2020 Health and Group Benefits Plan Compliance Calendar

Calendar Plan Year & Calendar Employer Tax Year*

2020 Health and Group Benefits Plan Compliance Calendar January through June
2020 Health and Group Benefits Plan Compliance Calendar July through December

January 2020

31   Last day to report on Form W-2 to employees the cost of applicable employer-sponsored coverage under a group health plan

February 2020

28   Paper Filing – Last day for applicable large employer member to file one or more Forms 1094-C and to file Form 1095-C for each employee who was a full-time employee for any month of the calendar year 2019

28   Paper Filing – Last day for person that provides minimum essential health coverage to an individual during calendar year 2019 to file an information return with the IRS reporting the coverage. Filers will use Form 1094-B, Transmittal of Health Coverage Information Returns, to submit Forms 1095-B, Health Coverage, to IRS.

28   Notice of Breach of Unsecured Protected Health Information – breaches affecting fewer than 500 individuals. Last day for covered entities to notify HHS of a breach affecting fewer than 500 individuals. (Covered entities must notify affected individuals of such a breach without unreasonable delay and in no case later than 60 days following the discovery of a breach.)

March 2020

02   Last day to file electronically with DOL Form M-1 annual report for MEWAs (and certain entities claiming exception) for 2019 (without extension)

02   Last day for filers of IRS For 1095-B, Health Coverage, to furnish a copy of Form 1095-B to the person identified as the “responsible individual” on the form for coverage in 2018

02   Last day for an applicable large employer member to furnish a Form 1095-C, Employer-Provided Health Insurance Offer and Coverage, to each of its full-time employees

31   Electronic Filing – Last day for an applicable large employer member to file one or more Forms 1094-C and to file a Form 1095-C for each employee who was a full-time employee for any month of the calendar year 2019 bb

31  Electronic Filing – Last day for person that provides minimum essential coverage to an individual during calendar-year 2018 to file an information return with the IRS reporting the coverage. Filers will use Form 1094-B, Transmittal of Health Insurance Offer and Coverage Information Returns, to submit Forms 1095-B, Health Coverage, to IRS

May 2020

15   Last day (unextended deadline) to file Form 990 series for a 2019 VEBA. An automatic filing extension of 6 months may be requested by filing Form 8868 by the due date of the Form 990

July 2020

28   Last day to furnish Summary of Material Modifications (SMM) to participants and beneficiaries receiving benefits

31   Last day to file Form 5500 for 2019 without extension

31   Last day (unextended deadline) to file Form 5330 and pay excise tax on disqualified benefits underfunded welfare plans

31   Last day (unextended deadline) to file Form 5330 and pay excise tax on certain excess fringe benefits

September 2020

30   Last day to furnish Summary Annual Report (SAR) for 2019 plan year to participants and beneficiaries if an extension to file Form 5500 was not obtained

October 2020

Prior to Oct. 15, 2020 – Medicare Part D Creditable Coverage Notice – Employers offering prescription drug coverage to Medicare Part D eligible individuals must notify those individuals whether the offered prescription drug coverage is creditable coverage. Notice must be provided prior to Oct. 15, 2020.

15   Last day to file Form 5500 with extension

December 2020

15   Last day (with extension) to furnish Summary Annual Report (SAR) for 2019 plan year to participants and beneficiaries

*This calendar is designed to provide a general overview of certain key compliance dates and is not meant to indicate all possible compliance dates that may affect your plan.

Copyright © 2020 by Findley, Inc. All rights reserved.

To access other selected requirements with no specific deadline plus a detailed description of each compliance item, click below.

View 2020 Detailed Health and Welfare Plan Compliance Calendar/Checklist and other selected requirements with no specific deadline

Interested in other compliance calendars?

Defined Benefit

Defined Contribution

Could You Be Supporting a Hidden Retiree Health Plan?

A retiree health plan is when ex-employees are provided for or allowed to purchase health care through their former employer. 

Sponsoring a hidden retiree health plan happens more often than you might think. Having even an informal policy of extending active health benefits to retirees and charging the “full” active premium or supplementing retiree health benefit coverage for some time are two examples of creating a retiree health benefit plan and incurring the accompanying plan liability for health benefits promised in the future.

Could You Be Supporting a Hidden Retiree Health Plan?

Examples

1) ABC Company has a fully insured medical plan for its active employees. ABC pays 60% of the premium. The employees pay the rest. The employee handbook has a paragraph that reads, “If you retire from active service after age 60 with 15 years of service, you may remain in the health insurance plan until age 65. You will pay the employer and employee portion of the premium.”

2) Ten years ago, XYZ Company had an executive retire at age 60. He had been with the company for 17 years. He was allowed to stay on the active medical plan until age 65. He had to pay the employer and employee portion of the premium. All staff received an email at the time stating that this was now available to all employees who retire after age 60 with 15 years of service. The language in the email never made it in the employee handbook, but it was a well-known policy.

3) MNO Corporation has a collective bargaining agreement with its union that provides $150 per month for medical coverage for anyone who retires before age 65. Coverage ends at age 65, and the participants must purchase the coverage from MNO.

ABC, XYZ, and MNO have retiree medical plans and might need to recognize a liability on their balance sheets and annual expense on their income statements for the promised benefits.

Why is There a Liability?

The question often asked in regards to ABC and XYZ is, “The retiree pays the full cost of the premium. It costs the company nothing. Why is there a liability?”

There are two parts to the answer. The first part is in the way the premium is calculated for the active health plan. The insurance company calculates the premium rates for the entire population, including retirees. Since these retirees are older, their premium amounts are higher than for younger employees in the plan. Without the retirees in the plan, the total premium would be lower, and thus, the employer portion would be lower.

Looked at another way, if you could calculate a hypothetical premium rate for just the retiree group, it would be much higher due to their ages. The difference between the hypothetical premium level and the “full” active premium charged for medical coverage is called a “hidden subsidy.”

The second part is from the accounting standard ASC 715-60-05-2 which states, “a postretirement benefit plan is an arrangement that is mutually understood by an employer and its employees whereby an employer undertakes to provide its current and former employees with benefits after they retire in exchange for the employees’ services over a specific period of time.”

This second part of the above answer also applies to the MNO Corporation example. Their annual cost for the retirees may seem minimal and recorded as an annual payroll and benefits cost along with the active medical plan. However, for all three companies, the retirees are not receiving benefits as a part of their compensation while working. The retiree benefits accrue while working but are paid after retirement.

This promise of future benefits can trigger a liability to recognize on the balance sheet and an annual expense that runs through the income statement.

How Does an Employer Know if They Need to Recognize a Liability?

The employer should discuss it with their auditors. Depending on the circumstances, an auditor could consider it de minimus or may request that an actuary measure the liability before providing an opinion about the impact on the company financials.

Options

If the auditor does not consider it de minimus, in arrangements like ABC’s or XYZ’s, a company could charge the retiree more than the active premium –something more like the above hypothetical premium. (An actuary or healthcare consultant can help you set a hypothetical rate.) The hypothetical rate would remove the “hidden subsidy” and reduce the costs to a de minimus level. Additionally, the increased cost of coverage may cause retirees to look elsewhere for more affordable coverage.

Alternatively, if the employer wants to keep an arrangement that is not de minimus, then it will need to engage an actuary to perform annual valuations for financial reporting purposes.

If you have questions or would like to discuss any formal or informal arrangements you have in place for your retirees, contact David Davala at 216.875.1923 or David.Davala@findley.com.

Published July 12, 2019

© 2019 Findley. All Rights Reserved.

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2019 Health and Welfare Plans Compliance Calendar/Checklist

Significant Due Dates – Calendar Plan Year & Calendar Employer Tax Year*

2019 Health and Group Benefits Compliance Calendar

January 2019

31   Last day to report on Form W-2 to employees the cost of applicable employer sponsored coverage under a group health plan

February 2019

28   Paper Filing – Last day for applicable large employer member to file one or more Forms 1094-C and to file Form 1095-C for each employee who was a full time employee for any month of the calendar year 2018

28   Paper Filing – Last day for person that provides minimum essential health coverage to an individual during calendar year 2018 to file an information return with the IRS reporting the coverage. Filers will use Form 1094-B, Transmittal of Health Coverage Information Returns, to submit Forms 1095-B, Health Coverage, to IRS.

28   Notice of Breach of Unsecured Protected Health Information – breaches affecting fewer than 500 individuals. Last day for covered entities to notify HHS of a breach affecting fewer than 500 individuals. (Covered entities must notify affected individuals of such a breach without unreasonable delay and in no case later than 60 days following the discovery of a breach.)

March 2019

01   Medicare Part D Creditable Coverage Disclosure to CMS – Last day for employers offering prescription drug coverage to Medicare Part D eligible individuals to disclose to CMS whether coverage is creditable prescription drug coverage by submitting a completed online Creditable Coverage Disclosure to CMS Form

01   Last day to file electronically with DOL Form M-1 annual report for MEWAs (and certain entities claiming exception) for 2018 (without extension)

04   Last day for filers of IRS For 1095-B, Health Coverage, to furnish a copy of Form 1095-B to the person identified as the “responsible individual” on the form for coverage in 2018

04   Last day for an applicable large employer member to furnish a Form 1095-C, Employer-Provided Health Insurance Offer and Coverage, to each of its full-time employees

31   Electronic Filing – Last day for an applicable large employer member to file one or more Forms 1094-C and to file a Form 1095-C for each employee who was a full time employee for any month of the calendar year 2018. [IRS 2018 Instructions for Forms 1094-C and 1095-C provide that, while generally the Forms must be filed by March 31 when filing electronically, for calendar year 2018 the Forms are required to be filed by April 1, 2019 when filing electronically.]

31  Electronic Filing – Last day for person that provides minimum essential coverage to an individual during calendar-year 2018 to file an information return with the IRS reporting the coverage. Filers will use Form 1094-B, Transmittal of Health Insurance Offer and Coverage Information Returns, to submit Forms 1095-B, Health Coverage, to IRS. [The IRS 2018 Instructions for Forms 1094-B and 1095-B provide that, while generally the Forms must be filed by March 31 (when filing electronically) of the year following the calendar year of coverage, for Forms filed in 2019 reporting coverage provided in calendar year 2018 the Forms are required to be filed by April 1, 2019 when filing electronically.]

May 2019

15   Last day (unextended deadline) to file Form 990 series for a 2018 VEBA. An automatic filing extension of 6 months may be requested by filing Form 8868 by the due date of the Form 990

July 2019

29   Last day to furnish Summary of Material Modifications (SMM) to participants and beneficiaries receiving benefits

31   Last day to file Form 5500 for 2018 without extension

31   Last day (unextended deadline) to file Form 5330 and pay excise tax on disqualified benefits under funded welfare plans

31   Last day (unextended deadline) to file Form 5330 and pay excise tax on certain excess fringe benefits

31   Last day for plan sponsor of a self-insured plan to file Form 720 and pay the PCORI fee for 2018 plan year

September 2019

30   Last day to furnish Summary Annual Report (SAR) for 2018 plan year to participants and beneficiaries if an extension to file Form 5500 was not obtained

October 2019

14   Prior to Oct. 15, 2019 – Medicare Part D Creditable Coverage Notice – Employers offering prescription drug coverage to Medicare Part D eligible individuals must notify those individuals whether the offered prescription drug coverage is creditable coverage. Notice must be provided prior to Oct. 15, 2019.

15   Last day to file Form 5500 with extension

December 2019

15   Last day (with extension) to furnish Summary Annual Report (SAR) for 2018 plan year to participants and beneficiaries

*This calendar is designed to provide a general overview of certain key compliance dates and is not meant to indicate all possible compliance dates that may affect your plan.

Copyright © 2019 by Findley, Inc. All rights reserved.

To access other selected requirements with no specific deadline plus a detailed description of each compliance item, click below.

View 2019 Detailed Health and Welfare Plan Compliance Calendar/Checklist and other selected requirements with no specific deadline

Interested in other compliance calendars?

Defined Benefit

Defined Contribution

Expanding Workplace Wellness Initiatives into Our Communities

Our Country’s Current State

According to a 2017 Gallup World Poll, the United States ranks 17th in life satisfaction scores.[1] For the first time ever, Americans’ life expectancies are on the decline. The US ranks number one in obesity and chronic conditions caused by obesity worldwide[2]. It’s evident that our country has room for improvement when it comes to health and well-being.

Where to Begin?

Make Well-being a Priority

Here’s the good news: about 75% of employers are doing something by offering wellness programs and benefits to support their employees in taking steps toward a healthier lifestyle.

However, a broader approach will be required to begin and sustain long-term behavior change that can improve health and well-being nationwide. To create a true Culture of Health, individuals, employers, and institutions must work together. With collaboration, we can increase access to the resources individuals need and provide opportunities to make healthier choices. In a Culture of Health, communities flourish and individuals thrive.

Community Culture of Health:
A Success Story

Organizations ready to make a bigger difference can look for ways to expand wellness beyond the workplace. Here’s one success story: A rural school system built a grant-funded gymnasium with state of the art fitness equipment. Recognizing the lack of access to fitness facilities for residents, as well as the need for levy support, the school opened the gym to the public during evening and weekend hours. The results were clear. This one investment brought significant community engagement, improved individual health, and led to the passing of the school levy.

Follow These Best Practices

Are you ready to consider ways to expand your organization’s wellness efforts into the community? Start with the best practices established by the Robert Wood Johnson Foundation[3] :

  1. Create a shared vision
  2. Establish community buy-in
  3. Evaluate access and feasibility
  4. Implement, assess, and refine

[1] “State of the States.” Gallup. 2019. Accessed January 30, 2019 https://news.gallup.com/poll/125066/State-States.aspx?g_source=link_NEWSV9&g_medium=TOPIC&g_campaign=item_&g_content=State%2520of%2520the%2520States

[2] “Obesity Update 2017.” OECD. 2017. Accessed January 30, 2019. https://www.oecd.org/els/health-systems/Obesity-Update-2017.pdf

[3] “Healthy Communities.” Robert Wood Johnson Foundation. 2018. Access January 30, 2019. https://www.rwjf.org/en/our-focus-areas/focus-areas/healthy-communities.html

Posted February 1, 2019

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