MidAmerica Administrative & Retirement Solutions, Inc. specializes in providing different types of retirement plans to government employers throughout the country. We offer several cost saving programs, such as..
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The Internal Revenue Service has issued new 403(b) regulations that require significant additional oversight by employers, including plan documentation, limits testing, and oversight of hardships, loans and eligibility.
As a result, human resources departments have been saddled with a huge administrative burden, when the new regulations become fully effective January 1, 2009.
The Employer Sponsored 403(b) Plan is designed to provide a tax-advantaged savings vehicle to pay for retiree health care expenses. Other payments may be contributed to the Plan based on years of service, severance and other retirement incentives.
In 1990, the Omnibus Budget Reconciliation Act was passed. Government entities who exercised their Social Security Section 218 exclusion allowance were provided the option of giving their part-time, temporary and seasonal employees a meaningful, defined contribution retirement alternative to Social Security.
MidAmerica Administrative Solutions works in conjunction with Keenan & Associates in California, to market the Accumulation Program for Part-time and Limited-service Employees (APPLE Plan) to government employers.
Governmental Employers provide substantial post-employment benefits to their Employees. These benefits frequently include a lump sum payment at retirement for unused sick and vacation leave time. Additionally, some Employers provide post-employment health care benefits. When an Employee retires, these benefits are usually paid out of the Employer’s current cash flow. Generally, governmental Employers have not set funds aside and do not carry these post-employment benefit liabilities on their balance sheet.
When Government Employees retire, they are frequently entitled to receive “Special Pay”. Special Pay can take the form of accumulated terminal leave sick pay, annual leave, or some other form of incentive pay. When this money is paid to the Retiree, both the Retiree and Employer must pay the 7.65% FICA tax. Additionally, the Retiree has no choice but to pay income taxes on the money in the year it is received.
Is Your Health Plan in Compliance with the Affordable Care Act (ACA)? With the ACA’s 2014 effective date rapidly approaching, many employers are concerned about whether or not their existing health plan will meet the new regulations.
- Does my plan follow the new rules?
- What changes do I need to make and when?
- If I don’t do anything, what penalties may we face?
Now there is an affordable way to find out if your health plan meets the new 2014 regulations.
Flexible Spending Accounts (FSA), oftentimes called Section 125 Cafeteria plans, were formally created by Internal Revenue Code 125 of the Revenue Act of 1978. The Act allowed Employees to set aside money on a pre-tax basis to pay for certain expenses. Expenses eligible for reimbursement include required Employee contributions to an Employer sponsored health care plan, dependent care expenses and any health care expenses not covered by the Employer health care plan. Examples of these expenses include co-payments, deductibles, prescription drug purchases, eyeglasses and dental expenses or any other eligible uncovered medical expenses. Money deposited in FSAs must be used in the year it is deposited or the remaining balance is forfeited.
Many governmental Employers continue to provide health care benefits to retiring Employees. These payments can continue for many years, are sometimes taxable to the Employees, and create a significant administrative burden to the Employer.
Take a moment to review the programs we offer, and contact us to find out how you can save valuable tax dollars. If you are not sure which plan is right for you, simply contact us.