As we embark on the last quarter of the year, it is easy to get distracted by all the buzz of open enrollment, the holidays and planning for the next year.
However, it is important not to lose sight of important compliance obligations. Check out our list of the top five compliance tasks to help you close out the year with a strong sense of compliance confidence.
Prepare for Affordable Care Act (ACA) Reporting
Now is the time to start thinking about how to tackle your ACA reporting and consider your options to secure a third-party vendor if you do not plan to complete the reporting in-house. All applicable large employers (ALE) must file Forms 1094-C and 1095-C with the IRS by February 29 or April 1, electronically, and furnish a copy of the 1095-C to all full-time employees by January 31 (extended to March 4 per IRS Notice 2018-94). Despite other changes to the ACA, the reporting requirement remains effective. The IRS may penalize employers who fail to file these forms in a timely manner. For help identifying ACA reporting options available to you, reach out to your OneDigital consultant.
Determine Whether the Extended IRS Electronic Filing Requirements Apply
Effective January 1, 2019, new proposed regulations will extend the IRS electronic filing requirement to more employers who may not have been required to file electronically before due to a change to the non-aggregation rule. For employers, this means that the employer must count all information returns of any type filed with the IRS when determining whether they file 250 or more information returns (the threshold for electronic filing).
Provide Medicare Part D Creditable Coverage Notice by October 15
All employers, regardless of size, sponsoring group health plans with prescription drug coverage must provide notification to Medicare-eligible employees by October 15 regarding the creditable coverage status of the plan. To determine whether your coverage is creditable, annually, you must review your prescription drug plan using generally accepted actuarial principles and following Centers for Medicare and Medicaid Services (CMS) guidelines. Typically carriers will perform this analysis for fully insured plans but the employer retains responsibility for distribution of the notice.
Complete Nondiscrimination Testing to Avoid Income Tax Surprises
Under the Section 105(h) and Section 125 nondiscrimination rules, an employer is prohibited from discriminating in favor of highly compensated individuals. In some instances, an employer may impose class differentiations that are permissible under the HIPAA nondiscrimination rules that may not comply with the Sections 105(h) and 125 rules if it discriminates in favor of highly compensated individuals. Employers should perform their nondiscrimination testing prior to the end of the year so the employer and employee can make any necessary tax and contribution adjustments.
Update Plan Documents With Benefit Changes
If you are making any changes to your benefits package for next year, assess whether these changes impact your existing ERISA, Section 125, and Section 105(h) plan documents, requiring the distribution of a Summary of Material Modification (SMM). You may need to update your plan documents if you have made changes to eligibility, waiting period, carrier, funding, plan sponsor, collective bargaining agreements, benefits offered and more.
For more information on any of these 5 tasks or to learn how your organization can best prepare to meet your year-end compliance requirements, contact your OneDigital consultant.