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  • Important News for PacificSource Administrators Plans

    Below are several important notices that may require your action. Please take a moment to read these updates. If you have any questions, feel free to contact us.

    New Rules for Mid-Year Election Changes under Cafeteria Plans

    The IRS has expanded the situations in which individuals may change their health coverage elections under a Section 125 (cafeteria) plan. While the current regulations will be revised, the guidance is effective immediately.

    Read the IRS notice (2014-55) >  

    Please note that plans are not required to adopt the new election change rules. If adopted, however, plan documents must be amended to include the new options.

    Read our summary >  

    Correcting Undocumented Debit Card Transactions

    Earlier this year, the IRS released a Chief Counsel Advice (CCA) memorandum that provided further guidance on how to correct health FSA payments for expenses that are not properly substantiated or later determined to be ineligible for reimbursement (improper payments).

    We've created an overview of the memo, which explains actions you may need to take, as well as steps PacificSource Administrators is taking to ensure that your plan remains in compliance with regulations.

    Employer-Funded Health FSAs Must Modify the Employer Contributions

    As a courtesy to our clients, we are sharing additional ACA guidance on certain employer-funded healthcare arrangements, including health flexible spending arrangements (“health FSAs”). One of the more subtle aspects of that guidance was the fact certain health FSAs that are “stand-alone” or significantly funded by employer contributions must either make changes to ensure they are offering an excepted benefit or cease to exist. Plan sponsors face the risk of excise taxes of up to $100 per day, per participant, if modifications are not implemented.

    In addition to the above, plan sponsors must designate their plan to adopt either a “cash-out” or “no cash-out” provision to the employer contributions. The summary linked below explains the impact to each option.

    Read full notice >

    Increase to FSA Annual Maximum (up to $2,550)

    The IRS recently increased the maximum amount that employees may contribute to their healthcare FSA through salary reductions. The limit has increased from $2,500 to $2,550 effective for plan years beginning on or after January 1, 2015.

    If you would like to adopt the increased maximum for your plan in 2015, please contact your PacificSource Administrators Client Service Representative as soon as possible. If you do not wish to make this change, there is no action you need to take.

    Read the IRS revenue procedure (2014-61) >  

    No Change to Annual Maximums on Commuter/Transit Plans (IRS 2014-61)

    For the tax year 2015 (effective January 1, 2015), the maximum pretax contribution employees can make to cover qualified transit and parking expenses is not changing. The limit for parking will remain at $250, and the limit for transit will remain at $130.

    Read the IRS revenue procedure (2014-61) >  

    Thank You!

    We value your business and hope this information was helpful. If you have questions, you're always welcome to contact us by phone or email. 

    Email: psacustomerservice@pacificsource.com  
    Phone: (541) 485-7488 or (800) 422-7038