The IRS recently released the 2015 annual deduction limits for a health savings account. These limits are typically adjusted each year for inflation.
The 2015 limits are $3,350 for an individual with self-only coverage and $6,650 for an individual with family coverage. Such deductible contributions can only be made to an HSA that is maintained in conjunction with a high-deductible health plan.
A high-deductible plan is defined as a plan with an annual deductible of $1,300 or more for self-only coverage or $2,600 or more for family coverage. The corresponding maximum out-of-pocket expenses are $6,450 and $12,900, respectively.
Health savings accounts continue to be a powerful tool in combating the rise in health costs, especially for young, healthy people. Employers should evaluate their effectiveness as part of an overall health benefits strategy.
If you have any questions, please contact Mark Flanagan of Aronson’s Specialty Tax Group at 301.231.6257.
Choosing a qualified benefit plan auditor can be a challenging process, particularly for the uninitiated. Selecting an inexperienced auditor or one with a less than stellar track record can have lasting ramifications on your plan. There are several factors to consider when evaluating potential auditors:
There are plenty of benefit plan auditors out there – over 7,000 in fact. However, don’t make the mistake of believing that just any company can effectively audit your plan. Department of Labor statistics indicate that one in three audits performed are deficient, and the DOL has made hundreds of referrals to the AICPA Ethics division for this poor work. Unfortunately, the negative exposure from a failed audit reflects on you, the plan sponsor, so it is important to select a firm you can trust. Here are some suggestions on how to find a qualified auditor:
Selecting a benefit plan auditor is an important decision that should be undertaken with great care. Stay tuned for more information coming soon on additional considerations. To learn more about Aronson’s Employee Benefit Plan Services Group, please contact partner Kate Petrillo at 301.231.6200 or by email via firstname.lastname@example.org.
Is your employee benefit plan participant count causing you to become dangerously close to needing an audit? Have you just received your compliance testing results from your record-keeper and realized that your benefit plan requires an audit this year? Your first response may be to panic (because who doesn’t panic at the word “audit”?). Then you find out that your plan will be subject to a limited-scope audit rather than a full-scope audit. Whew! Luckily, your custodian provides certified trust statements, eliminating the need for the auditor to perform investment valuation and investment purchase and sales testing. So, what else could the auditors really test in a benefit plan? The reality may surprise you!
While a limited-scope audit may scale back the scope of the audit and reduce the amount of testing to be performed during fieldwork, the audit procedures are not reduced as significantly as you might expect. A limited-scope audit still requires a substantial amount of testing to be performed. Fieldwork will consist of an in-charge auditor and one or two staff accountants who will test contributions, distributions, notes receivable from participants and expenses paid from the plan. These tests of plan transactions are outlined in the AICPA Audit & Accounting Guide for Employee Benefit Plans and will be performed regardless of the scope of the audit.
The only procedures that are reduced in a limited scope audit are the testing of investment valuation, investment income and investment activity. Not performing this testing only saves a few hours, especially when the investments held are readily marketable. Also, even though investments might not be tested in a limited-scope audit, the auditor still needs to review and evaluate the extensive footnote disclosures on investments that are required in the financial statements. Also be aware that the audit file and the financial statements are all subject to the same amount of first partner and quality control review regardless of whether the audit is a full or limited-scope audit.
While a limited-scope audit does reduce the overall time and procedures for a benefit plan audit, it may not reduce them as much as a plan sponsor would expect. Be aware that a limited scope audit is a real audit, and plan sponsors should expect their personnel, payroll and plan records to be scrutinized.
For more information on the difference between full scope and limited scope audits and how you can be better prepared for either scenario, contact Aronson’s Employee Benefit Plan Services Group at 301.231.6200.
The Internal Revenue Service has announced the 2014 cost-of-living adjustments for various limits affecting employee benefit plans. The more common limits are detailed below for 2013 and 2014.
If you should any questions about how these limits apply to you please contact Mark Flanagan of Aronson’s Employee Benefit Services Group at 301.231.6257.