Tag: cafeteria plan

Summary plan descriptions (SPDs) are required for all retirement, health, and welfare plans subject to the Employee Retirement Income Security Act of 1974 (ERISA). However, misconceptions about this requirement are widespread. ERISA attorney Stacy H. Barrow, partner with Marathas Barrow Weatherhead Lent LLP, had a chat with ThinkHR about the importance of having proper ERISA…

Question: Can a company deduct premiums for a voluntary cancer, hospital indemnity, and/or accident policy on a pre-tax basis? New Release: Get the Top 10 Questions in 2014 Whitepaper Answer: These types of policies may be included under the employer’s cafeteria plan (also called a § 125 plan) that allows employees to make pre-tax contributions, but…

Question: What is the grace period after the plan year ends for an employee with a Dependent Care FSA to use the funds? Answer: The IRS allows for a grace period of up to two months and 15 days after the plan year ends. However, an employer may adopt a different grace period within that…

Question: We have an interesting situation with an employee and his family who are on an individual health plan and not covered by the company group health plan.  The wife is now pregnant and the individual plan does not cover pregnancy, so they would like to enroll on our health plan mid-year.  We checked with the…

Question:   We are over 2% owners of an LLC and understand that our health premiums are fully taxed — we cannot have pre-tax health premiums like we provide for our employees.  Is there any provision in the ACA to treat owner-employees like regular employees and allow pre-tax health premiums in the future? Answer:  At this…

Question: Is the new FSA maximum of $2,500 based on the calendar year or the plan year if it falls outside of January to December? Answer: This is based on the plan year, not the calendar year.  The IRS issued additional guidance (http://www.irs.gov/pub/irs-drop/n-12-40.pdf) that clarifies this issue as follows:  “Because employees make salary reduction contribution…