An employer that changes its medical plan from fully insured – where the insurance company sets the terms of the policy and retains the risk that claims will exceed the premiums paid – to self-funded – where the employer is responsible for the claims – must re-examine all aspects of the operation of its medical …
Using the New Group Health Plan Fee Disclosure Rules To Reduce Plan Costs
Like a 401(k) plan, a group health plan must comply with ERISA’s rule that prohibits a plan fiduciary from paying more than a reasonable amount for services provided to the plan. When a group health plan offers insured benefits, service providers may receive a commission from the insurance company instead of direct payment from the …
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What do a newly married employee, a long-term employee, and a change of 401(k) recordkeepers have in common? Beneficiary Designation Forms.
A participant in a 401(k), 403(b), or other account-style retirement plan may name a beneficiary to receive his or her account balance after the participant’s death. A recent case, Moore v. NCR Corp. Plan Admin. Comm. (USDC N.D. Ga., Aug. 30, 2021) is a reminder that retirement plan beneficiary forms need to be reviewed and …
Three Tax Principles that HR Professionals Should Know
Although it might not be obvious, tax law permeates most HR responsibilities – from paying an employee, to arranging for benefit coverages, to settling employment lawsuits, and paying pensions. Knowing a few key tax principles may help employers understand why things are done in a certain way, what questions to ask when discussing possible solutions …
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The Hidden Cost of Terminating 20% or More of Your Employees – Partial Termination of the Retirement Plan
With the delay in re-opening businesses, some companies are finding that they need to terminate employees who had been placed initially on furlough or a reduced-hours assignment. When analyzing the costs that will be incurred due to these terminations, companies that sponsor 401(k) plans or other qualified retirement plans should determine if the partial termination …
Benefits Briefs in the Time of COVID-19, Part 7: What Do Layoffs, Leaves, and Furloughs Mean for Retirement Plans?
The COVID-19 pandemic has employers strategizing on how to retain valuable employees while addressing declines in demand for the company’s products or services. Some employers have placed employees on unpaid leave status instead of terminating the employee’s service. Employers may call this unpaid leave a layoff or a furlough. This benefits brief describes how the …
What to Do if Your Company is Close to the Affordable Care Act’s 50 Full-time Employee Threshold
Having recently helped a client determine if it employed on average more than 50 employees per month in a calendar year and therefore was an applicable large employer (“ALE”) subject to the Affordable Care Act (“ACA”) in the following calendar year, I had many opportunities to see the complexities of the ACA’s rules in operation. …
The Top 5 Things to Know if You Are New to 401(k) Benefits Administration
As an advisor to many 401(k) plan sponsors, I have been asked occasionally what advice I would give to a person who is relatively new to retirement plan administration. While some aspects of administration may only be learned through experience, here are my top 5 things to understand about plan administration. 1. Identify the service …
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When to Call Your ERISA Benefits Attorney
If you are responsible for the administration of your company’s retirement plan, you probably reach out to the plan’s record-keeper and investment advisor on a frequent basis. With the extensive bundled services offered by many record-keepers, you may wonder why you even need the name of an ERISA benefits attorney in your contacts list. An …
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Time for Non-Profits to Update Their 403(b) Retirement Plans
Non-profit entities, including schools and universities, that sponsor 403(b) retirement plans should begin the process of restating their plans to comply with current law. This is the first restatement cycle since the December 31, 2009 deadline for sponsors of 403(b) plans to adopt written plan documents. A 403(b) plan is similar to a 401(k) plan …
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