Quick Reference for IRS-Issued Notice Concerning FSAs

What has changed?
On October 31, 2013, the Internal Revenue Service (IRS) issued Notice 2013-71 providing that a cafeteria plan may allow up to $500 of a participant’s balance at the end of the plan year to be carried over into the next plan year and used for eligible medical expenses incurred during that next plan year.

Is the change mandatory?
The change announced in Notice 2013-71 is optional. Cafeteria plans are not required to permit this carryover.

What are the implications if my organization does decide to permit the $500 carry over?
This change does not affect the maximum amount that may be contributed by a participant to an FSA for a plan year and does not reduce the participant’s maximum FSA contribution for the next plan year. Therefore, a participant who carries over $500 from Year 1 to Year 2 and contributes $2,500 to his or her FSA for Year 2 could receive reimbursements for up to $3,000 of eligible medical expense during Year 2 from his or her FSA.

What does my organization need to do in order to make this change?
A plan may not offer a participant the option to carry over an unused amount and allow a grace period. In order for a participant to be able to carry over unused amounts, any grace periods must be removed from the existing plan and the plan must then be amended to permit a carryover.

Grace Periods:
Plan sponsors who currently offer a grace period will need to decide whether the grace period or the carryover option is a more desirable plan design. If the carry over option is more desirable, then the grace period provision must be removed prior to permitting carryovers.

Amendments to Existing Plans:
Plans are not required to adopt either the carryover option or a grace period option. However, if your organization wants to permit carryovers, the grace period must be removed (if present) from the existing plan and then the amendment allowing a participant to carry over up to $500 of unused amounts must be adopted on or before the last day of the plan year from which unused amounts are to be carried over. So, your plan needs to be formally amended by December 31, 2014, if the carryover option is being adopted for 2014 for a calendar year plan – or any time before the last day of the plan year that begins in 2014 to permit carryover of amounts from a plan year beginning in 2013.

CEO Paul J Burt to Serve as Panelist at Restore Illinois Summit

Paul J. Burt and Congressman Randy Hultgren to Participate in Session Evaluating PPACA

November 1, 2013 (Buffalo Grove, Illinois) – Paul J. Burt, CEO of WestLake Financial Group, Inc., along with Congressman Randy Hultgren of the 14th district of Illinois will participate in a session evaluating the implications of PPACA at the first annual Restore Illinois Summit. The summit, hosted by the Americans for Prosperity Foundation, will include sessions across a myriad of topics – including social media, technology, and healthcare reform. The summit will take place at the Donald E. Stephens Rosemont Convention Center in Rosemont, Illinois, on Saturday, November 2.

Paul J. Burt, an expert in technology and benefits administration, founded WestLake Financial Group, Inc. in 1991. A pioneer in the field of human resources outsourcing and benefits administration, Burt redefined the delivery of benefit information to employees through WestLake’s cutting edge technology and value-added services. Burt’s insightful leadership and ideas have propelled WestLake Financial Group to the top tier of benefit technology, consulting, fthird party administration and brokerage services for mid to large organizations nationwide. In 2004, Burt was inducted into the Chicago Area Entrepreneurship Hall of Fame, in recognition for his entrepreneurial achievements and lasting impact on Chicago’s business landscape.  Burt is the corporate chair of the 2014 American Heart Association’s Chicago Heart Ball.

WestLake Financial Group, Inc.

Recognized as a leader in benefits administration for over 24 years, WestLake Financial Group, Inc. delivers leading edge solutions and programs to human resources professionals. A pioneer in internet-based benefits solutions, WestLake Financial Group has saved clients between 20% to 40% of their combined HR administrative time. Through the introduction of Dependent Eligibility Verification Audits, Spousal Disincentive Administration, Tobacco User Disincentive Administration, and other innovative programs, WestLake Financial Group assists clients in reducing costs while maintaining superior quality. For more information on WestLake’s full spectrum of benefit administration services, visit westlakefinancialgroup.com.

article

The Feds released more regulations on how insurers and some large employers need to report on plans they are offering and the people that are enrolled one day before the exchanges are set to open.

See this article from The Hill for further clarification.

 

WestLake Financial Group, Inc.

1477 Barclay Blvd

Buffalo Grove, IL 60089

888-WESTLAKE

Affordable is a Relative Term

We have heard reports that the Health Exchange premiums will be lower and affordable, but that would depend on the consumer.  What may be affordable for one person may not be affordable for another with the same income.

This article from Kaiser Health News does a great job going into further detail.

 

WestLake Financial Group, Inc.

1477 Barclay Blvd

Buffalo Grove, IL 60089

888-WESTLAKE

No Penalty for Not Providing 10/1/2013 Exchange Notice

In a recently posted FAQ on the U.S. Dept. of Labor website, the question was asked if there would be a penalty or fine for not providing the notice of the Health Insurance Market place. The answer is no.

Here is the link.  Does this affect your decision as an employer to send this notice out?

 

WestLake Financial Group, Inc.

1477 Barclay Blvd

Buffalo Grove, IL 60089

888-WESTLAKE

How are you keeping track of all the PPACA penalties?

There are more than 10 different things to comply with that fall under the “general compliance” penalty of $100-a-day.  Do you know what those are and if so, who is making sure that your company is complying?

See this article for further explanation of these and more penalties.  And give us a call if you are in need of some help keeping track of them.

 

WestLake Financial Group, Inc.

1477 Barclay Blvd

Buffalo Grove, IL 60089

888-WESTLAKE

What's Obamacare?

With the insurance exchanges set to open October 1st, many Americans are still very unfamiliar with what health care reform does and what it means to them.  If few people go to the exchanges to sign up for coverage, how will it effect the success, or lack there of, of the exchanges?

This article from cnbc.com by Dan Mangan explores this further.

 

WestLake Financial Group, Inc.

1477 Barclay Blvd

Buffalo Grove, IL 60089

888-WESTLAKE

Massive Spike in Health Care Costs

With all the added fees and the costs of having to cover dependent children to age 26, who do you think will shoulder the burden of these costs?  That’s right, the employee.

See this article about how it will be affecting Delta from Fox News by Judson Berger.

 

WestLake Financial Group, Inc.

1477 Barclay Blvd

Buffalo Grove, IL 60089

888-WESTLAKE

More Union Favoritism?

An article just out today by Forbes says that the White House is considering giving subsidies, that were initially intended for the uninsured, to unions.  Is this an effort to placate the union outcry regarding Obamacare?

See the complete article here by Avik Roy.

 

WestLake Financial Group, Inc.

1477 Barclay Blvd

Buffalo Grove, IL 60089

888-WESTLAKE

Obamacare to Encourage Smoking?

Obamacare allows people to be charged higher premiums if they are a tobacco user.  Because of this, some people may not be subject to the individual mandate by saying that they smoke.  Incredible.

See this article from The Orange County Register by Joel Hay for the complete details.

 

WestLake Financial Group, Inc.

1477 Barclay Blvd

Buffalo Grove, IL 60089

888-WESTLAKE