Understanding and Completing the Form 5500

Form 5500, Annual Return/Report of Employee Benefit Plan, is the form used to file an employee benefit plan’s annual information return with the Department of Labor (DOL).  

Being prepared to electronically sign the Form 5500 will ease stress and help avoid costly penalties that can be incurred if not filed in a timely manner. Here are a few tips to ease the pain of filing yet another form with the regulatory agencies.

Who has to file? 

The sponsor of the plan or arrangement subject to the Employee Retirement Income Security Act (ERISA) must file the Form 5500. Plans subject to ERISA can include, but are not limited to, the following:

• Profit sharing plans, 401(k) plans, money purchase plans, stock bonus plans
• Certain annuity arrangements
• Individual retirement arrangements established by employers
• Church pension plans that elect to be covered by ERISA
• Certain welfare benefit plans

When is the deadline?

The Form 5500 must be filed no later than the last day of the seventh month after the Plan Year End. For calendar year plans, this means July 31 (or the next business day if it falls on a weekend). However, a Form 5558 can be filed for an automatic 2 ½ month extension (for a calendar year plan, this deadline is October 15^th). 

Who signs?

All plan sponsors and plan administrators who sign the Form 5500 must have his or her DOL credentials. As long as the signer remains the same, the User ID and PIN received from the DOL will remain the same. If there is a new signer, the DOL credentials can be obtained by going to www.efast.dol.gov, and click “Register” on the Welcome screen. Ensuring that the correct credentials are in place will begin the signing process with ease.

How is the Form 5500 filed?

All Form 5500 Annual Returns/Reports of Employee Benefit Plan and all Form 5500-Short Form Annual Returns/Reports of Small Employee Benefit Plan and any required schedules and attachments, must be completed and filed electronically. It’s important to understand how to login to electronically sign the forms. There are hundreds, if not thousands, of signers trying to get on the website to meet the deadline so waiting until the last week is not advised. Avoid undue stress and sign as soon as possible. 

If you have questions about signing, contact your Account Manager with Alliance Benefit Group at 1-800-898-9344 and they will be happy to assist you!

The Author: Lisa Bjelland

Audit Analyst

abgncs.com/retirementadministration

LBjelland@abg-mn.com

Disclaimer: This blog is of an informative nature and should not be taken as advice. Please work with the appropriate parties for those services.

How to Ease the Burden of Multi-State Withholding.

Many employers have multi-state withholding and unemployment taxes. As workplace dynamics continue to develop and change, more employers will be faced with managing withholding for several states. Here are a few tips from our payroll team to help you navigate the addition of multiple states. 

There are several items to consider when thinking about whether you may need to add another state. The most common reasons include:

·         Base of operations

·         Employees working from home

·         Employees who are residents of a neighboring state

Adding States Can be a Challenge

Adding a new state requires research into the laws governing state withholding and unemployment, as well as additional taxes such as local, county, and school district. This can be difficult and time consuming. There is no one size fits all for adding new states. The laws can vary a great deal.

Employers must apply for tax accounts in order to be assigned an account number, deposit schedule, unemployment rate. These accounts should be set up prior to the first withholding and/or accrual of any taxes.

We're Here to Help

As part of our commitment to take the worry away, we are here to do the research and assist you by getting the right information. 

Employers should communicate with their payroll account manager to make sure that set up is accurate and timely for both the taxation and affected employees.  This communication allows your account manager to carefully review the changes to assure accuracy. It also reduces the chance for errors on quarterly reports.

Any Other Questions? 

I am also available to answer any questions that you may have regarding payroll taxation items. I won’t always have the answer, but I am always willing to find it for you. I appreciate the opportunity to serve you.

The Author: Kathy Krebsbach, FPC

Payroll Tax Compliance Specialist

abgncs.com/payroll

KKrebsbach@abg-mn.com

Disclaimer: This blog is of an informative nature and should not be taken as advice. Please work with the appropriate parties for those services.

2014 Year End Processing Deadlines for Retirement Plans

As 2014 comes to a close, our retirement plan administration department would like to thank you for your continued partnership and remind you of the important deadlines for processing your payroll contributions and distributions.

Here are a few important dates to keep in mind to ensure your last payroll files of 2014 are processed in time to reflect on the December 31, 2014 valuation. Please have electronic information to us by December 26, 2014. The dollars for these contributions must be received at the investment company prior to December 30, 2014. If we ACH the money for your account, we need to receive your file by Noon Central Time (CDT) on December 26, 2014.

Submitting Your Final Payroll
When submitting your final payroll file of 2014, please take note of the pay period end date. It’s very possible it could reflect a January 2015 date, as not all pay schedules will end on 12/31/2014. If you notice a 2015 end date but would like your contributions processed in 2014, please feel free to contact us prior to submitting the file and we will be more than happy to modify that date to ensure your file is processed in the correct plan year.

Bonuses
Bonus payroll files are just as important and require the same amount of attention as a regular payroll. Please contact us so we can open additional pay schedules and assist you in getting these files uploaded and processed in a timely manner.

Happy New Year
As the year ends, we think about all we are grateful for. Our relationship with you is one thing we treasure. Thank you for the opportunity to serve you. We wish you a happy holiday season and much success in the New Year.

The Authors: Corrine Mattson and Amy Newman

abgncs.com/RetirementAdministration

cmattson@abg-mn.com

anewman@abg-mn.com

Disclaimer: This blog is of an informative nature and should not be taken as advice. Please work with the appropriate parties for those services.

The Answers to Those Tricky HSA Eligibility Questions

If you’re like most HR or employee benefits professionals, you’ve probably been answering a lot of questions lately.  Questions about plans, coverage, cost… the list goes on.  Here at ABG we’ve also been answering our fair share of questions. 

I’ve noticed questions about health savings account (HSA) eligibility come in again and again.  I thought it would be worthwhile to share the answers to a few common questions with you.  Hopefully this saves you some time and energy.

Q:  I know an employee can’t contribute to an HSA if they’re covered by Medicare, but what if an employee’s spouse is covered by Medicare?  Can the employee still contribute to an HSA?

A:  Yes, as long as the HSA owner is not covered by Medicare, they can still fund a HSA.  Additionally, if the spouse is also covered by the employer’s high deductible health plan, the employee can contribute up to the family HSA maximum.  The employee can also continue to use their HSA funds to pay the spouse’s out-of-pocket health care costs, regardless of the spouse’s coverage.

Q:  If our company does not offer a group health plan, can we still allow employees to fund HSAs through pre-tax payroll deductions?  What about making employer contributions to employees’ HSAs?

A:  Yes, an employer who does not sponsor a group health plan may still allow employees to fund HSAs and they may also make employer contributions to their employees’ HSAs.  Here are a few considerations:

-          The employer must have a Section 125 plan document in place in order to allow employees to fund HSAs with pre-tax payroll deductions.  This is the case regardless of whether the employer offers a group health plan.

-          If there is no Section 125 plan in place, employer HSA contributions are subject to comparability rules, meaning similarly situated employees must receive the same contribution.

-          If there is a Section 125 plan in place, the comparability rules do not apply.  Instead, employer HSA contributions are included in the applicable Section 125 nondiscrimination tests.

Q:  If an employer does offer an HSA-qualified group health plan, but an employee opts to take coverage elsewhere, such as with their spouse or on an individual policy, can the employer allow that employee to fund an HSA?

A:  This is the employer’s choice.  There is nothing in the regulations that would prohibit the employer from allowing this employee to fund an HSA.  As long as the employee meets the eligibility requirements under the employer’s Section 125 plan, they can fund the HSA with pre-tax payroll deductions.  Remember, the employer saves FICA tax on all funds employees contribute to HSAs via pre-tax payroll deductions.

Q:  What responsibility does an employer have to ensure an employee’s HSA eligibility before allowing them to contribute to an HSA, or funding an HSA on their behalf?

A:  The employer’s responsibility to ensure employees’ HSA eligibility is very limited.  The employer would be responsible for ensuring any health coverage sponsored by them (the employer) is HSA-compatible.  Beyond that, the responsibility to ensure HSA eligibility is almost entirely on the employee.  Employers may rely on an employee’s representation as to HSA eligibility.  Employer’s allowing pre-tax HSA contributions must have “reasonable belief” an employee’s HSA contributions are excludable from income.  It may be prudent to ask employees covered by outside health plans to make some sort of declaration as to their HSA eligibility, but it is not required.

Hopefully, these answers will rescue you from your next head-scratcher. If you have other questions, don’t hesitate to reach out to your friendly neighborhood HSA experts. 

The Author: Sadie Wuerflein, CFC
Compliance Specialist – FSA/HRA/HSA
abgncs.com
swuerflein@abg-mn.com

Disclaimer: This blog is of an informative nature and should not be taken as advice. Please work with the appropriate parties for those services.

Year End is Quickly Approaching. Here are Some Tips for Retirement Plan Sponsors.

What Does “Year End” Mean to Me as a Plan Sponsor of a Retirement Plan?
For full-service retirement plans, each year as your plan year comes to a close Alliance Benefit Group North Central States, Inc. (ABG) will send you a packet of information called the Year End Packet. This packet includes information detailing what the year end cut-offs are for processing contributions and distributions, vesting updates (if applicable), and notices to be delivered to Participants, including the deadlines to do so. Also included are: 

•          Updated annual Plan limits
•          Important IRS and DOL dates
•          The Data Request

Let’s break down each of these topics to help you understand your responsibilities as the Plan Sponsor, as well as utilize the tools provided.

Processing Cut-Offs
In order for ABG to have all of the year’s information included on the 12/31 statements, we must receive it in time for it to be processed start to finish. This means that if we provided automated clearing house (ACH) for your payroll file, we need to have the payroll file uploaded to us by Noon Central Daylight Time (CDT) of the date noted in the Year End Packet. This allows time for us to receive the confirmation of deposit for the ACH from the custodian and make sure the file is traded before the close of the calendar year.

If you send your own deposits, you have a couple of extra days, but the deposit must be received at the custodian by no later than the second to the last business day of the year. This only pertains to statements -- you can still submit information after the New Year and it will be included in the prior year’s testing.

Distributions need a little extra time due to the processing on our end and your Custodian’s check issuance policies. The distribution cut-off will also be noted in your Year End Packet.

Vesting
Vesting is only applicable if your plan has an “hours of service” requirement for vesting and you do not submit hours each pay period. ABG can still update the hours after the calendar year end but the correct vesting will not be reflected on the 12/31 statements.

Notices to Participants
This category includes notices such as the Participant Fee Disclosure (404(a)(5)), the Qualified Default Investment Alternative (QDIA) notice, Safe Harbor notice, or other communications of that nature. Each of these disclosures needs to be distributed to participants no later than 30 days prior to the beginning of the following plan year. ABG does make note of the deadline for each notice throughout the Year End Packet to ensure that you have that information handy. 

Can ABG mail these to Participants for me?  ABG has recently partnered with a third-party called Media Scope who can mail the notices for you. If you are interested in this service, please reach out to your Administration Team for more information. If your Plan opts to utilize this service, ABG will have you sign an agreement with Media Scope, ask you to “scrub” the Census Notice Report for any erroneous information, and then ABG will provide the scrubbed report and the applicable notices for your Plan to Media Scope. That’s it, you’re done! 

If you do not use the service, you can still use the Census Notice Report from the plan sponsor web to determine who needs to receive the notices. The report can even be exported into an Excel spreadsheet that you could then mail merge to make mailing labels.

Speaking of that, who DOES need to receive the notice(s)?  Obviously any active Participant needs to receive the notice(s) but also anyone who is terminated with money still in the Plan as well as anyone who has met eligibility but hasn’t deferred yet. You also need to provide the notice(s) to any beneficiaries of deceased participants -- basically anyone who has a plan status of Active or Inactive when looking at the Plan Status column under EE Search on the Plans Sponsor web.

Updated Plan Limits
Each year (usually mid-November), the IRS determines what the “plan limits” are for the following year. This includes compensation limits, total plan contribution limits, deferral limits, catch-up contribution limits, taxable wage base, and compensation limits in relation to definitions of an HCE (Highly Compensated Employee) or a Key Employee. ABG will include a chart of all of these limits in your Year End Packet that shows the following year as well as the previous four to five years’ limits.

Important IRS & DOL Dates
ABG also provides a page indicating important dates for the IRS and DOL deadlines, such as the Form 5500 deadline or when excess deferrals due to an ADP failure need to be returned by. Most of these deadlines are relative to the Plan year end date, so they won’t be the same for a plan with a 12/31 year end date as is for a 5/31 year end date, but there are a few that are the same for everyone regardless of plan year end.

Data Request
The data request part of the packet provides information for the Audit Team to prepare the Form 5500 (if applicable) and provides your Administration Team the necessary information to complete the Plan’s compliance testing. It is very important that the Data Request be completed in its entirety and to the best of your ability. Please do not hesitate to reach out to your Administration Team if you have any questions while completing this. It’s much better to get those questions answered right away.

We hope this information is helpful. As always, if you have questions on any of this information, please reach out to your Administration Team at 1-800-898-9344. We’re always happy to help!!

The Author: Michele Etherington, QKA

Senior Account Manager – Retirement

abgncs.com

metherington@abg-mn.com

Disclaimer: This blog is of an informative nature and should not be taken as advice. Please work with the appropriate parties for those services.

Proud to Be Part of This (National Award Winning) Team

Sometimes you have to stop and smell the popcorn popping in the break room on Thursdays. 

It's been about a week since it was announced that Alliance Benefit Group Companies of Minnesota and Kansas (ABGNCS, ABGFS) were awarded the Best-In-Retirement Business IMPACT Award™ from Charles Schwab & Co. Inc. ("Schwab") and it's a proud moment for our entire organization. This has been a fun couple of weeks, Schwab even visited our office and made a video that made us look like we could be the subject of a TV show. Catch it by following this link or tune into TNT on Wednesday nights at 8/7 Central. 

Coming to ABG last year from the advertising industry in Minneapolis, I have seen my fair share of excitement and sorrow over industry awards (mostly sorrow and passive aggressive finger pointing). The excitement surrounding this though is even more special. Perhaps, because our headquarters isn't in a trendy warehouse district or a glassy sky scraper, it's in Albert Lea, Minnesota. A town often referred to as "Mayberry" which happens to be placed at the nexus of the universe, otherwise known and the crossroads of I35 and I90. Possibly, because our people are so humble they pass the credit around like a holiday fruitcake. It's also been fun to embrace the collaboration between our advisor, consulting and recordkeeping divisions. But, the biggest reason I'm so impressed is because if I wasn't here every day to see the impact our 100+ person team has across the national retirement (and health & wellness and payroll and COBRA) community, I would have a hard time believing it. This award helps reinforce that notion. It truly is a great team across the board. For that I wanted to take this week's blog post to thank the team I get to work with every day. 

Good work all. Here's to being recognized and here's to further success in the years to come. Now it's time to get back to work so we can put more hardware in the trophy case, and more importantly help our clients succeed. 

The Author: Cole Thompson 

Marketing Specialist 

abgncs.com

cthompson@abg-mn.com

What is the HSA/FSA Benny Card, and How Can I Use It?

If you have a Health Savings Account (HSA) or a Flexible Spending Account (FSA) with Alliance Benefit Group North Central States, Inc., you likely have a red Benny Card. Some of you may know exactly what to do with this card, but more than likely, most of you have questions on just what this card is for, and how you can use it. I’m here to answer some frequently asked questions to clear up any mysteries for you.

What is the Benny Card?

The Benny Card is a debit card of sorts that goes along with your HSA/FSA account.  Funds that you have in your account can be accessed by using this card, just like a bank debit card. You can only use the card for the amount available in your account.

What can I use the Benny Card for?

As much as we may like to spend our money on the golf outing of the year, or a fabulous new outfit, that’s not the way this card works. You can only use the Benny Card for any eligible medical/dental/vision expenses, such as bills for doctor visits, braces, eyeglasses, and prescriptions. The card will not work for over-the-counter medicines, nor can you use it at an ATM to get cash. If you try to swipe your card for non-eligible expenses, it will be declined.

Where can I use the Benny Card?

You can use your Benny Card at most pharmacies, clinics, dental offices, and vision centers, and if you have a Benny Card attached to your Dependent Care account, a small number of large daycares. If the Point of Sale or POS at which you are swiping your card is a pharmacy, discount store or grocery store, then that POS must be set up with the Inventory Information Approval System, or IIAS. This is a system that helps determine what is HSA or FSA eligible, and helps you as the consumer to only spend your money on qualified expenses, and can save you money and hassle in the long run. 

I hope this information helps clear up some of your questions. If you have questions regarding what is an eligible expense, please click here. Otherwise, if I’ve missed something, we’d love to help. Please feel free to contact us anytime at abgaccess@abg-mn.com, or call us at 1-877-661-4727.

 The Author: Evie Cunningham

HSA Administrative Specialist

abgncs.com/hsafsahra

Disclaimer: This blog is of an informative nature and should not be taken as advice. Please work with the appropriate parties for those services.