Have you Checked Your Year-end List?
Tuesday November 11th, 2014
Estimated time to read: 2 minutes, 15 seconds
Some of us make lists for everything – spring cleaning, errands, groceries and daily tasks. There's one list that HR, payroll and benefit professionals should definitely have – their year-end requirements.
Here are some items that should be on that list:
- Open enrollment applies to COBRA Qualified Beneficiaries (QB) just as it does for active employees. QBs are entitled to the same options and benefits as similarly situated active employees, including notifications, rate changes and the ability to switch to another plan, if applicable. If you have an outside administrator, remember to notify them of new plans, changes in rates and any changes that QBs made during open enrollment.
- ERISA plan changes will require notification to affected participants in the form of a Summary of Material Modifications or an updated Summary Plan Description.
- Remind employees to review personal information for accuracy on information such as correct address and Social Security Numbers.
- Review updated federal limits to confirm proper plan compliance.
- Grace periods are available for Health and/or Dependent Care Flexible Spending Accounts (FSAs). Employers with calendar-year plans, who are adopting grace periods for the first time, must amend plan documents before the end of 2014. Employers adopting a Dependent Care FSA grace period may continue to report the amount of 2014 deductions in Box 10 of the W-2, which generally must be distributed by January 31, 2015.
- Health FSA limit on salary reduction contributions for plan years starting in 2015 is $2,550.
Health Savings Accounts (HSAs)/High-Deductible Health Plans (HDHPs) for 2015:
- The HSA annual contribution maximums increase to $3,350 for individual and $6,650 for family coverage.
- For HSA-compatible HDHPs, the annual out-of-pocket spending limits are $6,450 (individual) and $12,900 (family).
- The HDHP minimum deductible remains the same at $1,300 for individual and $2,600 for family coverage.
- HSA age 55 catch-up contributions stay at $1,000.
- Transportation Plan monthly limit for 2015 transit pass/vanpooling remains at $130. Qualified bicycle commuting remains the same at $20 and parking limits increase to $250.
- Nondiscrimination testing thresholds for key employees remain at $170,000 and highly compensated employees increases to $120,000 for 2015.
- Mileage rates for 2015 should be announced in December 2014.
W-2 reporting of employer-sponsored health coverage. The Affordable Care Act (ACA) requires employers to report the cost of health coverage on W-2s.
- Employers must report the aggregate cost of coverage, both the employer and employee portions, even if some of it is paid on a post-tax basis. Special rules come into play with flex credits through a §125 cafeteria plan.
- Employers are not required to report the following coverages: Health FSA, HRA, stand-alone dental or vision, HSA and Archer MSA, long-term care, on-site medical clinics, church plans or governmental plans.
- Payroll schedule for 2015 should be verified with your payroll provider with next year's pay dates, period ending dates and quarter closing dates.
- Confirm wage, tax and benefits data for payroll administrator to make sure that deferred compensation plan types are correct. Also verify employee contribution amounts, including employee benefit portions for group health plans and life insurance along with sick pay, long-term disability, taxable fringe benefits and qualified pension. Depending on your state, the minimum wage rates may increase above the federal minimum.
- State Unemployment Insurance Tax rates for your state should be verified for payroll.
- Interim wage and tax register should be reviewed for employee data, state/SUI credit report for employees who have a quarter credit condition and the SIT credit report for employees who have a year-end credit condition.
- Schedule bonus and adjustment payrolls, as applicable.
- Compare Forms W-2 to state and local report totals to ensure accuracy.
- Print and distribute W-2 statements to employees prior to January 31, 2015.
- Verify month-end close-out dates for accuracy with payroll.
- Reconcile taxable earnings and employee tax withholding at the end of the year as you prepare the 941 and 940 deposit and state unemployment tax forms.
This list may appear to be overwhelming, but the right action plan can get things checked off, keeping your year-end running smoothly.
Are you prepared for all of the year-end requirements?
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