The Top 4 To-Dos on an Employer’s New Plan Year Checklist
The new plan year is well under way for many employer offered benefits. This is a good time for employers to review their plans and ensure important details were not missed during the busy open-enrollment time period.
Payroll Deductions – after the first payroll deduction of the new plan year, employers should validate payroll deductions were set up correctly based on the benefits elected by employees during open enrollment. This should include all benefits, not just health insurance premiums. Any changes should be communicated to your third party administrator (TPA) as needed.
Plan Documents – double check all plan documents are updated and signed as needed based on plan design or regulation changes. Plan documents should be signed before the effective date of the plan. Make sure the Summary Plan Description (SPD) is distributed to any new participants within 90 days of the start of the plan year.
Nondiscrimination Testing – once the new plan year begins, be sure to complete nondiscrimination testing for the plan. This will help identify any potential red flags and make sure enough non-highly compensated employees are participating in the plan.
Finalizing the Prior Plan Year – Even though the new plan year has started, there may still be some items to complete for the prior plan year. Plan forfeitures and debit card claims requiring documentation may still need to be addressed as part of closing out the plan.
While many employers are settling into the new plan year and are perhaps already thinking ahead to next year, taking the time now to perform a few audits can save time at the end of the year when open enrollment is in full swing.
BusinessPlans, Inc. – myCafeteriaPlan does not intend to provide legal or tax advice and information contained in this article should not be interpreted as such. Regulations governing pretax plans are often open to interpretation and should be reviewed with your legal or tax advisor before making any decisions regarding your plan.