We hope you had an excellent Labor Day weekend! This month’s Crosby Connection newsletter focuses on the IRS regulation changes for Cafeteria Plans, news on Flex Debit Card Inventory Information Approval Systems, information about our data transfer methods and finally, we are giving you an opportunity to win an ice cream party for your office. Don't forget, as the renewal season heats up, please contact Tina Crosby via email if you plan to schedule a benefits fair or, contact your Crosby consultant to learn more about increasing FSA participation and preparing for your renewal season.
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New Proposed Section 125 Regulations Summary
Last month, the IRS issued long awaited proposed cafeteria plan regulations under Section 125. These New Proposed Regulations are a compilation of both formal and informal IRS guidance from the past 20 years. The regulations do not offer any dramatic changes, but they do offer many clarifications and some minor changes to how plans must operate. These rules are generally effective for plan years beginning on or after January 1, 2009. However, if advantageous, changes may by implemented sooner. Below are some notable points from the New Proposed Regulations: - Guidelines for making new employee pre-tax elections retroactive (to a maximum of 30 days)
- Clarification of requirement for plan documents and plan amendments
- A new method for calculating imputed income for group term life coverage in excess of $50,000
- Notable clarification for orthodontia expenses: under certain circumstances, up-front claims are eligible for reimbursement even before service begins
- Clarification that a 2-year "election lock" for vision and/or dental plans is permissible as long as pre-tax deductions are not used from one year to pay for the next and that the premium is paid no less frequently than annually
- Confirmation that administrative fees may be taken out on a pre-tax basis if paid by employees
- Clarification to specific non-discrimination rule calculations, including definitions of highly compensated individuals and key employees
- Outline of occurrences which could disqualify the entire plan (making all deductions taxable), including:
- Operating a Section 125 plan before or after the plan’s adoption dates
- Offering benefits which are not allowed under a Section 125 plan (for example, Long Term Care)
- Failure to comply with FSA rules of operation, including non-compliance with stated substantiation rules
- Allowing employees to make or revoke elections not in accordance with plan rules
The IRS has solicited written comments that are due by November 5, 2007. Crosby has reviewed and will continue to study the New Proposed Regulations and any subsequent changes. We expect further guidance to be issued based on written comments. |
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**Sundaes On The House!** Share your feelings about your benefits administration challenges in our brief survey and you could win an office ice cream sundae party for up to 200 people, just by responding. Sweet deal? Complete your survey today. |
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Flex Debit Card IIAS Merchant List
When the IRS released Notice 2006-69 last July, it added the use of Inventory Information Approval Systems (IIAS) to its list of valid forms of substantiation methods for use with Flex Debit Cards. IIAS are systems designed to track items as FSA or non-FSA eligible items, thus automatically substantiating purchases of FSA approved items at the point-of-sale. With the issuance of IRS Notice 2007-2 earlier this year, the IRS set forth requirements that all mixed-use stores (i.e. supermarkets, discount stores and wholesale clubs), mail-order vendors and web-based vendors will need to have an IIAS in place by January 1, 2008 to continue accepting Flex Debit Cards. Most pharmacies will also be required to have these systems implemented by January 1, 2009. Over the last year, retailers such as Walgreens, Wal-Mart and Sam's Club have taken steps to develop IIAS at their locations. With 2008 fast approaching, other retailers are adding IIAS and expect them to be ready for January 1st. Crosby has been given a list of merchants that have communicated and confirmed their intention to implement an IIAS. There are several other merchants that are believed to be implementing the IIAS as well, but have not yet confirmed this and therefore are not included on this list. | ACME-SuperValu
Albertson’s-SuperValu
Bigg’s-SuperValu
Brookshires/Super 1 Foods
Buehler Food Markets
Carrs
Cubs-SuperValu
Dominick’s
Farm Fresh-SuperValu
Genuardi’s
Giant Eagle
Giant Food
Giant Food Stores
Hannaford Food and Drug
Harris Teeter, Inc
Hornbachers-SuperValu
Hy-Vee Drug Stores
Hy-Vee Food Stores
Jewel-SuperValu
Kroger | Lucky-SuperValu
Meijer
OSCO-SuperValu
Pak’ n Save Foods
Pavilions
Price Chopper
Randalls
Roundy’s
Safeway
Shaws-SuperValu
Shop & Save-SuperValu
Shoppers-SuperValu
Star Market-SuperValu
Stop & Shop Pharmacy
Sunflower- SuperValu
Sweetbay Supermarkets
TARGET
Tom Thumb
Tops Pharmacy
Vons | If you have any questions about the forthcoming IIAS requirements, or to learn how the Flex Debit Card can benefit your employees, please contact Darla Rosenfeld. |
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Crosby’s Data Transfer Methodology
Crosby, like many organizations, is faced with the increasing challenge of keeping up with technology advancements and ensuring its systems are secure. As we continue to offer the best solutions, we will explore new ways to enhance our systems capabilities, especially with regard to network security. Below is a list of some of the data transfer options we offer to ensure data security: - Zix Secure Email: All email communications sent by Crosby employees are filtered for possible secure sending. Our filters take advantage of ZixCorp's encryption services. Every email containing Protected Health Information (as defined by HIPAA), Social Security Numbers, or other potentially confidential information is sent securely through Zix.
- Secure FTP: If files are not shared via email, they are generally shared electronically via secure FTP (File Transfer Protocol). Clients can utilize our FTP site or, we are willing to use theirs. Crosby strongly recommends FTP, rather than email, for data transmission.
- PGP Encryption: Crosby uses PGP (Pretty Good Privacy) encryption for data transmissions when allowed. Data encryption is highly recommended for all clients who perform electronic data transfers.
- MyCrosbyBenefits.com: This is our secure "participant portal" website that launched in December of 2006. It offers easy access to reimbursement account information, various forms, service questionnaires and electronic notifications (such as claim receipt or direct-deposit notices). The site also offers reimbursement account online enrollment to reduce paperwork during open enrollment. Each participant can create and maintain a user account, user name and password.
Look for more enhancements in the coming months as Crosby continues to evaluate and implement new ways to improve our service to you. |
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Upcoming Events
NEHRA 2007 Annual Conference; Crosby will be exhibiting: When: October 17-19, 2007 Where: Rhode Island Convention Center
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Making Sense of the FSA, HRA & HSA: As health care costs rise, so does the complexity of the health care system. To some, the difference between FSAs, HRAs and HSAs may be second nature, but to others, it may still be confusing. To receive an overview of the three main types of health reimbursement accounts and their key attributes, please email us here. Together or separately, these accounts can be valuable assets in developing a quality health care strategy.
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Crosby's Flex Debit Card: Many of our clients now offer the Flex Debit Card for FSAs. Our card greatly reduces paper and eliminates the need for participants to wait for reimbursement. It’s a great way to increase employee participation. For more information about our debit card program, please contact Darla Rosenfeld.
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Looking for a Team Roster?
Our organizational design utilizes a client-centered team approach to best meet your needs. We have developed three core service teams to ensure complete quality and only the highest echelon of service for our clients. These core teams include the:
- Billing Accounts Team
- Complex Accounts Team
- Reimbursement Accounts Team
Each member is cross-trained on all lines of service specific to your needs. Please email us here to request a complete roster with contact information.
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