Tri-Star Benefits Briefing
November 2014
IRS Releases Annual Inflation Adjustments for 2015
On October 30, 2014, the IRS released the annual inflation adjustments for 2015. Revenue Procedure 2014-61 provides the details about these annual adjustments. The following are the most important changes:
  • Health Flexible Savings Arrangements (FSA) Sallary Reduction Limit: $2,550
  • Adoption Assistance: $13,400
  • Transportation:
    • Parking $250
    • Transit $130

You can read the press release and the IRS Revenue Procedure 2014-61 here.

IRS Notice 2014-55
On September 18, 2014, the IRS issued Notice 2014-55 which expands the permitted election rules for health coverage under Section 125 cafeteria plans. It addresses two situations in which a Section 125 cafeteria plan participant is permitted to revoke his/her election during a period of coverage.

  • The first situation involves a participating employee whose hours of service are reduced so that the employee is expected to average less than 30 hours of service per week, but for whom the reduction does notaffect the eligibility for coverage under the employer’s group health plan
  • The second situation involves an employee participating in an employer’s group health plan who would like to cease coverage under the group health plan and purchase coverage through a competitive marketplace established by ACA, commonly referred to an Exchange or Marketplace.
The guidance in this notice is effective on September 18, 2014. To allow the new permitted election changes under this notice, a cafeteria plan must be amended to provide for such election changes. The amendment must be adopted on or before the last day of the plan year in which the elections are allowed, and may be effective retroactively to the first day of that plan year, provided that the cafeteria plan operates in accordance with the guidance under this notice and the employer informs participants of the amendment, and provided further that a cafeteria plan may be amended to adopt the new permitted election changes for a plan year that begins in 2014 at any time on or before the last day of the plan year that begins in 2015.

HSA Growth: Investments & Contributions

The clear trend among employers has been to begin offering employees a health savings account (HSA) with a high deductible health plan. But why is this the case? While many companies have had this as one of several health plan options over the years, a few of the Affordable Care Act’s (ACA) provisions are making some companies consider offering only this type of plan.

According to a 2013 National Business Group on Health survey, 72% of large employers already offer at least one consumer-directed health plan with 33% of them stating they are the most effective at cost-control. It’s provisions under the ACA that require employers to fund a minimum level of coverage and the future “Cadillac tax” on high costing health plans that make HSAs so appealing.

Tri-Star partners with UMB Bank to adminster HSA's. Contact us if you are interested in adding this service.

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