Benefits Guide: Basics, Government and Tax-Exempt Organizations
(Posted on December 30, 2020 by Carol V. Calhoun)

Carol V. Calhoun has written a Benefits Guide entitled “Government and Tax-Exempt Organizations” for Bloomberg Law. The Bloomberg Law Benefits Guide is intended to be a resource for non-benefits practitioners that is easy to understand and explains complex topics in a straightforward way. Ms. Calhoun’s guide covers the types of plans maintained by governmental and tax-exempt organizations, determination of whether a plan is governmental, legal requirements and restrictions, and correction methods in case of errors in administration. The Benefits Guide is available to Bloomberg subscribers, or a copy of Ms. Calhoun’s chapter is below.

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457 Answer Book, Eighth Edition, Published
(Posted on June 22, 2020 by Carol V. Calhoun)

The Eighth Edition of the 457 Answer Book was published on June 5, 2020. Carol V. Calhoun is the author of Chapter 1, History of 457 Plans, and Chapter 14, Miscellaneous Issues.

The 457 Answer Book is an in-depth resource that provides answers to the questions that tax-exempt organizations, state and local governments, their accountants, tax and legal advisors, 457 administrators, product providers, and investment counselors need to know.

Guiding readers through all aspects of 457 plan administration — from installation through the audit process — the 457 Answer Book describes: the duties and responsibilities of those performing the functions; the required legal, accounting, and administrative tasks; checklists that facilitate control of each administrative process; and suggested forms.

The 457 Answer Book also provides:

The history and legal origins of the plan
Design and drafting standards
Suggested administrative procedures
Data processing and payroll considerations
Operations and fund flow mechanics
Marketing and sales suggestions
And much more

More information on the book can be found at this link.

403(b) and 457(b) Plan Compliance Challenges PowerPoint Now Available
(Posted on August 27, 2019 by Carol V. Calhoun)

Sections 403(b) and 457(b) plan compliance presents significant challenges for employee benefits counsel and plan administrators. Sponsors of 403(b) and 457(b) plans must consider the impact of recent regulatory and litigation developments to ensure strict compliance to avoid potential claims.

As part of a Strafford webinar on “403(b) and 457(b) Plan Compliance Challenges,” Carol V. Calhoun gave a presentation on ways in which new developments create challenges for tax-exempt and governmental organizations which sponsor such plans. A copy of the PowerPoint for her speech can be found at this link.

403(b) and 457(b) Plan Compliance Challenges: Avoiding Pitfalls in Plan Design and Administration
(Posted on August 27, 2019 by Carol V. Calhoun)

A recent Strafford CLE webinar guided employee benefits counsel on key compliance challenges in the design and administration of 403(b) and 457(b) plans and methods to overcome them. A panel discussed complex rules and pitfalls to avoid in plan design, key administrative challenges, the universal availability rule, excess contributions, hardship distributions, and methods to limit claims.

The PowerPoint slides for the portion of the presentation given by Carol V. Calhoun are below.

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IRS Permits New Benefits in High Deductible Health Plans
(Posted on July 18, 2019 by Carol V. Calhoun)

The IRS has recently issued Notice 2019-45, which increases the scope of preventive care that can be covered by a high deductible health plan (“HDHP”) without eliminating the covered person’s ability to maintain a health savings account (“HSA”).

As background, since 2003, eligible individuals whose sole health coverage is a HDHP have been able to contribute to HSAs. The contribution to the HSA is not taxed either when it goes into the HSA or when it is used to pay health benefits. It can for example be used to pay deductibles or copays under the HDHP. But it can also be used as a kind of supplemental retirement plan to pay Medicare premiums or other health expenses in retirement, in which case it is more tax-favored than even a regular retirement plan.

As the name suggests, a HDHP must have a deductible that exceeds certain minimums ($1,350 for self-only HDHP coverage and $2,700 for family HDHP coverage for 2019, subject to cost of living changes in future years). However, certain preventive care (for example, annual physicals and many vaccinations) is covered without having to meet the deductible. In general, “preventive care” has been defined as care designed to identify or prevent illness, injury, or a medical condition, as opposed to care designed to treat an existing illness, injury, or condition.

Notice 2019-45 expands the existing definition of preventive care to cover medical expenses which, although they may treat a particular existing chronic condition, will prevent a future secondary condition. For example, untreated diabetes can cause heart disease, blindness, or a need for amputation, among other complications. Under the new guidance, a HDHP will cover insulin, treating it as a preventative for those other conditions as opposed to a treatment for diabetes. Read more.

New PowerPoint: Avoiding Fringe Benefit Pitfalls: Tax Traps, De Minimis Rules, Correction Procedures, Fiduciary Risks
(Posted on April 4, 2019 by Carol V. Calhoun)

A recent CLE webinar guided benefits counsel and advisers on recent rules and regulations in providing fringe benefits to employees and avoiding dangerous and costly issues that arise regarding such benefits including personal liability under ERISA. The panel discussed key considerations in structuring fringe benefits, tax traps, de minimis rules, effective correction procedures and methods to minimize fiduciary risks. The PowerPoint presentation for the portion of the webinar dealing with tax aspects is now available at this link.

Avoiding Fringe Benefit Pitfalls: Tax Traps, De Minimis Rules, Correction Procedures, Fiduciary Risks
(Posted on April 4, 2019 by Carol V. Calhoun)

The PowerPoint slides for the portion of the presentation dealing with tax aspects are below.

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State Retirement Systems
(Posted on February 24, 2019 by Carol V. Calhoun)

New Immigration Rules Create Issues for Employer Health Plans
(Posted on August 9, 2018 by Carol V. Calhoun)

A leaked draft of Proposed Department of Homeland Security (“DHS”) regulations indicates that certain non-US citizens may be disadvantaged in extending or adjusting their immigration status if they obtain health insurance coverage through the Health Insurance Marketplace (“Marketplace”) set up under the Patient Protection and Affordable Care Act (“ACA”) or Medicaid, or obtain benefits under the Children’s Health Insurance Program (“CHIP”) for their dependents (even US citizen dependents). From an employee benefits perspective, the proposed rules have three effects on employers:

Employees may have questions about whether they can or should switch coverage from the Marketplace or CHIP to the employer’s health plan.
Employers are required to give notices to employees on hiring about the availability of health insurance through the Marketplace, and annually about the availability of CHIP. Employers may want to consider adding information to these notices regarding the potential impact on immigration of accepting either of these benefits.
Employers that wish to retain non-US citizen employees may wish to improve health benefits (particularly for dependents) to discourage use of the Marketplace or CHIP.

The change in regulations would have a number of effects on employers who hire non-US citizens, particularly in instances in which the employer is sponsoring them (such as for an H-1B visa or a green card) which are beyond the scope of this post. However, this post discusses the specific impact on employee benefits of the proposed regulations, and potential employer responses to them. Read more.

Substantial Risk of Forfeiture Definition Comparison Chart
(Posted on May 29, 2018 by Carol V. Calhoun)

The chart that follows compares the circumstances in which a person’s rights to compensation are subject to a substantial risk of forfeiture (SRF) for purposes of income taxation under each of sections 83, 409A, 457, and 457A of the Internal Revenue Code (I.R.C.), Social Security and Medicare (FICA) taxation under I.R.C. § 3121(v)(2), and excise taxes under I.R.C. § 4960. As a practitioner drafting or advising on compensation arrangements—especially arrangements involving non-qualified (or ineligible), unfunded deferred compensation (referred to herein as NQDC)—you must be able to correctly interpret these I.R.C. sections and distinguish the concepts of SRF expressed therein to ensure that an employer understands and achieves the tax goals for which its arrangements’ are designed. Read more.