This season brings a dynamic mix of anticipation and high-stakes decision-making. With holidays approaching and group health plan deadlines on the horizon, it’s more important than ever to keep your strategy sharp and your priorities clear.
It’s easy to get absorbed in the open enrollment announcements and performance reviews, but let’s be clear: the intricate, non-negotiable compliance tasks like ACA reporting, retirement plan integrity, and non-discrimination testing are the foundation of a successful new year.
Precision in benefits compliance protects your bottom line and reinforces employee trust in their health and retirement benefits. Let’s focus on the key priorities that position you and your workforce for success in the year ahead.
What Should I Focus On for Year-End Compliance?
Year-end is the ultimate moment for executing key compliance obligations. Mistakes or missed deadlines here translate directly into audit risk and significant financial penalties. We are here to guide your focus to the three areas demanding immediate, proactive attention:
1. Affordable Care Act (ACA) Reporting
- The Final Push: For Applicable Large Employers (ALEs), the task is simple and non-negotiable: generate and distribute Forms 1095-C to employees and complete accurate, timely filing of Forms 1094-C and 1095-C with the IRS.
- The Data Confidence Audit: Before you file, make sure your data is correct. Are your full-time employee counts validated? Are your offer of coverage codes and affordability calculations 100% accurate? Proactive validation is your shield against potential errors.
We are seeing a rise in IRS Letter 226-J (proposed penalties), often due to data discrepancies. A careful review is your most powerful defense strategy.
2. Retirement Plan Compliance (401(k), etc.)
- Non-Discrimination Testing (NDT): This is the ultimate integrity check for your 401(k) plan. Execute your annual testing (ADP/ACP and Top-Heavy tests) to confidently demonstrate that your plan is fair and balanced, ensuring all employees benefit equitably.
- Embrace Legislative Changes: Confirm your systems are properly managing contribution limits, especially catch-up contributions and any required changes stemming from recent legislation.
- Plan Documents & Filings: Review your Form 5500 for accuracy and prepare and adopt any required plan document amendments well in advance of their deadlines.
3. Health & Welfare Plan Updates
- Documents: Take this time to review and update all your core benefits documents, including your Summary Plan Descriptions (SPDs). They must reflect every change implemented during Open Enrollment.
- HIPAA & Privacy: Conduct a final check on your HIPAA protocols. Be thorough when validating Business Associate Agreements (BAAs) with all vendors. You are protecting your organization’s reputation and your employees’ most sensitive data.
- Multi-State Compliance: If your employees are in multiple states, verify that all benefits are fully aligned with every local law that took effect on January 1st.
Year-End Compliance Checklist
Use this quick reference to get started:
- ✓ Validate full-time employee counts for ACA reporting
- ✓ Prepare and distribute Forms 1095-C
- ✓ File Forms 1094-C and 1095-C with IRS
- ✓ Complete 401(k) non-discrimination testing
- ✓ Update retirement plan for SECURE 2.0 provisions
- ✓ Review and file Form 5500 for retirement plans
- ✓ Update Summary Plan Descriptions for all benefit changes
- ✓ Verify all HIPAA Business Associate Agreements are current
- ✓ Communicate FSA/HSA deadlines and limits to employees
- ✓ Review multi-state compliance requirements
- ✓ Adopt necessary plan document amendments
Transform Stress into Certainty for the New Year
Year-end can feel overwhelming, with daily operations, holiday schedules, and complex compliance tasks all happening at once. But consider that compliance is not just a burden but a vital part of your organization’s stability. Even a small oversight now can quickly turn into a financial or administrative crisis in the new year. Protect your organization’s health and your peace of mind by handling every detail carefully.
If this checklist seems daunting, we are here to help. The potential cost of an unaddressed regulatory error outweighs the value of investing in a dedicated, professional partnership.
Let Workforce Solutions take the stress out of HR. We manage your employee benefits and policies with precision, so your rewards program delivers maximum value, and your employees stay satisfied. With us handling the details, you can relax knowing compliance and benefits are fully covered.