Products October 4, 2017

Benefitfocus Looks to Ease CDHP and COBRA Administration

Employers can manage HDHPs, promote enrollment and satisfy compliance requirements through a single partner.

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Benefitfocus, a provider of cloud-based benefits management software, has launched Benefitfocus Consumer Directed Healthcare Accounts and Benefitfocus COBRA [Consolidated Omnibus Budget Reconciliation Act] Administration.

In light of rising health care costs, the firm aimed to simplify managing a consumer-directed health plan (CDHP). Benefitfocus consumer-directed health care accounts allow employees to enroll, open and manage accounts via a single platform using one password, eliminating the need for multiple steps. The program is also taking a mobile-ready approach by allowing employees to submit expenses for reimbursement by taking a picture and sending it via a mobile device. These expenses are immediately processed and the account balances are updated instantly, the firm says.

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Benefits leaders canmonitor plan participation and employee contribution trends with the reporting capabilities built within the BenefitFocus Marketplace. Changes in employee eligibility within Benefitfocus Marketplace trigger required COBRA communications, eliminating the need for manual data entry into third-party systems. The firm also notes that, because third-party systems typically rely on weekly file transfers, systems can easily become out of sync. Benefitfocus COBRA administration processes files daily, potentially reducing compliance risk for employers.

“By streamlining the experience on the Benefitfocus Platform, we can help employers increase employee participation in critical benefits such as health savings accounts [HSAs] and remove the compliance risk of processes such as COBRA administration,” said Benefitfocus co-founder and CEO Shawn Jenkins. “A common theme from our employer, insurance carrier and broker partners has been a desire to simplify benefits communication, enrollment, administration and services with a single partner. With the addition of these new solutions, we are positioned to help them achieve that goal.”

For more information, visit www.benefitfocus.com.

Compliance October 4, 2017

IRS Issues Final Regulations About Mortality Tables

In a statement, ERIC said it is pleased the agency took into account its request for flexibility for DB plan sponsors to potentially delay for one year the use of the new mortality tables for purposes of satisfying minimum funding standards.

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The Internal Revenue Service (IRS) has issued Notice 2017-60, which sets forth the mortality table that defined benefit (DB) plans—i.e., those under Section 417(e)(3) of the Internal Revenue Code (IRC) and Section 205(g)(3) of the Employee Retirement Income Security Act (ERISA)—will use to determine minimum present value for certain annuity distributions. The notice applies to annuities with starting dates occurring during stability periods beginning in the 2018 calendar year.

 

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This mortality table is a modified unisex version of the mortality tables specified under IRC Section 430(h)(3)(A) for plan years beginning in 2018. The notice also provides updated static mortality tables that are determined using the methodology in Section 1.430(h)(3). These updated tables apply for plan years beginning this year, with respect to valuation dates occurring during 2018. They also apply for the plan year beginning during 2018 if the option under Section 1.430(h)(3)—available under certain circumstances for valuation dates in 2018—is to apply mortality tables determined in accordance with regulations previously in effect.

 

In addition, the agency issued Revenue Procedure 2017-55, which sets forth the procedure by which the sponsor of a DB plan subject to the funding requirements of IRC Section 430 may request the IRS’ approval to use plan-specific substitute mortality tables.

 

The IRS has issued final regulations prescribing mortality tables to be used by most DB plans. The tables specify the probability of survival, year-by-year, for an individual, based on age, gender and other factors. This information is used, together with other actuarial assumptions, to calculate the present value of a stream of expected future benefit payments for purposes of determining a DB plan’s minimum funding requirements. These mortality tables are also relevant in determining the minimum required amount of a lump-sum distribution from such a plan.

 

In addition, the document contains final regulations updating the requirements a plan sponsor must meet in order to obtain IRS approval to use plan-specific mortality tables, instead of the generally applicable tables, for minimum funding purposes.

 

In a statement, the ERISA Industry Committee (ERIC) said it is pleased the Treasury Department took into account a number of the requested changes listed in its comment letters, including flexibility for DB plan sponsors to potentially delay, for one year, using the new mortality tables to satisfy minimum funding standards.

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