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FlexTalk Newsletters | Other Links |
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FlexTalk Spring 1999 In this Issue:
Welcome once again to FlexTalk, the newsletter from Manley Services. In this issue you’ll find timely and useful information designed to help your flex plan run smoothly. The year 2000 is on everyone’s mind. We’ll give you a brief summary of the Y2K problem, and our suggestions about it; we’ll let you know about a salary reduction plan you can offer on your own, with no 5500 or discrimination tests to complicate it; and we’ll update you on information presented in an earlier issue. We hope you find this issue useful, and invite you to keep reading. Y2K. The Millennium Bug. The Year 2000 Problem. Lately these phrases are in all the headlines and on everyone’s lips, often followed by predictions of doom and gloom. Some pay little attention to the message. Some are very worried. Others think it’s a lot of hype. What is the millennium bug, and how will it affect your flex plan. Simply put, Y2K is a problem where computer programs are unable to read dates later than 1999. When the situation first became apparent, programmers investigated, and many became very concerned. Predictions of disaster were at first widespread and dire. Everything from banking to hospitals to groceries and utilities depends upon computers. If the Y2K bug was not fixed, popular wisdom told us, the consequences would be catastrophic. Along came books, and seminars, each offering more devastating predictions than the last, and each offering ways to prepare for a price. The good news? Since the warnings first sounded, government agencies and corporations alike have formed Y2K task forces to find and fix problems in their systems. Many claim that their systems will be tested and ready in mid-summer of this year. The news is so encouraging, in fact, that some of the original doomsday predictors have backed off a bit from their original positions. In a recent article in the Los Angeles Times, writer Ashley Dunn reports that the alarms have begun to subside. She quotes Y2K experts saying that the problems are not as widespread as originally thought, and that companies and government agencies, now aware of the potential problems, have taken positive steps to improve the situation. Even with this good news, sponsors of employee benefit plans should be concerned. Addressing Y2K issues is a fiduciary duty under ERISA, according to the Department of Labor, and failure to do so can result in serious penalties. Sponsors must review their plan’s operations, in an attempt to spot any problems. Ask yourself: Will flex plan elections work properly? Will transactions between our plan and our service providers work? Is our health plan’s claims processing system ready? Will the processing of any plans underlying the flex plan, ie healthcare FSA, dependent care FSA, life and disability insurance be affected? These questions must be answered immediately, if they aren’t already. If you have concerns about the readiness of any of your systems, we urge you to act now. Call a computer consultant to help you, and develop a contingency plan. You can depend on Manley Services to uphold our end. We’ve been assessing our situation for some time. Where we have discovered problems, we are replacing equipment and software. We have the assurance of the manufacturers of our computer products that they are compliant. While we can’t specifically warrant products from another company, we believe the information to be accurate. We will be ready, says Bonni Strong, our Y2K Project Lead. If you have concerns or questions, we invite you to call. Bonni can be reached at 541-485-7488 extension 105. Seems like the world keeps getting busier, and time becomes more and more precious. To help your employees save some of that precious time, we’re working on a Direct Deposit system. When completed, employees can choose to have us deposit their reimbursements directly into their bank accounts. No more waiting for mail! If you’re interested in this new service, let us know. We’re taking names now, and will keep you posted on our progress. The process will be simple. Employees will fill out a form, providing permission, account numbers, etc. That’s all there is to it! Because this is an individual option, one or all of your employees can use the service. Simple, clear, rewarding Life gets more complicated all the time. Just driving to and from work can be a hassle. If your company is located in the heart of a city, parking and traffic problems affect you personally, and may even affect your ability to hire. Some potential employees may be reluctant to accept a job, simply because they don’t want to deal with the commute and the parking hassles. Enter the salary reduction transportation benefit plan. it can ease the stress of the daily commute for employees, save them some money, and reward them for a job well done. All of this, with a plan that is simple to administer and relatively free from government regulation. Sound to good to be true? Read on. Thanks to the Internal Revenue Code section 132, companies can provide transportation benefits at reduced cost or no cost to employees. And subject to certain limits, the value of the benefit does not count as income, saving employees and the company money. Employers can offer the benefits to any employee or group of employees, at the company’s discretion. That means no discrimination testing. And there is no 5500 to file at year end. Three Ways to Get There Paid Parking If the company owns a parking lot, a few close spaces can be reserved to reward employee performance (as in Employee of the Month awards), or for employee carpools. If the company does not own a facility, paid parking in a lot nearby can be used in the same way. Because close parking spaces can be rare, this is a highly prized benefit in a city. The employer can pay up to $175 per month for an employee’s parking without the money counting as income. Employers save on payroll taxes, and may deduct the cost of operating or subsidizing the parking facility. Public Transportation Passes To encourage the use of public transportation, employers can provide monthly passes to employees. The value of the pass is not counted as employee income, up to $65 per month. This can be a valuable benefit to the employee, and may help the company meet locally imposed regulations designed to reduce auto emissions. Vanpool Benefits A vanpool is an employer-sponsored vehicle that drives employees to work and back home again. There are vanpool contractors, or the company may provide a van for employee use. Companies can deduct costs associated with vanpools as business expenses. The dollar limit of tax-free income to employees is the same as for public transportation passes, $65 per month. Employers can provide parking spaces for the vans, making the vanpool a more attractive benefit. With all three kinds of transportation benefits, employers are free to choose who will benefit. They can be used creatively: to encourage people to work an unpopular shift; to help them feel safe getting to a less-than-desired location; or as an incentive for hard work. They can be offered to management only, or to any other group or individual. Employers can also choose how to operate the plan. For instance, the employer may hand out pre-purchased bus passes at the beginning of the month, or reimburse employees for their prior month pass. Either way, the amount expended, up to the limits, is not subject to payroll taxes because it is not counted as income. These are some of the many reasons to consider a salary reduction transportation benefit plan. If you want to get aboard but find you need a road map, contact us. We’ll be happy to send you details. You may recall our article in the Fall 1998 issue of FlexTalk about family status change rules. In that article, we discussed new temporary regulations covering changes in status for Section 125 plans. Briefly, the new temporary regulations outlined six categories of changes allowed beginning January 1, 1999. We want to alert you that final regulations have not yet been issued; the temporary regulations remain in effect until further notice. If you have questions, or if you need a reprint of the earlier article, please call our office. We’ll be happy to help you. Manley Services wants to assure our clients that your address and phone number are kept strictly confidential within our company. We do not sell or provide them to anyone. Meet Our Staff...Kim Gilfillan Manley Services is proud to introduce you to one of our longest-term employees, Kim Gilfillan. Kim grew up in the small coastal town of Coos Bay, Oregon. She attended her local community college, Southwestern Oregon Community College, for two years. At 19, she decided it was time for a change, and headed inland. In Eugene, she studied computers and business at the University of Oregon, and worked at a movie theater. Then she heard about a job at a new company called Manley Services. Kim was attracted to the energetic atmosphere of a young company just starting out, and they were impressed with her. She got the job and hasn’t looked back since. “We had only a few clients then,” she says. “There was a lot of effort to go out and get new clients. It was exciting.” In the beginning, Kim was one of the employees who was not a member of the Manley family. Now, in many ways she is. Kim says she is a claims processor-primarily. When the claims are caught up, she pitches in wherever she is needed. She enjoys working on 5500 filings, and agent commissions, too. “I like having new experiences and learning new things,” she says. “With the way the company has grown, there’s always something new to learn.” When asked why a company should choose Manley Services for Flex Plan administration, Kim’s answer is quick and decisive. “We’re very personable and efficient. We always give our best effort to do an accurate and complete job. Clients expect that kind of accuracy.” In her off hours, Kim likes to relax. She enjoys her pets, Rosie, a 6-year-old liver spotted Dalmation, and Sneezer, a 5-year-old allergic cat. Kim likes quiet activities, like movies and reading. She is currently reading a book about the 1805 Lewis and Clarke expedition. She finds it especially interesting, considering a recent vacation. She and her best friend and roommate, Sue (Manley, by coincidence) drove to Montana to visit Kim’s sister. They toured the area, traveling in many of the same places that Lewis and Clarke did. She said it was fascinating to stand on the same spot where those famous explorers stood two centuries before. Kim is proud of her contribution at Manley, and of the service they provide. Kim’s contribution is also appreciated by Stan, and the rest of the Manley ‘family.’ Client Profiles: Jewett, Barton, Leavy & Kern At Jewett, Barton, Leavy and Kern, an insurance agency in Portland, Oregon since 1870, experience makes the difference. Because they’ve been in business so long, they understand how industry knowledge and interpersonal skills combine to create an effective team. Cathy Webb, a vice President at JBL&K, knows this, too. That’s why, when things were not running smoothly on their Flex Plan administration, she knew it was time to make a change. JBL&K chose Manley Services to take over the administration of their Section 125 plans. Manley has been providing administrative services for JBL&K’s plans for several years now, and Cathy couldn’t be happier. She reports that Manley’s people skills are superior. Claims are processed very promptly and cleanly. Of course, there are times when an employee does not clearly understand the plan. At times like these, Cathy feels that Manley really shines. The communication skills of the Manley staff makes employee meetings, in groups and individually, so nice. Employees leave with a good understanding of Section 125, and a phone number they can call if they have any more questions. For this reason, and because of Manley’s technical expertise, Cathy recommends using Manley for Section 125 administration. “I recommend them all the time!” she reports. “They do such a great job.” Once again, experience really does make the difference. We have settled in here at our new offices, and our clients have been great about directing mail to us correctly. We need your help, though, to ensure that your employees have our new address. Requests for Reimbursement can be delayed when they are sent to the old address, therefore reimbursements back to the employee can also be delayed. Please make sure employees are using our new address: PO Box 70168, Eugene, OR 97401. Also, please remind employees that credit card receipts are not considered valid documentation for reimbursable expenses. IRS requires third party verification of expenses, such as a billing from the doctor’s office. If there are questions we’re happy to help.
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