Welfare Benefit Plan ERISA News
June 2012

Is a Simple Cafeteria Plan Right for You?
This new type of cafeteria plan has been available since January 1, 2011. It allows eligible employers (generally those with 100 or fewer employees) to avoid three of nine burdensome nondiscrimination tests for cafeteria plans, health FSAs, and dependent care FSAs: the eligibility test, the contribution and benefits test, and the key employee concentration test. Additionally, certain of the nondiscrimination tests for the component benefit plans within the cafeteria plan are treated as satisfied.
A Simple Cafeteria Plan may be especially helpful for employers that have had difficulty passing testing and were forced to exclude "key employees" or "highly compensated employees," limit their benefits, and/or limit their pre-tax contributions. It may even allow employers to provide otherwise discriminatory benefits to top employees. However, Simple Cafeteria Plans require employers to make minimum contributions to non-highly compensated or non-key employees. See IRC §125 (j), IRS Publication 15-B, or this article for additional information.
ACA Creates Turbulence for Account-Based Plans
Employers continue to embrace consumer oriented account-based plans (e.g., FSAs, HRAs, and HSAs) to reign in health care costs. A number of issues must be addressed to remain in compliance as deadlines for mandates approach. (See 4th page of this article.)
Online Wrap SPDs Now Available
ERISA Pros Wrap-TightsmWrap-Tightsm is a convenient and economical web-based ERISA suite of documents for Welfare Benefit Plans. Create state of the art, custom made wrap Plan Documents and SPDs at a fraction of the cost. It's easy-to-use and provides online help as you input information.
ERISA laws often change and employers change carriers and coverage from time to time. With Wrap-Tightsm, you can simply update your information and download current and compliant documents quickly and easily.
Our Electronic Distribution Package allows you to save time and money by distributing SPDs electronically instead of on paper to each participant. It satisfies the DOL's rigorous electronic disclosure requirements and helps you document delivery of them to participants. Contact us for a free demonstration.
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© 2017 ERISAPros, LLC, All rights reserved. Information on ERISAPros' website, its newsletter, “News & Views,” and its blog, “ERISA Wonk,” is published as a general informational source. Information and articles are general in nature and are not intended to constitute legal or tax advice in any particular matter. Blog posts and comments reflect the personal views of their respective authors - not those of ERISAPros. Transmission of this information does not create an attorney-client relationship. ERISAPros, LLC is not a law firm and is not giving legal or tax advice. It does not warrant and is not responsible for errors or omissions in the content on its website or in its newsletters. ERISA is a complicated and confusing law. Summary Plan Descriptions (SPDs), Wrap Plan Documents, and Form 5500s require review and updating by qualified ERISA compliance professionals.


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