Seasonal cleaning is never a bad idea for homeowners. Similarly, companies are wise to do some tidying up after open enrollment to ensure employee benefits are being administered appropriately. A post-open-enrollment checkup of benefits plans can fix minor issues before they become big problems, and the process can also uncover areas in need of improvement.
With this in mind, here are some areas human resources professionals might want to check out after open enrollment:
Check your data on employees’ benefits election with insurance carriers. Does your data match the carriers’ data? Mistakes can happen, and it’s best to catch them now.
Make sure employees’ 401(k) contributions are correct. Some employees might not change their contributions from year-to-year, but others might be increasing their savings as their income rises. Every little bit helps towards retirement, which is a goal not easily attained these days.
Check on age band data for supplemental life insurance for imputed income. Per IRS guidance, employees who receive more than $50,000 in life insurance have to declare imputed income on the excess value of the policy above $50,000. This is a taxable benefit reflected on an employee’s W-2, and companies collect this data. The older the taxpayer, the higher the tax rate. The rate increases every five years — hence the term “age band” – and the cost accelerates with age. For instance, a taxpayer with more than $50,000 of life insurance will be taxed at about a 53 percent higher rate at age 60 than at age 59.
For more tips on checking employee records after open enrollment, or to discuss any other employee benefits solutions, contact a Plexus professional at 847.307.6100 (Chicago) or 972-770-5010 (Dallas/Oklahoma), or feel free to contact us via the Web.
References
Publication 15-B: Employer’s Tax Guide to Fringe Benefits. Internal Revenue Service, 2016