Many start-up companies reward their employees with restricted stock subject to time-based (or performance-based) vesting restrictions. What we sometimes find is that the start-up company and the employee do not fully appreciate the tax implications of a restricted stock award and the potential benefits of a timely filed Section 83(b) election. Section 83 of the […]
GG
Earlier this year, I blogged about how the IRS modified the health flexible spending account (“health FSA”) “use-it-or-lose-it” rule to allow carryovers of up to $500 to subsequent plan years. This rule change caused some confusion. Employers were asking, “what happens to an employee’s eligibility to contribute to a health savings account (“HSA”) if they […]
KH
Today, the IRS issued Notice 2014-19, which contains long awaited guidance on the application of the Supreme Court’s decision in United States v. Windsor. The Windsor case found section 3 of the Defense of Marriage Act (DOMA) unconstitutional. Sponsors of qualified retirement plans have been awaiting this guidance to determine how to apply the Windsor […]
AM
As explained in my Checklist for Employers, a large employer will have to pay a subsection (a) penalty for any month if it does not offer “minimum essential coverage” (“MEC”) to substantially all (i.e., 70% for 2015 and 95% for future years) of its full-time employees and their dependents if one or more full-time employees […]
NC
Most employee benefit plans are subject to nondiscrimination rules. In order to prevent employers from breaking apart companies in order to avoid these nondiscrimination rules, most employee benefit plans, in performing nondiscrimination testing, must take into account related businesses (i.e., controlled groups and affiliated service groups). I’ve been blogging recently about the large employer shared […]
NC
The IRS recently released final regulations (“Final Regulations”) clarifying the conditions that constitute a substantial risk of forfeiture for purposes of Section 83 of the Internal Revenue Code. As some of you know, Section 83 generally provides that property transferred in connection with the performance of services will be not be taxed until the date […]
GG
Last fall the IRS and DOL issued nearly identical guidance, IRS Notice 2013-54 and DOL Technical Release 2013-03, explaining how certain Health Care Reform Act rules apply to health reimbursement arrangements (“HRAs”). Notice 2013-54 is not good news for most HRAs, also called medical expense reimbursement plans (“MERPs”). Executive physical plans are often structured as […]
NC
Since 2012, covered service providers (“CSPs”) such as recordkeepers and investment advisors have had to provide annual service and fee disclosures to plan fiduciaries under Section 408(b)(2) of ERISA. Plan fiduciaries cannot remain idle after receiving these disclosures — review of the disclosures is a fiduciary duty. The Department of Labor (“DOL”) requires fiduciaries to […]
KH
As some of you know, Section 409A of the Code contains a very helpful exception for “short-term deferrals.” More specifically, Section 409A provides that a payment will not be considered “nonqualified deferred compensation” if the employer makes payment to the employee no later than the 15th day of the third month following the end of […]
GG
Health care reform is confusing. There are so many new terms and concepts. One concept that has been getting a lot of attention lately is MEC. MEC stands for “minimum essential coverage” and is a fancy name for basic health coverage. MEC is important for two main reasons — First, starting in 2014, individuals who don’t […]
NC