage of P&A’s text messaging features. With the elimination of paper forms and multiple file formats, online enrollment makes it easy for your company to renew its FSA plan.
To get setup with online enrollment this Open Enrollment, contact your P&A representative or click here to submit an inquiry.
Online Enrollment Advantages
- Provides employees an easy way to re-enroll in their FSA
- Allows employees to make their own election changes during the Open Enrollment window
- Reduces paperwork and time spent collecting enrollment forms and processing last minute changes
- P&A provides a secure, password protected file in HR Connect with your company’s online enrollment results
Joe Priselac (left) and Michael Rizzo (right) receive the 2017 Fast Track Award
Michael Rizzo, President of P&A Group and Joe Priselac, CEO, were awarded the 2017 Fast Track Award last week by Business First. The Fast Track list ranks companies based on revenue growth over the last three years. P&A Group celebrates 18% growth with this award!
“While P&A Group is no newbie to the employee benefits industry, we feel fortunate to continue growing organically and successfully in a competitive industry. P&A is successful because our employees are – they embody what is needed to achieve client and participant satisfaction through excellent customer service,” says Joe Priselac.
The award ceremony, held in downtown Buffalo’s Westin hotel, honored 54 companies small and large across the Western New York region.
With the first few weeks of summer already officially behind us, many families are settling into new routines, enjoying the perks of summer vacations carefully planned around work schedules and other commitments.
Luckily, there’s some financial relief available on childcare costs this summer through Dependent Daycare Flexible Spending Accounts (FSAs). This kind of pre-tax advantage gives you an average of 30% savings on eligible dependent daycare expenses. If your child/dependent is under age 13, you can use this account to pay for summer day camps and nursery schools, among other qualifying expenses.
Participants in the Dependent Daycare FSA need to enroll in the account during their employer’s Open Enrollment period (check with your HR department to see when yours may be), unless they experience an event that allows them to enroll mid-plan year, like a change in work schedule or moving.
If you are enrolled in a Dependent Daycare FSA, make sure you use your account by the end of the plan year. An IRS rule known as Use or Lose does not allow funds to rollover from year to year, so be diligent in spending all your funds.
For more information about the Dependent Daycare FSA, click here.
The next Patient Centered Outcomes Research Institute (PCORI) filing deadline is July 31, 2017 for all Health Reimbursement Arrangements (HRAs), Medical Expense Reimbursement Plans (MERPs) and self-funded medical plans with a plan year ending in 2016. Click here
to access the schedule of fees and read more information about this excise tax.
Created under the Affordable Care Act, part of PCORI’s funding is through temporary fees imposed on group health plans, HRAs and MERPs.
If you have any questions, please contact a P&A sales representative or your plan administrator, Monday through Friday from 8:30 AM to 5:00 PM ET at (800) 688-2611.
Earlier this year we reported that uberPOOL, Lyft Line and Via fares were being added to P&A’s Benefits Card platform as eligible expenses under the pre-tax Transit Account. We are excited to announce the update is complete and, effective immediately, participants in the pre-tax Transit Account (Section 132 Plan) can use their P&A Benefits Card to pay for these work related commuting expenses.
These fares were not previously authorized expenses with the Benefits Card, so this is a welcomed addition to the transit plan eligible expense list. You can access uberPOOL, Lyft Line and Via using your Benefits Card if you are traveling to or from an eligible city.
You must update the service provider’s mobile application with your P&A Benefits Card. When a ride is requested, please choose the Benefits Card as the payment option. The service provider will automatically send a compliant vehicle. Paying for uberPOOL, Lyft Line and Via fare with the Benefits Cards is currently still restricted to cities that are eligible to leverage these services. The following cities currently leverage these services:
Las Vegas, NV
Los Angeles, CA
New York, NY
San Diego, CA
San Francisco, CA
State of New Jersey
New York, NY
New York, NY
This list is constantly growing, so please check the Uber, Lyft and Via websites for updates.
On May 22, 2017 the DOL published Field Assistance Bulletin No. 2017-02 which announced a temporary enforcement policy related to the Department of Labor’s final rule defining who is a “fiduciary” under ERISA and the related prohibited transaction exemptions (PTEs).
The final rule, entitled “Definition of the Term ‘Fiduciary’; Conflict of Interest Rule — Retirement Investment Advice,” was published in the Federal Register on April 8, 2016, became effective on June 7, 2016, and had an original applicability date of April 10, 2017. The PTEs also had an original applicability date of April 10, 2017, with a phased implementation period ending on January 1, 2018, for the BIC Exemption and the Principal Transactions Exemption. The applicability date was previously delayed from April 10, 2017 until June 9, 2017.
The temporary enforcement policy states that during the phased implementation period ending on January 1, 2018, the Department will not pursue claims against fiduciaries who are working diligently and in good faith to comply with the fiduciary duty rule and exemptions, or treat those fiduciaries as being in violation of the fiduciary duty rule and exemptions.1
1On March 28, 2017, the Treasury Department and the IRS issued IRS Announcement 2017-4 stating that the IRS will not apply § 4975 (which provides excise taxes relating to prohibited transactions) and related reporting obligations with respect to any transaction or agreement to which the Labor Department’s temporary enforcement policy described in FAB 2017-01, or other subsequent related enforcement guidance, would apply. The Treasury Department and the IRS have confirmed that, for purposes of applying IRS Announcement 2017-4, this FAB 2017-02 constitutes “other subsequent related enforcement guidance.”
A Health Reimbursement Arrangement (HRA) is an employer funded benefit that is used to reimburse employees for medical expenses as defined in IRS Code 213(d). You as an employer are able to contribute tax-deductible dollars to the account, allowing employees to receive tax-free reimbursements.
The HRA allows for employees to be reimbursed for the same expenses as a Health Flexible Spending Account (FSA). This includes insurance co-pays and deductibles, dental and vision expenses, and prescription co-pays.
What’s great about HRAs is employers have the flexibility to restrict what can be reimbursed. For example, if you want to only reimburse a portion of the high deductible health insurance, prescription co-pays or just vision-related expenses, you can design the plan with those restrictions. On the flip-side, if you want your employees to receive reimbursement for all eligible medical, dental and vision expenses allowed under IRS guidelines, you can.
What are the benefits for employers?
- Employer contributions to HRAs are NOT subject to payroll taxes, workers’ compensation or pension and profit sharing contributions.
- By combining a higher deductible insurance plan with an HRA, you can lower your company’s health insurance costs!
- Administrative costs are tax deductible and can be paid by the employer, the employee or both
- HRAs complement FSA plans and help to increase FSA participation.
How does combining the HRA and FSA work?
An HRA and FSA work together to give your employees a robust benefits package. Having both plans allows for employees to better manage their health expenses. The HRA provides employees with employer funds and the FSA allows employees to contribute pre-tax dollars to pay for additional out-of-pocket expenses – making it easier to manage those costs. It’s a win-win for both the employer and employee.
Interested in learning more about how an HRA can work for you, contact us today!
Last week the IRS released the inflation-adjusted limits for Health Savings Accounts (HSAs) in 2018. The increases for the 2018 are as follows:
HSA Minimum Deductible
HSA Maximum Out-of-Pocket Expenses
If the ACA replacement bill gets passed in the Senate, there could be more changes coming to HSAs. Under the proposed American Health Care Act, HSAs would benefit with larger contribution caps and a reduction in the early withdrawal penalty for non-medical related items. Currently, HSA holders face a 20% penalty if they withdraw funds prior to reaching age 65 for non-medical expenses. Under this new bill, the penalty would go down to 10%.
P&A Group will continue to monitor this and will keep you informed of any new changes.
Do the majority of your employees have monthly out-of-pocket parking and transit expenses to get to and from work? P&A offers a commuter plan that allows your employees to set aside pre-tax dollars to use for these expenses. This gives both you and your employees a great opportunity to save on state, federal and FICA taxes.
Here’s how the plan works. Your employees estimate how much they spend a month on work-related parking and transit expenses and elect to have that amount withheld pre-tax. So, say an employee sets aside $100 for transit expenses and $50 for parking expenses every month. Your company runs payroll twice a month; therefore, the employee has $75 withheld pre-tax every paycheck. That money is put into a P&A commuter account which the employee can access to pay for monthly parking and transit expenses.&A offers a debit card with the commuter account. Per IRS guidelines, all transit passes (bus, subway, train, etc.) must be purchased with a terminally restricted debit card and are no longer eligible for reimbursement any other way. P&A’s debit card technology meets this requirement, allowing transit passes to be purchased only at authorized transit authority terminals. This ensures that the money the employee sets aside is only used for transit expenses.
Monthly parking expenses are reimbursed on the honors system, meaning no receipt or proof of purchase is necessary to submit a parking claim. The IRS understands that some employees use metered parking or park in lots that do not offer receipts. P&A’s website allows participants to log in and enter their monthly parking expenses easily.
At P&A, we take the burden of executing these plans off your shoulders. We provide extended customer service hours – both over the phone and online. Our participant portal, My Benefits, allows for self-service on the most common questions like, “what’s my balance,” “what’s the status of my claim,” etc. – so you don’t have to play the middle man between us and your employees.
To setup a Commuter Plan or request more information, click here.