COBRA, FSA, & HRA ADMINISTRATION

Pre-tax premiums POP Plan
Allows the employee to have medical, dental, vision, and certain other benefits deducted from their pay check on a before tax basis.  This saves the employee Federal income Tax and the FICA tax on the amounts deducted.  The Employer also saves on the matching FICA tax of 7.65%.  This is an ERISA Plan and requires plan documentation.

Flexible Spending Accounts
This has all of the benefits as the POP Plan above plus it allows employees to be reimbursed for expenses like deductibles, coinsurance, co-pays, prescription drugs, vision expenses, dental expenses, day care services.  Even the most comprehensive insurance policies have out-of-pocket expenses.  FSAs can help your employees save on these expenses.  Similar to a Premium Only Plan, a Flexible Spending Account permits pretax payment of insurance premiums and also offers three additional benefits to employees: Employees use payroll withholding of pretax dollars to pay for work-related expenses associated with care of a live-in dependent, such as a child or elderly relative. 
A MasterCard debit card is also available for at the point of service payments. This is an ERISA Plan and requires plan documentation.

COBRA Administration
Who needs it?  If you are asking. . .
  • Am I legally required to offer COBRA to my employees?
  • What are the penalties if I don’t offer COBRA?
  • Can I lose my business if COBRA is not administered properly?
Updates to employee benefit laws occur every day, and COBRA is no exception.  Most employers simply cannot keep up with changes to State and Federal laws.  Others are not even aware that COBRA rules and regulations apply to them.

Why do you need it?
  • To avoid penalties
  • To have trained personnel responsible for administration
  • To keep employers in IRS compliance with notifications, record maintenance, and billings

At NBI and Associates, we understand that one small mistake can spell disaster.  Every single detail must be handled correctly the first time, every time. Avoiding the risk involved in keeping compliant with one of the federal government's most complex laws is an enormous responsibility.  NBI and Associates can eliminate this time-consuming task from your duties and give you more time to focus on your overall corporate needs.  Our professional staff is dedicated and devoted to making sure that everything is completed in a timely and accurate manner.  Don't increase your payroll budget; we already have the staff.

The COBRA concept is simple.
Meeting COBRA requirements is not.

HEALTH REIMBURSEMENT ARRANGEMENTS
HRA

Every employer is faced with increasing premiums for their health insurance and an HRA is a viable option to combat those rates increases.  With HRAs, you can . . .
  • Have the flexibility to design plans to enhance your employees' benefits,
  • Cut your monthly insurance premium expenses to a manageable level,
  • Have the Carrier Independence that is critical in today's market, and
  • Implement an affordable healthcare expense budget.
HRAs provide the employer with increased choices and greater control over expenses.

What are Health Reimbursement Arrangements?
  • Also known as Health Reimbursement Accounts and HRAs, these newly authorized plans offer great promise for both employers and employees.
  • HRAs are defined contribution healthcare plans, not defined benefit plans.
  • They are employer-sponsored plans that combine the best aspects of flexible Spending Accounts (FSAs) and Health Savings Accounts (HSAs).
  • HRAs allow employees to rollover unused balances at the end of the year - so employees will not complain that they may lose their money.
  • HRAs do not require that employers advance claims payments to employees or healthcare providers during the early months of the plan year.
  • HRAs are provided with employer dollars, not employee salary reductions, so HRAs have greater employee acceptance.
  • HRAs permit the employer to reduce health plan costs by coupling the HRA with a high deductible (and usually lower-cost) health plan.
  • HRAs even the playing field between the group purchasing power of larger employers and smaller employers.

This is an ERISA Plan and requires plan documentation.

Medical Expense Reimbursement Plans
MERP
This is similar to the HRA, yet employee participation in premiums is allowed.  Every employer is faced with increasing premiums for their health insurance and a Medical Expense Reimbursement Plan (MERP) is a viable option to combat those rates increases.  With MERPs you can . . .
  • Have the flexibility to design plans to enhance your employees' benefits,
  • Cut your monthly insurance premium expenses to a manageable level,
  • Have the Carrier Independence that is critical in today's market, and
  • Implement an affordable healthcare expense budget.
MERPs provide the employer with increased choices and greater control over expenses.

What are Medical Reimbursement Plan?

  • Also known as Medical Expense Reimbursement Plans (MERP), these plans have been around for a long time and they offer great costs controls for both employers and employees.
  • They can be either employer-funded plans or employee funded plans that combine the best aspects of flexible Spending Accounts (FSAs) and Health Savings Accounts (HSAs).
  • HRAs permit the employer to reduce health plan costs by coupling the MERP with a high deductible (and usually lower-cost) health plan.
  • MERPs even the playing field between the group purchasing power of larger employers and smaller employers.
This is an ERISA Plan and requires plan documentation.

Wrap Documents

Federal Compliance Warning
Summary Plan Descriptions (SPDs) Must Be Distributed to Your Plan Participants

The Problem
ERISA (the federal Employee Retirement Income Security Act) requires employers who are plan administrators of their group health plans to comply with 2 important requirements or risk potential penalties and possible audits:
  • 1. Maintain and distribute Summary Plan Descriptions (SPDs) to plan participants which accurately reflect the contents of the plan and which include specific information as required under federal law.
  • 2. Group health plans must be administered in accordance with a written Plan Document which must be made available to plan participants and beneficiaries upon request.
Many companies mistakenly assume that insurance contracts, certificates of insurance and benefits summaries fulfill the ERISA requirements for an SPD and Plan Document - but they don't include the required or recommended provisions that protect the plan and the employer.

Penalties for Non-Compliance
Employers/plan administrators may be liable for serious penalties if they don't provide an SPD or have a current Plan Document:
  • Failure to provide an SPD or Plan Document within 30 days of receiving a request from a plan participant or beneficiary can result in a penalty of up to $110/day per participant or beneficiary for each violation.
  • Lack of an SPD could trigger a plan audit by the U.S. Department of Labor (DOL).
  • The DOL has increased its audit staff and national enforcement initiatives to investigate employers' compliance with Health Care Reform, resulting in companies of all sizes being audited and being required to provide an SPD and Plan Document.


The Solution Typically, the cost to develop an SPD and Plan Document can be very expensive--but we have solved this problem with a sophisticated system developed together with a major ERISA law firm that makes it easy and economical to comply with federal requirements.  We can provide you with a Wrap SPD and Wrap Plan Document which are designed to wrap around existing certificates of insurance and benefit plan booklets to provide the required provisions and information necessary to comply with ERISA.  To be compliant, the Wrap SPD and accompanying benefit plan component documents must be distributed to plan participants.  Our document compliance solution includes the following benefits:
  • Customized Wrap SPD and Wrap Plan Document that provide the required ERISA provisions and information that will help you achieve compliance.
  • Distribution guidelines that explain how and when to provide these compliance documents to your plan participants.
  • The ability to keep your documents current and updated should the federal Government Issue new amendments or if plan information needs to be changed.
  • The Service includes all required Benefit Notices.

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