by admin | Jul 27, 2022 | Blog
In connection with the move to all-electronic filing of Form 5300 as of July 1, 2022, the IRS has updated related forms and instructions. Form 5300 is no longer available through the IRS forms and publications database; instead, filers are directed to the pay.gov website, where a search for “5300” will lead to a page that includes an option to preview the form. Updates to the form’s instructions include details about electronic filing such as limitations on uploaded attachments and a note that Form 8717 is not needed for submissions through the website. The updated Form 8717 instructions specify that this form should no longer be used for Form 5300 (or Form 5310, for which electronic filing has been required since August 1, 2021) unless an additional payment for an insufficient user fee is needed. The IRS’s About Form 5300 page has also been updated to reflect the electronic filing requirement.
EBIA Comment: Electronic filing of Form 5300 is now mandatory for all determination letter applications, as the brief transition period during which paper submissions were still accepted has ended.
Source: Thomson Reuters
by admin | Jul 27, 2022 | Blog
Question: Our company currently offers a general-purpose health FSA. If we switched to an HDHP/HSA, could our employees receive tax-free reimbursements for the same types of expenses from their HSAs?
Answer: Yes, and they might acquire a few additional options. Like health FSAs, HSAs can provide tax-free reimbursement of out-of-pocket expenses for medical care. But HSAs also can reimburse certain expenses that health FSAs cannot. Those differences are highlighted below.
- Nonmedical Expenses: Unlike health FSAs, HSAs can make distributions at any time and for any purpose, although only distributions for qualified medical expenses are tax-free. Some taxable distributions may also be subject to a 20% excise tax.
- Insurance Premiums: While HSAs generally cannot reimburse health insurance premiums or coverage contributions on a tax-free basis, there are a few exceptions:
- Qualified long-term care insurance
- Any federally required continuation coverage (e.g., under COBRA or USERRA)
- Health plan coverage while the HSA account holder is receiving unemployment compensation under state or federal law
- For HSA holders who are age 65 or older, any health insurance other than a Medicare supplemental policy
- Qualified Long-Term Care: Unlike health FSAs, HSAs can reimburse qualified long-term care services on a tax-free basis.
In addition, HSAs cannot limit the types of expenses that are reimbursable on either a taxable or tax-free basis because they are individual trusts to which account holders must have unrestricted access, subject only to reasonable restrictions on the frequency or minimum amounts of distributions. HSAs are also different in terms of whose expenses they can reimburse tax-free. Health FSAs can provide tax-free reimbursements for the expenses of employees’ children who are under age 27 at the end of the taxable year, regardless of their status as tax dependents. However, HSAs can only provide tax-free payment or reimbursement of the expenses of an HSA account holder’s child if the child qualifies as a dependent. Keep in mind that other requirements (e.g., regarding substantiation of expenses) will also apply and may vary from arrangement to arrangement.
Source: Thomson Reuters
by admin | Jul 25, 2022 | Blog
A limited-purpose FSA (LPFSA) is a Health Savings Account (HSA) eligible FSA plan that allows you to set aside pre-tax dollars for dental, vision, and orthodontia expenses for you and your dependents, even if they are not covered under your primary health plan. The Limited Purpose FSA covers these eligible expenses, tax-free while your HSA covers eligible medical expenses. It’s a great way to save on HSA dollars – especially if you choose to use your account to invest.
There is an abundance of benefits by enrolling in a LPFSA, notably:
- At the outset of the plan year, your LPFSA is pre-funded, and your full contribution amount is immediately available for use.
- In addition to your HSA contributions, you are able to set aside additional LPFSA tax-free contributions, up to $2,850 in 2022.
- Preserve HSA funds for other purposes, like investing or saving for retirement.
- Money contributed to a limited-purpose FSA is tax-free when it’s spent on eligible dental, vision, and orthodontia expenses, including dental exams, x-rays, vison exams, and much more.
by admin | Jul 19, 2022 | Blog
Last month’s U.S. Supreme Court ruling, which overturned the constitutional right to abortion (Roe v. Wade), has left thousands of women across the country unsure of where to find appropriate care and abortion expenses.
Below is an overview of the recent changes to employee benefits in lieu of the ruling. For a full explanation, please read our latest handout.
Medical care expenses for individuals plus increased mileage rate
For individuals who seek medical treatment in a city or a location hundreds of miles away, there are expenses they can use for transportation, meals, and lodging. All expenses obtained for this service, though, must be primarily for and essential to medical care.
It’s important to note the mileage rate for traveling to obtain medical care also. At the start of every year, the IRS announces the standard mileage rate for this type of service. The standard rate was 18 cents per mile from January 1, 2022, through June 30, 2022. However, due to increased gas prices, the rate rose to 22 cents per mile from now until the duration of the calendar year.
What qualifies as expenses involving transportation to and from medical treatment sites?
Individuals may only benefit from transportation costs obtained to and from medical treatment sites when it’s via taxis, buses, trains, airplanes, rental cars, and rideshare services (such as Uber or Lyft). In addition, transportation to a medical treatment site only qualifies if it’s to treat a specific ailment or disease.
Qualifications for meal and lodging expenses
The only way meal expenses count as expenses for medical care is if they are provided at a hospital or a similar institution where an individual is receiving care. Therefore, meal expenses away from home while an individual seeks treatment is not eligible.
Lodging expenses can be reimbursable as well, however it must meet 1 of these 3 requirements.
- If incurred primarily for and essential to medical care
- If the medical care is provided by a physician in a licensed hospital (or in a medical care facility related to one)
- If there is no significant element of personal pleasure, recreation, or vacation
Lodging expenses can be reimbursed at a maximum amount of $50 per day per individual.
Travel costs associated with abortion care
With the need to travel for abortion services on the rise, many companies have installed abortion travel benefits to their benefit package to help with travel costs. The expenses for abortion travel benefits cover ground transportation (bus, taxi, train), airfare and lodging (individual or two people).
by admin | Jul 18, 2022 | Blog
In the event of employment termination for an account holder, there are several notable procedures and regulations that occur:
- Any participation in a Flexible Spending Account (FSA) – Health Care FSA, Limited Purpose FSA, Dependent Care FSA, Adoption Assistance, or Commuter Account – will end along with the ability to incur additional expenses for reimbursement.
- All future salary reductions will end.
- If you have a NueSynergy FSA benefit card, the card will be deactivated on date of termination.
- You will have 30 days from your date of termination to submit manual claims to NueSynergy by mail, online, fax, or mobile application.
- Manual claims submitted during a 30-day window must have dates of service prior to date of termination.
