Newsletter from Integrated Benefit Solutions
Summary Annual Reports Due
Health plans with 100 or
more plan participants at the beginning of a plan year are
generally required to furnish a Summary Annual Report (SAR) to
each health plan participant within 9 months after the end
of a plan year. As a result, the deadline for most calendar year
plans to satisfy the SAR requirement for plan year 2017 is September
What Must be in a SAR?
A SAR serves as a narrative summary of the group health plan's
Form 5500 annual report. In general, a SAR must provide the
following information on the plan year (among other things):
- Name of the insurer
- Total premiums paid
- Value of plan assets at the beginning
and end of the plan year
- Amount of plan expenses
Is a Model Notice Available?
While the U.S. Department of Labor has not released a model SAR, federal
regulations provide model language. To review this model
here and see the section titled "Form for Summary
Annual Report Relating to Welfare Plans."
Check out our Benefits Notices
Calendar section for additional information on federal
Medical Loss Ratio Rebates Coming Soon to Plan
The Affordable Care Act's
medical loss ratio (MLR) rules require group health insurance
issuers to provide rebates if their MLR—the percentage of
health insurance premiums spent on health care and activities to
improve health care quality—falls short of the applicable
standard during a reporting year. Each year's rebates must be
issued to plan sponsors by September 30 of the following year.
As a result, plan sponsors should be looking for these rebates to
arrive in the coming weeks.
rules provide that issuers must pay any rebates owed
to persons covered under a group health plan to the policyholder,
who is then responsible for distributing the rebate to
eligible plan enrollees. In general, there are several ways
rebates may be distributed by plan sponsors to plan enrollees,
- A rebate check in the mail;
- A lump-sum reimbursement to the same
account that was used to pay the premium if it was paid by
credit card or debit card; or
- A direct reduction in future premiums.
In addition to the above methods, employers may
also apply the rebate in a way that benefits employees. However,
decisions on how to apply or expend the plan's portion of a
rebate are subject to the general standards
of fiduciary conduct under the federal Employee
Retirement Income Security Act (ERISA).
Visit our section on Medical Loss Ratio
(MLR) Rebates & Employer Responsibilities to learn
Top 5 New Hire Forms
An employee's first day on
the job can be very stressful for both the employee and employer.
While trying to set up the employee with his or her parking pass,
email account, and other necessities, employers should also
remember that completing the following forms is just as
- Form I-9: Under federal
law, employers are required to verify the identity and
employment authorization of each person they hire by
completing and retaining Form I-9. Newly hired employees
must complete and sign Section 1 of Form I-9 no later
than the first day of employment. Click
here to download Form I-9.
- Federal Form W-4: An employee must
complete federal Form W-4 in order for the employer to
withhold the correct federal income tax from the employee's
pay. Click here to download
federal Form W-4.
- State Form W-4: In states with a
state income tax, an employee must complete a state Form W-4
or its equivalent in order for the employer to withhold the
correct state income tax from the employee's pay. To obtain
a state Form W-4, contact your state's taxation
- Basic Employment
Employers should keep certain basic information about each
of their employees on file, including their addresses, phone
numbers, and emergency contacts. Click here to download
a Basic Employment Information Sheet.
- Direct Deposit
It is now easier than ever for an employer to directly
deposit an employee's paycheck into his or her bank account.
Such deposits, however, must be specifically authorized by
the employee. Click here to download
a Direct Deposit Authorization Form.
Our Recruitment &
Hiring section features more great hiring tips.
How Summer Hires May Impact Your ALE Status
Employers that hired seasonal
workers this summer are reminded that there is a seasonal
worker exception when measuring workforce size to determine
whether they are an applicable large employer (ALE) subject to
the Affordable Care Act's employer shared responsibility
("pay or play") provisions.
Seasonal Worker Exception
The pay or play provisions generally require ALEs—generally those
with at least 50 full-time employees, including full-time equivalent
employees (FTEs)—to offer affordable health insurance that
provides a minimum level of coverage to full-time employees and
their dependents in order to avoid paying a tax. However, if an
employer's workforce exceeds 50 full-time employees (including
FTEs) for 120 days or less (or 4 calendar months) during the
preceding calendar year, and the employees in excess of 50
who were employed during that period were seasonal workers, the
employer is not considered an ALE for the current calendar
year. A seasonal worker for this purpose is an employee who
performs labor or services on a seasonal basis. For example,
retail workers employed exclusively during holiday seasons are
Check out our Pay
or Play section for additional details.
Retain Employees Through
With the daily demands of keeping
a workplace productive and profitable, many managers may overlook
one simple perk that has been proven to boost employee retention:
professional training. Learn how to use training as a tool to
retain your top employees by watching the video below.
For more training tips, check out our HR Training section.