Ask anyone who works in human resources about the signs of autumn - chances are, leaf colors and pumpkin spice beverages aren't at the top of the list. In the HR world, open enrollment, preparing form 1095-C and setting up next year’s payroll schedule are really what signal that fall is here. There’s paperwork to file (or e-file), employee data to verify and did we mention the deadlines? It can make for a hectic time with lots of projects to keep track of. Read on to stay organized and manage the chaos.
Many deadlines fall right at the beginning of the new year, making planning more difficult if you take time off during the holidays. It just makes sense that the more you can prepare or complete now, the more easily you’ll be able to meet deadlines with breathing room. You’ll also be better prepared to deal with any changes that come your way in 2018. Our handy checklist of year-end HR tasks will help you stay organized along the way.
In the checklist, we’ve grouped tasks into four major categories: Benefits, payroll, compliance and workforce management/HR housekeeping. In this blog, we'll expand on a few tasks.
Affordable Care Act Compliance
Applicable Large Employers (ALEs) (those with 50 or more full time employees) are required by the Affordable Care Act (ACA) to provide employees with IRS form 1095-C no later than January 31, 2018. You’ll also need to file 1095-C and transmittal form 1094-C with the IRS by the end of February (for paper forms) or the end of March (for electronic filings). Smaller employers may be required to file forms 1095-B and 1094-B instead.
The paperwork may be pretty straightforward, but don’t forget to look ahead to the new affordability contribution percentage. “For plan years beginning in 2018, employer-sponsored coverage will be considered affordable if an employee's required contribution for self-only coverage for the least-expensive plan option that meets ACA requirements does not exceed 9.56 percent of the employee's household income for the year (down from 9.69 percent in 2017),” says the Society for Human Resource Management (SHRM). This change could mean that you need to reduce the amount your employees contribute for health care benefits, so now is the time to review 2018 premiums and plan accordingly.
Give Employees a Heads-Up
Now is also the time to inform employees about changes to company policies and benefits offerings. Notifying them about changes that take effect after the first of the year can ease the transition. Employees are responsible for tracking annual 401(k) contribution totals, so they'll appreciate knowing if contribution limits to retirement programs like 401(k)s and IRAs increased. (And some did: In 2018, 401(k) contributions are capped at $18,500 plus a $6,000 catch-up limit for workers over 50; IRA contribution limits are $5,500).
You should also review Health Flexible Spending Accounts (FSA) and Health Savings Accounts (HSA) with employees. If you offer both, make sure employees understand the differences between them. In 2018, FSAs have a cap of $2,650 with either a $500 maximum rollover or a grace period of two months and 15 days for unused funds starting immediately the next year. HSAs are capped at $3,450 for individuals and $6,900 for families.
Comply with ERISA Disability Benefit Changes
In 2018, Employee Retirement Income Security Act (ERISA) requirement changes may affect your insurance benefit offerings. As Human Resources Today explains, “beginning in 2010, the Affordable Care Act (ACA) revised the requirements that apply to claims and appeals of group health insurance benefits. In December 2016, the U.S. Department of Labor (DOL) published final regulations that revise the requirements for disability benefits … those new rules, which became final in January 2017, apply to all claims for disability benefits filed on or after January 1, 2018.” The bottom line is that a benefits denial must now include additional information about why the request was denied and how the decision was made. Therefore, you need to review your plan(s) to know which parts require a determination of disability for claim approval.
Don’t Neglect Record-keeping
Record-keeping is important for documenting policies and procedures, employee data, tracking finances and reporting information to the government. The records you keep can also serve as evidence in legal matters. Your HR department should have a retention schedule to make it clear which documents to keep, how long to keep them and how to properly dispose of them when no longer needed. Of course, the most detailed retention policy in the world is useless if you don’t keep up with it. As 2017 winds down, spend some time culling files and securing electronic data.
Some documents fall under federal requirements for retention, but in other cases it’s less clear how long to keep things. Do some searching for guidance on retention for these situations. If you can’t find any information, “it is best to maintain the records for three years. You must, however, document your search effort and the assumptions you used to set the three-year period. Then, if you missed a legal requirement during your search, you have documentation to show the judge or regulatory agency that your organization had made a good-faith effort to comply with the law,” suggests HR Specialist; but, “retain records longer if litigation, a government investigation or an audit seems likely. In the event that a legal action does transpire, immediately cease all disposal activities.” All of this doesn’t mean you should apply a “just in case” mentality to every single record – use your judgment.
The end of the year is a busy time, but if you keep our list of tasks at hand you’ll be prepared for all the filing, reporting and updating that’s just around the corner. If you have questions about these or other year-end HR tasks, contact Horizon Payroll Solutions today!