The following is a brief list of year-end items and adjustments that you should be aware of as we close 2013 and head into to 2014:
The monthly transit limit will drop to $130 for 2014.
The monthly parking limit increases to $250 for 2014.
The Health FSA salary reduction limit remains at $2500 for 2014.
A panoply of “health insurance reforms” go into effect for group health plans beginning with the first plan year on or after January 1, 2014. These changes include a prohibition on pre-existing condition exclusions, a limitation of 90 days on waiting periods, and others. These changes do not apply to stand-alone retiree plans or excepted benefits (e.g., most health FSAs and vision, dental, specified disease and hospital indemnity plans that meet certain requirements).
While “pay or play” has been delayed until 2015, employers intending to use the “safe harbor” method of compliance (e.g., “measurement” and “stability” periods) should be tracking hours at this time.
“Mini-med” (including HRA) waivers previously received for health plans with annual dollar limits that don’t comply with the prohibition on annual caps under Section 2711 expire the end of the plan year beginning in 2013 (for calendar year plans, they expire December 31, 2013).
As outlined in the related article on IRS Notice 2013-54, standalone HRAs and premium reimbursement arrangements will be subject to a penalty under Section 2711 for plan years starting on or after January 1, 2014 (and in some cases plan years starting on/after September 13, 2013) where the plan is not eligible for other transition relief. HRAs will not violate 2711 if they are “integrated” as defined in Notice 2013-54.
The annual enrollment period for the government sponsored Marketplace started October 1. Enrollment must occur by December 23 if you want coverage January 1, 2014. However, there is no individual mandate penalty as long as you are enrolled by March 31, 2014 (which some suggest means you must begin enrollment by mid-February to be enrolled by end of March).
The average annual wages requirement for qualifying for the Code Section 45R small employer tax credit is $50,800 for 2014 (for those small employers that enroll in SHOP coverage and qualify).
The amount of qualifying adoption expenses that may be reimbursed is $13,190 for 2014. The exclusion phases out if you have modified adjusted gross income in excess of $197,880 and is completely phased out if you have MAGI in excess of $237,880.
Health FSAs with a grace period must be amended to remove the grace period before the end of the 2013 plan year in order to allow a carryover of unused funds from the 2013 plan year. If there is no grace period, or once the grace period is removed, action to amend the plan to add the carry over for the 2013 plan year is not required until the end of the 2014 plan year.
Don’t forget that the cost of “applicable employer sponsored health coverage” provided during 2013 must be included on the W-2 that is sent out on or before January 31, 2014.
The key employee officer compensation limit for 2014 will increase to $170,000.
The Code Section 414(q) HCE compensation threshold in 2014 will remain at $115,000. Don’t forget that when you test for 2014, you use the compensation threshold in effect in 2013, which is also $115,000.
Information provided courtesy of the Employers Council on Flexible Compensation (ECFC), of which Glynn Griffing & Associates, Administrators is a proud member.