As the year draws to an end, deadlines are approaching for various amendments, filings and notices for both qualified retirement plans and health and welfare plans. This article summarizes some of the more significant requirements occurring both at the end of 2014 and at the beginning of 2015. Please note that the list of deadlines focuses on calendar year plans and does not provide dates for non-calendar year plans. Also, the list is not meant to be exhaustive.
By December 2, 2014:
- Notices and Disclosures: For calendar years plans, the following notices must be furnished to plan participants no later than December 2, 2014 for the 2015 plan year:
- 401(k) Plan Safe Harbor Notice.
- 401(k) Plan Automatic Enrollment Notice.
- Qualified Default Investment Notice.
By December 15, 2014:
- Summary Annual Reports: For calendar year defined contribution plans that elected to extend the due date of filing of Form 5500 to October 15, summary annual reports must be distributed to participants and beneficiaries no later than December 15, 2014.
By December 31, 2014:
- Safe Harbor 401(k) Plans-Adopting a Safe Harbor Plan or Feature: Generally, a safe harbor 401(k) feature must be in effect for an entire 12-month plan year. If a plan sponsor wishes to add a safe harbor feature to an existing 401(k) plan for the 2015 plan year, the amendment must be adopted by December 31, 2014. Some exceptions to the general 12-month plan year rule include the adoption of a new 401(k) plan with a safe harbor feature and a plan termination.
- Amendments to SafeHarbor Feature:Since a safe harbor 401(k) feature must be in effect for an entire plan year, a plan sponsor is limited in its ability to amend plan provisions relating to the feature once the plan year begins. A plan sponsor considering amendments to its safe harbor 401(k) plan design for 2015 may adopt these amendments on or before December 31, 2014, with an effective date of January 1, 2015, to avoid jeopardizing the safe harbor status of the plan; provided that the 401(k) Safe Harbor Notice, due by December 2, clearly outlines the nature and effect of the amendment. In certain limited cases, amendments may be made mid-year, including certain amendments to discontinue safe harbor contributions.
- Amendments Recognizing Same-Sex Marriages:Plan sponsors must amend their qualified plans, as necessary, to reflect the Supreme Court's decision in United States v. Windsor and subsequent Internal Revenue Service ("IRS") guidance (Revenue Ruling 2013-17 and Notice 2014-19) regarding the impact of Windsor on qualified plans. In Windsor, the Supreme Court held that the exclusion of same-sex spouses from the definition of "spouse' and "marriage" under Section 3 of the Defense of Marriage Act (DOMA) was unconstitutional. Plan sponsors should review the terms of their qualified plans, including the definitions of "spouse" and "marriage," to determine whether they impermissibly exclude same-sex spouses. Any plan terms that are inconsistent with Windsor and subsequent IRS guidance will need to be amended. Conversely, if plan provisions make no such distinction between a same- and opposite-sex spouse, then no amendment will generally be necessary, although in some cases, clarifying amendments may be appropriate. Any required amendments generally must be effective as of June 26, 2013.
- Discretionary Plan Amendments: Generally, plan sponsors must adopt discretionary plan amendments on or before the last day of the plan year when they first become effective. Some exceptions to this rule include amendments to safe harbor 401(k) plan provisions (as discussed above) and benefit cutbacks (which generally must be adopted prospectively).
By January 31, 2015:
- Form 5300 Determination Letter Requests for Cycle D Plans: Cycle D of the IRS determination letter program ends on January 31, 2015. Sponsors of Cycle D plans (those whose plan sponsor's EIN ends in 4 or 9 and multiemployer plans) must submit restated plan documents with their determination letter applications by January 31, 2015; the IRS no longer accepts working copies of plan documents or stand alone amendments. Accordingly, plan sponsors should amend and restate their Cycle D plans to reflect all applicable qualified plan requirements set forth in the IRS 2013 Cumulative List (Notice 2013-84) and to include all amendments adopted by the plan sponsor since the issuance of the most recent determination letter.
- Fee Disclosure Notice to Plan Participants: The original deadline for a plan sponsor to furnish participant fee disclosure under ERISA Section 404(a) was August 30, 2012, and each August 30 thereafter. In FAB 2013-2, the Department of Labor (DOL) provided that plan sponsors could reset the annual due date of their fee disclosure once during either 2013 or 2014 to allow the plan sponsor to coordinate the furnishing of the annual fee disclosure with required year-end notices. The reset date cannot be more than 18 months after the immediately preceding disclosure date. For example, a plan sponsor who furnished the 2013 annual fee disclosure on August 30 could reset the next disclosure date to December 2, 2014 and each December 2 thereafter; in such a case, the fee disclosure could be provided along with the notices listed above under December 2.
HEALTH AND WELFARE PLANS
By December 15, 2014:
- Summary Annual Reports: For calendar year plans that elected to extend the due date of filing of Form 5500 to October 15, summary annual reports must be distributed to participants and beneficiaries by December 15, 2014.
By December 31, 2014:
- Health Flexible Spending Accounts (health FSAs):
- Plan sponsors must amend their health FSAs to lower the maximum salary reduction contribution to $2,500 per year (as adjusted by the IRS for cost of living increases). This amendment is mandatory.
- In addition, if a plan sponsor implemented a carryover of health FSA balances from 2013 to 2014, or intends to implement such a carryover from 2014 to 2015, as permitted by IRS Notice 2013-71, the plan sponsor must amend its health FSA to permit such carryovers. Note that the carryover rule is an alternative to the grace period rule: that is, a plan that permits carryovers cannot have a grace period for the plan year to which the carryover is allowed.
By December 31, 2015 (but plan sponsors may wish to amend in conjunction with amendments to health FSAs):
- Cafeteria Plans: In Notice 2014-55, the IRS modified the rules for cafeteria plans to allow, but not require, a participant to elect mid-year to terminate coverage under a group health plan (other than a health FSA) providing minimum essential coverage (within the meaning of the Affordable Care Act) under the following circumstances:
- The participant's hours are reduced to less than 30 hours per week (regardless of whether the participant loses coverage under the plan), and he or she enrolls in other health coverage providing minimum essential coverage by the first day of the second month following the month in which the original coverage terminated; or
- The participant enrolls in a qualified health plan through a state or federal health care exchange effective no later than the day after the date the original coverage terminated.
The change is effective September 18, 2014. Plan sponsors must amend their plans by December 31, 2015 for operational changes first implemented in 2014. For any change in plan operations after 2014, the amendment is due by the end of the plan year in which the change in operations first occurs.
By January 31, 2015:
- Form W-2: Employers must report the cost of group health coverage on each employee's Form W-2 for 2014. Employees will not be taxed on the cost of the coverage.
- Various notices and disclosures: These must be provided annually and can be included with open enrollment materials:
- Summary of Benefits and Coverage.
- Medicaid/CHIP Premium Assistance Notice.
- Women's Health and Cancer Rights Act Notice.
Date Uncertain (plan sponsors may wish to amend plans in conjunction with the qualified retirement plan amendments for Windsor):
- Optional Amendments Recognizing Same-Sex Marriages: Under IRS and DOL guidance on theWindsor decision, health and welfare plans may now, among other things, permit employees to:
- Pay for health care of a same-sex spouse with pre-tax dollars.
- Be reimbursed from a health FSA for expenses for a same-same sex spouse.
- Treat a same-sex spouse as a spouse under a dependent care assistance plan.
Plan sponsors who wish to provide these optional benefits must amend their plans as necessary.