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New Jersey Employers with Twenty or More Employees Must Offer a Pre-Tax Transportation Fringe Benefit

New Jersey enacted Senate Bill No. 1567 (the “Senate Bill”), which requires every employer in New Jersey that employs at least 20 persons, excluding employees covered by a collective bargaining agreement, to offer a pre-tax transportation fringe benefit to all of its employees in New Jersey, effective as of March 1, 2020. A pre-tax transportation fringe benefit allows an employee to set aside wages on a pre-tax basis to purchase eligible transportation services, such as transit passes and commuter highway vehicle travel, as consistent with Section 132(f)(1) of the Internal Revenue Code. An employer that is found to be in violation of this requirement is liable for a civil penalty ranging from $100 to $250 for the first violation. An employer has 90 days to correct the violation before such penalty is imposed. After 90 days, a $250 penalty will be imposed for each additional 30-day period during which an… Continue Reading

Agencies Update Group Health Plan Required Disclosure Documents

Federal agencies recently issued updated versions of certain documents that are required to be disclosed to individuals under applicable employer-sponsored group health plans. A set of FAQs regarding the Affordable Care Act (“ACA”) was issued by the federal Departments of Labor (“DOL”), Health and Human Services (“HHS”), and Treasury (collectively, the “Departments”), which describe recent changes made by the Departments to the “summary of benefits and coverage” template under the ACA (“SBC”). Among other minor changes to the SBC, certain verbiage on the SBC and the associated uniform glossary were revised to reflect the prior elimination, as of January 1, 2019, of the tax penalty related to an individual’s failure to comply with the so-called “individual mandate” under the ACA. The FAQs also provide additional guidance regarding the updated SBC coverage examples calculator that was released by HHS late last year. The revised SBC and SBC coverage examples calculator each… Continue Reading

IRS Emphasizes Requirement to Retain Executed Copies of Plan Documents

The IRS recently released Chief Counsel Memorandum 2019-002 (the “CCM”), in which it emphasized an employer’s obligation to timely sign and retain a copy of its qualified plan document pursuant to Section 6001 of the Internal Revenue Code or risk plan disqualification. The IRS issued the CCM in response to the Tax Court’s holding in Van Lanes Recreation Center v. Commissioner, TC Memo 2018-92. In Van Lanes, the Tax Court held that the IRS had abused its discretion by disqualifying a plan when the employer failed to produce a signed copy of the restated plan document. The Tax Court determined that there was both credible evidence that the restated plan had been adopted and credible explanations for the absence of the signed documents including flooding of the employer’s premises and seizure of its accountant’s computers. Plan documents must be signed by the plan sponsor or someone authorized to act on… Continue Reading

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