CEBS Tax & Legal Considerations for Benefits Flashcards
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Read the first 6 CEBS Tax & Legal Considerations for Benefits flashcards as text
Under the ACA, what is the employer shared responsibility ('pay or play') rule threshold for applicable large employers (ALEs)?
Answer: 50 or more full-time equivalent employees
Employers with 50 or more full-time equivalent employees are considered ALEs and must offer affordable, minimum-value health coverage or potentially face excise tax penalties.
Which doctrine allows the IRS to disallow deductions for compensation that is deemed unreasonable for closely-held or family-controlled businesses?
Answer: Reasonable compensation doctrine
The IRS reasonable compensation doctrine requires that compensation, including benefits, must be reasonable in amount for services actually rendered to be deductible.
A Flexible Spending Account (FSA) under IRC Section 125 is subject to the 'use-it-or-lose-it' rule. What is the maximum carryover amount allowed under IRS guidance (as of recent updates)?
Answer: $610
The IRS allows employers to permit FSA participants to carry over up to $610 (indexed for inflation) of unused health FSA funds into the following plan year.
Which ERISA requirement mandates that pension plan participants must become entitled to their accrued benefits within specified time limits?
Answer: Vesting schedule requirement
ERISA vesting schedules require that employees become non-forfeitably entitled to employer contributions within defined cliff or graded timelines.
What is 'wrap-around' plan documentation in the context of ERISA compliance?
Answer: A single ERISA plan document that incorporates multiple insured benefit programs
A wrap document is a single ERISA plan document and SPD that encompasses multiple insured benefit programs (medical, dental, vision) under one compliant plan structure.
Under HIPAA, what is the maximum waiting period an employer-sponsored group health plan may impose before a new enrollee's coverage becomes effective under the ACA?
Answer: 90 days
The ACA amended HIPAA to prohibit group health plans from imposing a waiting period exceeding 90 days for otherwise eligible employees and dependents.
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