Cafeteria Plans Need Updating

Employers are running out of time to amend and update the old, outdated Section 125 Cafeteria Plans before the end of the year, reports Core Documents, Inc., the nation's primary source for Section 125 Cafeteria, HSA and HRA plan documents. This includes: Section 125 Premium Only Plans, Health Flexible Spending Accounts and Dependent Care Assistance FSA plans.

Employers risk making mistakes by not using the many updates in the tax code, revenue rulings and the laws affecting the administration of the tax-free benefit plans.

Although many employees now have more information that effect their benefits, Core Documents reports receiving an increase in calls from unhappy employees requiring clarification on coverage issues of their company's Section 125 Cafeteria plan document or the Summary Plan Description (SPD). Many issues relate to tax codes changes of which the employer is unaware.

Employers are required by the Internal Revenue Service (IRS) to maintain a written plan document. The Department of Labor (DoL) requires that every employee receive the Summary Plan Description, which is written in an easy to understand form, containing all information needed to file an employee complaint with the Labor Department if the plan is improperly administered.

The Labor Department requires that an employee receive a copy every time the Section 125 SPD is changed, or at least once every five years. Employers need to review when the last updates occurred and if the SPD copies have been given to each employee.

Gene Ennis, CFC, President of Core Documents Inc., says that employers can completely replace the old and outdated plan documents and Summary Plan Descriptions for $99, plus a $15 shipping and handling fee, for each of the three modules. A Section 125 Cafeteria Plan consists of three components: the Premium Only Plan module ($99) which allows employees to pretax their portion of insurance premium, the Health FSA module ($99) which reimburse out of pocket medical expenses, and the Dependent Care Assistance FSA module ($99) which can reimburse up to $5,000 annually for daycare expenses. The company offers a $48 discount if all three modules are combined together, for a total of $249, plus the $15 shipping and handling fee. More information is available at http://www.CoreDocuments.com or 888-755-3373.

You may like these other stories...

IRS audits less than 1 percent of big partnershipsAccording to an April 17 report from the Government Accountability Office (GAO), the IRS audits fewer than 1 percent of large business partnerships, Stephen Ohlemacher of the...
Legislation coming out of Washington just might reduce homeowners' burden for disaster insurance. It's a topic very much on everyone's minds since the mudslide in Oso, Washington. The loss of human life was...
Divorce is hard, and the IRS isn't going to make it any easier. The IRS generally says "no" to tax deductions that might ease the pain of divorce. In certain circumstances, however, you might be able to salvage...

Upcoming CPE Webinars

Apr 22
Is everyone at your organization meeting your client service expectations? Let client service expert, Kristen Rampe, CPA help you establish a reputation of top-tier service in every facet of your firm during this one hour webinar.
Apr 24
In this session Excel expert David Ringstrom, CPA introduces you to a powerful but underutilized macro feature in Excel.
Apr 25
This material focuses on the principles of accounting for non-profit organizations' revenues. It will include discussions of revenue recognition for cash and non-cash contributions as well as other revenues commonly received by non-profit organizations.
Apr 30
During the second session of a four-part series on Individual Leadership, the focus will be on time management- a critical success factor for effective leadership. Each person has 24 hours of time to spend each day; the key is making wise investments and knowing what investments yield the greatest return.