Cafeteria Plan Direct

DOL NOW FULLY ENFORCING FFCRA PAID LEAVE RULES FOR CORONAVIRUS

After observing a 30-day non-enforcement period to help employers come into compliance with new paid leave rules, the U.S. Department of Labor (DOL) has announced that it is fully enforcing all provisions of the Families First Coronavirus Response Act (FFCRA).

The FFCRA requires private employers with fewer than 500 employees and certain government employers to provide paid leave for their employees, either for the employees’ own health needs or to care for others, for reasons related to the coronavirus (COVID-19) pandemic. These requirements apply for employee leave taken between April 1 and Dec. 31, 2020.

Now that the temporary policy has expired, the DOL is fully enforcing the FFCRA. Employers may still face retroactive penalties for violations committed during the non-enforcement period under certain circumstances. According to the DOL’s frequently asked questions (FAQs) about the FFCRA, the agency will retroactively enforce violations back to the effective date of April 1, 2020, if employers have not remedied the violations. Penalties for FFCRA violations include civil lawsuits and criminal charges punishable by imprisonment and fines of up to $10,000.

The laws take effect within 15 days of passage; the leave benefits will expire on Dec. 31, 2020.

EMPLOYERS: UPDATE YOUR SECTION 125 PREMIUM ONLY PLAN BY JANUARY 1, 2019

Section 125 Premium Only Plans allow employees to pretax or avoid paying income taxes on their portion of employer sponsored health insurance plans and some forms of non-employer-sponsored health insurance premium. January marks the beginning of a new Section 125 plan year for most employers.
If your company takes advantage of Section 125 pretax deductions you might want to verify that you actually do have a current Section 125 Plan Document. It’s not unusual for employers to take Section 125 insurance pretax deductions for years without knowing that a formal plan document and summary plan description are required by the IRS and Department of Labor.

For the unfortunate employer who goes into a IRS audit without a current Section 125 plan documents the result could be reclassification of all pretax insurance deductions back to taxable income. The IRS then could assess and add interest and penalties on the unpaid taxes.

Many more employers have Section 125 Plan Documents that have never been updated. These employers are making administrative decisions based on outdated tax law and could be allowing events that would disallow their plan. If your Section 125 Plan Document hasn’t been updated since 2010 you should seriously consider updating it this January. Also, the Department of Labor requires employers to distribute new summary plan descriptions to employees once every five years.

If your Section 125 Plan Document is old, outdated or missing, the New Year would be a good time to update it. How much does it cost to update or replace an old Section 125 plan? Cafeteria Plan Direct has been helping employers amend or replace their Section 125 plan document for just $79 (Basic PDF). www.cafeteriaplandirect.com

Thinking About An Association Health Plan? Read The Fine Print Federal officials say loosening the regulation of these plans will offer small businesses a more affordable health insurance option, but critics are wary.