It comes as no surprise that many Americans are concerned about retirement. Diligently putting money into 401(k) or any other form of retirement savings account, many still miss one key ingredient that could offer not only tax benefits, but sustainable growth well into retirement.
Open enrollment is only a couple months away, and planning may be beginning now for 2018. As companies look to contain health care costs, more and more are considering a high deductible health plan (HDHP) with a health savings account (HSA) in addition to a traditional health plan or possibly in place of a traditional plan. Either case requires a new level of education and support to get everyone’s understanding of the value of this type of product.
The IRS Increases Medical FSA Limit to $2,600:
The IRS announced today (10/25/2016) that the Medical FSA and Limited Purpose FSA cap will increase to $2,600 (an increase $50) for plan years beginning on or after January 1st, 2017. If your plan document was created by 24HourFlex the language will reference the maximum amount permitted, in which case no change is required.
Keep reading below for commonly asked questions related to this update.
Your employer may soon have to cut back on the healthcare benefits provided to you to avoid an onerous 40% federal tax called the “Cadillac Tax”. Starting in 2018, companies that are too generous to their employees by providing attractive healthcare insurance will be hit with a huge tax. The Kaiser Family Foundation, a respected, nonprofit research group, estimates that one in four companies will be affected by this tax, and to avoid it, will have to cut back on their healthcare benefits.
To add insult to injury, the law says that starting in 2018, any pretax amount YOU put into your own Medical Flexible Spending Account or Health Savings Account has to be counted as employer-provided healthcare benefits and could trigger this 40% Cadillac tax. Yes, you read that correctly. Such contributions count as EMPLOYER contributions when calculating this tax, which means that starting in 2018 when you make these pretax payroll contributions to your own Medical Flexible Spending Account or your own Health Savings Account (HSA), your employer may have to cut back even further on the healthcare benefits provided to you if this onerous 40% tax is to be avoided.
As our Congressmen and Senators are becoming aware of the unfair nature of this tax, a bipartisan coalition is forming to change the law. This provision of Healthcare reform is so bad that even Labor Unions and Republicans have joined together to amend this portion of the Act. Politics makes for strange bedfellows at times.
Isn’t 2018 a long way off? Why do I care now?
In anticipation of this upcoming “Cadillac” tax, companies are already cutting back on their healthcare benefit packages by only offering healthcare insurance with larger deductibles, knowing that big changes to benefits packages cannot be done in just one year.
What Can You Do?
24HourFlex has joined forces with ECFC, the Employer’s Council for Flexible Compensation, to change the law. Ideally, we would like the “Cadillac” Tax provisions repealed entirely. At this time that may not be realistic. However, at a minimum we want the law changed so that YOUR pretax contributions to YOUR Medical Flexible Spending Account or YOUR Health Savings Account are NOT counted as EMPLOYER contributions when calculating this tax.
Hidden away and buried deep within the recently-passed and signed federal budget bill is a provision authorizing robocalls to cell phones. This bad provision got pushed through Congress in a rush to avoid a government shutdown.
The percentage of individuals in Europe that donate their organs upon their death varies greatly from one European country to the next. For example, only twelve percent of the German citizens choose to donate their organs but if one steps across the border and enters Austria, close to one hundred percent (99.98%) donate their organs. In Denmark only 4.25% donate their organs, but if one leaves Copenhagen and drives across the Oresund Bridge, down the two-mile long undersea Drogden Tunnel and into Sweden, 86% of the population donate their organs. Why these strange differences amongst very similar demographics?
Tags: Retirement Planning
Yesterday the IRS announced annual inflation adjustments for forty tax provisions for 2015. Here is a summary of the changes that affect Cafeteria and Flexible Spending accounts
There are many different forms of qualified retirement plans--among them, 401(k), profit sharing,
defined benefit, ESOPs, 403(b), SIMPLE IRAs, and SIMPLE 401(k) plans. One of the unique requirements of SIMPLE IRAs and SIMPLE 401(k) plans is that they must be the sole, exclusive plan of the employer for the entire calendar year. In other words, an employer sponsoring a SIMPLE IRA or SIMPLE 401(k) cannot, in the same calendar year, also sponsor a regular 401(k) plan or any other qualified retirement plan.