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Calendar Plan Year Reminders - Don't Forget!!

Updated: May 9, 2023

As 2019 draws to a close, we wanted to provide employers and consultants a list of some of the most frequently forgotten compliance obligations during the fourth quarter. Many of these requirements don’t necessarily coincide with specific calendar dates, but since the majority of plans renew as of January 1st, there are several requirements that tend to get overlooked at this time of year.

First of all, employers must notify several unique groups of their right to change coverage elections during open enrollment, just as active employees:

  • Individuals enrolled under COBRA,

  • Those on state continuation, including spouses or dependent children, and

  • Employees out on FMLA or other approved leave, either paid or unpaid.

Second, employers must ensure that no one who is enrolled in a general-purpose health FSA also opens and contributes to an HSA. As a reminder, a health FSA, including a spouse’s FSA, is considered disqualifying coverage that makes an individual ineligible for an HSA.

Third, distribute required notices and the Summary of Material Modifications (SMM) if any changes are made to the plan document/SPD. See our previous blog for more information on the specific notices that must be distributed during open enrollment

Fourth, if an employer requests proof of dependent status, either a signed employee attestation or documentation (e.g., marriage license, birth certificate, tax return, etc.) should be required for everyone on the same terms. In other words, the types of documentation requested should not vary from employee to employee.

Fifth, as of the first day of the plan year, employers need to determine whether they need to file Form 5500 for the current plan year. To do so, they’ll need to count the exact number of plan participants enrolled, not including dependents, on the first day of the plan year. Plans with under 100 participants are exempt from filing Form 5500 if unfunded, fully-insured or both.

Finally, (though this list is NOT exhaustive), employers must confirm if they are an applicable large employer, and therefore subject to the employer mandate for the current year by calculating the number of employees during the calendar year that just ended. Employers with 50 or more full-time employees plus FT equivalents must offer coverage to full-time employees and also file ACA reporting with the IRS. For reference, the IRS website provides resources to assist with ALE calculation.

Wrapping up the year is never easy – and this list isn’t meant to include everything an employer or broker needs to consider during this time of year. However, we’ve seen that these are the most commonly missed compliance requirements during Q4. Keep these in mind along with the other tasks you’re managing to make sure you end the year on a positive note. 

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