2023 End-of-Year Checklist for Employee Benefits

As another year draws to a close, human resources representatives have a prime opportunity to manage and review employee benefits, verifying they remain compliant with local and state regulations while being up to date.

To ensure a smooth transition into 2024, start by confirming beneficiary information, double-checking the payroll and tax checklist, ensuring you understand any regulatory updates for next year and sending reminders about benefit updates. This process involves a lot of administrative work, which we simplified by breaking it down into five categories.

1. Update 2023 Records

Keeping records up to date is part of the planning process for 2024 benefits and wrapping up operations for the 2023 calendar year. Here are the documents that should take priority.

• Tax withholding information: Verify changes in allowances and exemptions to ensure that all employees’ W-4 forms are up to date.
• Benefit enrollment changes: Review healthcare benefits, life insurance plans, retirement contributions and other voluntary benefits, confirming any employee changes throughout the year.
• Beneficiary information: Review and update employee beneficiary information for health, retirement and life insurance policies.
• Employee reminders: Ask employees to send updated information or double-check that the details you have on file are correct.

2. Verify Employee Benefits

If your organization maintains 50 or more full-time employees, you fall under the Affordable Care Act and must provide healthcare coverage for employees. To comply with these regulations, provide Forms 1094-C and 1095-C to employees by March 31, 2024. Here is your employee benefits checklist to help you audit and verify.

• Analyze healthcare policies and coverage: Determine if employees’ healthcare coverage aligns with their needs and note policy changes you must communicate to staff.
• Review employee contributions: Ensure employee contributions to retirement plans like 401(k)s follow IRS limits and regulations.
• Check benefit plans: Assess the usage and performance of various plans to understand employee engagement and determine whether some of these incentives should remain in place next year.
• Prepare for the next open enrollment period: Review benefits, especially healthcare plan changes, in anticipation of next year’s open enrollment and update handbooks or online resources with any new information.
• Verify compliance: Check that employee benefits comply with updated governmental regulations and note how any updates may affect benefit plans in the following year.

3. Check Your Payroll and Taxes

As you finalize the benefits and compensation for next year, it is vital to check that your taxation and payroll reporting is in line. Your organization must comply with federal, state and local employee benefits and payroll regulations. For a smooth transition into the new year, check the following information, providing employees with the necessary documents where applicable.

• Bonuses and rewards: Finalize the distribution of year-end bonuses, performance-based incentives or rewards.
• Check W-2s: Order year-end tax forms like W-2s and W-3s to provide employees with end-of-year tax statements by Jan. 31.
• Tax reports for fringe benefits: Add fringe benefits like stock options and company cars to W-2 forms, as these are taxable.
• Verify employee information: Gather and verify employee benefit information relating to healthcare, PTO and sick leave and retirement plan eligibility, making updates where necessary.
• Confirm business information: To remain tax-compliant, update details like your business’ name, address and federal and state employer identification number.

Consult with tax and payroll professionals if you need clarification on any of the items on this checklist to ensure accuracy and legal compliance.

4. Remind Employees About Their Benefits

Encourage employees to maximize their benefits by sending out timely reminders about using them while they can. You could compile a comprehensive email or company-wide newsletter detailing end-of-the-year benefits where employees can check their use, especially regarding healthcare plans and PTO balances. Here are a few items to include.

• PTO and policies: Send an email informing employees about adjustments to PTO rollover policies or vacation days for the following year.
• Healthcare offerings: Advise employees about deadlines to modify their healthcare plan for next year and share information on relevant changes coming up in the new year.
• Educational resources: Suggest how employees can maximize their resources, like guides on wellness programs, information on their flexible spending accounts or retirement planning tools.
• Year-end deadlines: List upcoming deadlines like FSA expiration dates to avoid forfeiture.
• Annual notices: Provide employees with an annual statement of their benefits, including a benefits summary and coverage for group healthcare packages. This notice often accompanies the dates of open enrollment periods.
• Deadlines: Set clear deadlines, ensuring employees are aware of submission dates for various elements of the benefits in their compensation package. These deadlines must align with legal compliance and relevant administrative processes.

5. Stay Abreast of New Developments

It is essential to check which legislative changes are taking place and how these will impact employee benefits in the new year. The IRS is implementing two primary changes for 2024.

• Wage base for 2024: The wage base for 2024, relating to the Social Security portion of FICA, is $168,600.
• ACA affordability thresholds: The IRS shares a lower affordability threshold for 2024 of 8.39%. This percentage applies to a plan year as opposed to a calendar year.
• FSA contribution limits: Employees will enjoy increased employer contributions to healthcare flexible spending accounts, additional carryover amounts and an adoption assistance program increase.

Update Your Employee Healthcare Benefits for 2024 

As another calendar year wraps up, your to-do list fills with compliance deadlines and communications to remind and inform employees about benefits. By diligently reviewing employee information, updating benefit records and staying updated on legislative changes, employers demonstrate their commitment to supporting staff.

With the team at The Difference Card, you can enjoy up to 20% savings in employee medical insurance costs and the best-in-class benefits. We offer you guaranteed savings and peace of mind, thanks to custom benefit plans and superior service for employers and members. Contact us today to learn how to customize your staff’s healthcare benefits for 2024.