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DOL FAQ Reiterates ACA Stance on Individual Health Policies

November 6th, 2014

Today, November 6, 2014, the DOL reiterated it’s position that individual health policies cannot be paid with pre-tax dollars. The DOL position was explained in DOL FAQs About Affordable Care Act Implementation (Part XXII).

IRS COLA Adjustments for 2015

October 31st, 2014

The IRS announced annual cost of living adjustments (COLA) for 2015. Notably, the annual cap on Health Flexible Spending Arrangements (FSA) has been increased from $2500 to $2550 for 2015 plan years.

Also, the Qualified Transportation Fringe Benefit limitations for 2015 will be $130 per month for transportation in a commuter highway vehicle and for transit passes and the monthly limitation for qualified parking in 2015 will be $250.

The 2015 COLAs are listed in IRS Revenue Procedure 2014-61.

IRS Implements Rules for Improper Debit Card Transactions

April 3rd, 2014

On March 28, 2014 the IRS released IRS Memorandum 201413006 on Health Flexible Spending Arrangement (FSA) correction procedures for improper debit card transactions.

In cases in which all other correction procedures have been exhausted by the employer and the employer treats the improper payment as business indebtedness in accordance with Prop. Treasury Reg. §1.125-6(d)(7)(v), the improper payment should be reported by the employer to the employee as wages on a Form W-2 to the extent the employer forgives the indebtedness after requesting payment consistent with collection procedures for other business indebtedness. The amount included in income is subject to withholding for income tax, FICA and FUTA, since the benefits are made available to the employee by the employer for the performance of services. The improper payment is reportable in the taxable year of the employee in which the indebtedness is forgiven.

Limited FSA Rollover Now Allowed

October 31st, 2013

The Department of Treasury issued Notice 2013-71 and an informational fact sheet today that modifies the long standing “use-it-or-lose-it” rules relating to flexible spending accounts (FSAs).  The modification allows for a limited rollover of unused FSA dollars as follows:

  • Effective in plan year 2014, employers that offer FSA programs will have the option of allowing participants to roll over up to $500 of unused funds at the end of the plan year.
  • Effective immediately, employers that offer FSA programs that do not include a grace period will have the option of allowing employees to roll over up to $500 of unused funds at the end of the current 2013 plan year.