Benefits: Year-End Best Practices and Requirements

As the end of 2018 approaches and we begin anticipating the upcoming holidays, employers also need to keep in mind the benefits plan activities that need to be accomplished at the year’s end. In addition to conducting benefits open enrollment, if you have a calendar year plan, here are other compliance items to consider before 2018 is over.

Health and Welfare Plans

  • Distribute Annual Notices, such as Women’s Health and Cancer Rights Act (WHCRA), Premium Assistance Under Medicaid, and Children’s Health Insurance Program (CHIP) notices;
  • Distribute the Summary of Benefits and Coverage for your plans;
  • The Marketplace Notices have been updated and must also be provided to new hires. See the Department of Labor website for samples. Be aware that there are different notices for organizations that offer benefits and for those who do not;
  • Plan on providing 1095-C forms to employees by January 31, 2019, and to the IRS by February 28, 2019 (for paper filers) or April 1, 2019 (electronic filers). 1094-Cs should accompany the 1095-Cs filed with the IRS by the dates listed immediately above;
  • Create and execute Plan Amendments for any plan changes you made during the year. Also, check that your health plan document matches the Patient Protection and Affordable Care Act (PPACA) requirements. Also ensure that these amendments reflect how you currently operate the plan. If all these notices aren’t consistent, determine how to align them, making any amendments needed. Be sure to update and distribute your Summary Plan Description with any plan changes too;
  • Update the HR and Payroll system(s) with 2019 contribution amounts and plan limits; and
  • Remind employees to update their beneficiaries listings if they’ve had applicable life changes.

Regarding wellness plans, in late 2017, the case of AARP v. EEOC (2017) vacated the incentive plan limits established by the EEOC for employer wellness plans, effective January 1, 2019.  These rules affect wellness plans that require a physical exam, health risk assessment, or biometric screening. The EEOC was directed to redraft the rules, but has issued no further direction or guidance to date.

Retirement Plans

  • Provide the Summary Annual Report to participants (if 5500 extension was used);
  • Distribute notices for Safe Harbor, Qualified Default Investment Alternatives, or Automatic Contribution Arrangements, as applicable to your plan;
  • Distribute Participant Fee Disclosure;
  • Return excess deferral amounts to highly compensated employees;
  • Distribute required minimum distributions from the plan, if applicable;
  • Plan for or begin the nondiscrimination testing process. Work with your TPA or record-keeper on appropriate testing activities for your plan;
  • Create and execute Plan Amendments for any changes you made during the year. Update your Summary Plan Description and distribute if changes were made; and
  • Update the HR and Payroll system(s) with the new plan limits for 2019.

This list is not all-inclusive and you should expect that required or “best practices” activities will vary depending on your specific plan. Employers Council maintains an ERISA and Benefits Consulting group, as well as benefits consultants, that may assist you wish any questions you have about your plans, conduct plan reviews, or provide guidance on other “best practices.”