Fall into Savings with BASE®

Fall is in the air, which also means looming expenses with the upcoming holiday season, as well as an increase in utility bills.  That makes this time of year the perfect time to consider money saving benefit and tax planning strategies.

One thing small business owners should consider is a Section 105 Health Reimbursement Arrangement (HRA).  An HRA allows self-employed business owners an opportunity to save thousands in tax dollars on family medical expenses.  The average BASE® HRA client saves over $4,500 each year

A BASE® client out of Lenox, IA stated, “We depend on our CPA to provide us with every legitimate tax deduction we can get.  That is why we have been using the BASE® Health Reimbursement Arrangement (HRA) to deduct our medical expenses each year.  The HRA makes a big difference in the amount of income taxes we have to pay – all money out of our pocket.”

BASE® has worked closely with tax advisors and insurance professionals across the country to offer this tax saving program to qualified small business owners.  With rules and regulations being handed down by the Department of Labor and Internal Revenue Service continually changing, these busy professionals rely on BASE® to help keep their clients in compliance.

Fall is the perfect time of year to consider the Section 105 HRA.  As business owners prepare to meet with their accountants, this is a great time for small business owners to see if they are going beyond the standard deduction and utilizing a Section 105 HRA to deduct their medical expenses from their business return.

While small business owners can enroll in the BASE® HRA any time during the year, why not fall into savings now with BASE®!

Anne Case                                                                                         

BASE® - Director of Marketing & Communications

July 31st PCORI Deadline

The PCORI fee deadline is on July 31, 2016 and relates to Health Reimbursement Arrangements (HRAs), per the Affordable Care Act. If you or your clients have been utilizing an HRA, be aware of the impending deadline.   

The fee is required to be reported annually on Form 720, Quarterly Federal Excise Tax Return, for the second quarter of the calendar year.  The fee for a plan year ending on or after October 1, 2015, but before October 1, 2016, is $2.17 multiplied by the number of employees covered under the plan for that plan year.  However, plan years ending before October 1, 2015 should figure the fee by multiplying the number of employees covered under the plan for that plan year by $2.08.

This fee has been in effect since 2012 and will continue to be adjusted annually based on inflation, as determined by the Secretary of Health and Human Services. Currently, the PCORI fee will no longer apply to policy or plan years ending after September 30, 2019.  Employers should review Summary Plan Descriptions to make certain the correct dollar amount is being used on the form for 2016. 

Not all HRA plan sponsors are required to pay the fee per IRS and Department of Labor guidance issued.

•  Section 105 HRA (with only 1 employee)
Business owners with one employee that have an HRA in place do not have to pay this fee.

•  Integrated HRA (with 2 or more employees)
Business owners with two or more employees that have an HRA in place are required to pay the fee by July 31, 2016.

•  Excepted Benefits HRA
Business owners with an Excepted Benefits HRA in place are not subject to the fee since it provides only excepted benefits.

For complete instructions on paying and submitting the PCORI fee, please visit http://www.irs.gov/pub/irs-pdf/i720.pdf.  If you have any questions regarding this information or tax advantaged plans call BASE® at 1-888-386-9680. Learn more about how you and your clients can save money with tax saving benefits by visiting www.BASEonline.com or contacting a BASE® representative. 

Emily Greiner
BASE®--Marketing/Communication Specialist 

Increase in Rules Could Mean Increase in Potential Audits

There is an increase in the number of Department of Labor (DOL) rules regulating health and welfare plans, which is putting employers at an increased risk of significant penalties with DOL audits said to be on the rise. The ERISA Wrap protects you from potential fines you may receive from the DOL concerning SPD and Plan Documents in the event of an audit. Without the ERISA Wrap your company is vulnerable to a $110 per employee per day fine. BASE® makes sure you fulfill the requirements for an SPD and Plan Document, while also adding an extra compliance service package. Plus, this plan documentation includes all salary reduction information when applicable in the form of a Premium Only Plan.  

Many employers believe that certificates of insurance, insurance contracts and benefit summaries are enough to fulfill the requirement for SPDs and Plan Documents. However, they do not contain all of the required information. In order to stay clear of compliance issues, employers must have an ERISA Wrap in place. An ERISA Wrap is designed to wrap around insurance certificates and benefit plan booklets, along with other required documents, to meet the provisions that protect the plan and employer. 

BASE® provides customized Wrap SPD and Wrap Plan Documents that provide the required ERISA provisions and information that will assist in achieving compliance. BASE® also offers a valuable compliance package, including: 

Disclosure of Grandfathered Health Plan Status
Dependent Coverage to Age 26
Pay or Play
Medical Loss Ratio
Women’s Health & Cancer Rights Act
Newborns’ & Mothers’ Health Protection Act
•     Summary of Material Modifications (SMM)
Includes all required salary reduction information, when applicable 
Outlines benefits offered on a pre-tax basis, if any
Keeps salary reduction and insurance information in same document for         complete wrap around plan administration
Notice of Patient Protections
Notice of Coverage Options
Children’s Health Insurance Program Reauthorization Act (CHIPRA)
Wellness Program Disclosure
HIPAA Special Enrollment Rights Notice

With the SPD and Plan Document requirement, an increase in DOL auditors, and the recent DOL overtime ruling set to go into effect December 1, 2016, means an increased chance of an audit. In the past decade, 72% of DOL audits have resulted in penalties.  Employers should move quickly to assess all compliance risks. One way to start is by calling BASE® to make sure benefit plans include the necessary documentation required under federal law. 

Contact a BASE® representative today to learn more about the ERISA Wrap at 1-888-386-9680 or visit www.BASEonline.com

Emily Greiner
BASE®--Marketing/Communication Specialist