We support our partners and clients by assuring compliance with various agencies including the Department of Labor, Department of Treasury, and Internal Revenue Service in the administration of various benefit programs.
Our compliance services include:
Our professionals are knowledgeable of the challenges that may arise while completing timely, accurate and thorough Form 5500 filings. With extensive experience assisting clients with such filings, The Harrison Group can assist with a wide array of unique situations.
Employers with more than 100 participants in their welfare benefit at the beginning of their Plan Year are required to file Form 5500 with the US Department of Labor.
Form 5500 preparation can be a time-consuming process. Human Resources staff often lack the manpower or specialized skills required to complete documents effectively. The penalties for late filing can be significant.
Employers must file the Form 5500 return by the last day of the seventh (7) month after the Plan Year end. For calendar year plans, the due date is July 31st of the following year. If necessary, it is possible to obtain a one-time extension of two and one-half months to file the return. Where a filing is not done until after the due date, plus the available extension, then there may be significant penalties imposed.
In order to limit the amount of penalties, it is possible to file delinquent return in compliance with the Delinquent Filer Voluntary Compliance Program (DFVCP). This program limits the penalties to $2,000 for one return and $4,000 for more than one.
We perform the following as part of our Form 5500 Preparation Service:
The Affordable Care Act imposes a fee on issues of specified health insurance policies and plan sponsors of applicable self-insured health plans to help fund The Patient Centered Outcomes Research Institute (PCORI). Health Reimbursement Arrangements and Flexible Spending Accounts may be subject to a PCORI Fee. The fees are based on the number of plan participants.
If the plan is insured, the insurance carrier pays the fee on behalf of the policyholder. If the plan is an applicable self-insured plan, including HRA’s, the employer is responsible to file Form 720 and pay the fees directly to the Internal Revenue Service.
Plan Years ending prior to October 1, 2019 are required to pay PCORI fees.
We prepare and file Form 720 for our clients in an accurate and expedient manner.
Healthcare FSAs and Dependent Daycare FSAs are subject to IRS’ non-discrimination requirements. Under the Code, these FSAs must not discriminate in favor of highly paid and key employees.
The non-discrimination testing rule is complex and evaluates three areas: Eligibility, Availability, and Utilization. The plan’s eligibility must include a significant number of non-highly compensated employees, be available to enough non-highly compensated employees, and enough non-highly compensated employees must participate in the FSA.
For the Healthcare FSA, there are two tests: Eligibility and Benefits tests. Testing is required by section 105(h) of the Internal Revenue Code. If an HCFSA fails either of the tests, the favorable tax treatment for highly compensated individuals participating in the plan will be lost.
For the Dependent Daycare FSA, there are four tests: Eligibility, Contributions and Benefits, More than 5% Owners Concentration, and 55% Average Benefits tests. If a DCFSA fails any of the above tests, the benefits provided to highly compensated individuals and key employees may not be excluded from income, and deferrals and reimbursements may become taxable.
Our experts provide a customized template to aid in the collection of data for testing calculations. Once received, we analyze and perform testing according to the IRS calculations. The employer is provided with a detailed report.
Effective 2016 under the Affordable Care Act, all employers with an average of 50 or more FTE employees during the previous calendar year that provides minimum essential coverage to employees must report to the IRS and provide a statement to all individuals enrolled in the plan via Forms 1094 and 1095.
We provide simplified reporting, preparation of applicable forms, e-filing to the IRS, and distribution to employees