IRS Announces Key 2011 Indexed Limits

 
Benefits Brief
November 2, 2010

The IRS has recently announced the various qualified plan related limits for 2011. The most widely used limits have not changed from their 2010 amounts and are summarized below.


2010

2011

Compensation limit

$245,000

$245,000

Section 415(b) limit

$195,000

$195,000

Section 415(c) limit

$49,000

$49,000

Section 402(g)/401(k) limit

$16,500

$16,500

Catch-up contributions

$5,500

$5,500

HCE threshold

$110,000

$110,000

Taxable wage base

$106,800

$106,800


QUALIFIED PLAN YEAR-END REMINDERS

There is an ever growing list of annual notices that must be distributed in connection with the routine operation of qualified plans.  Some of the items include the following:

MEDICARE PART D NOTICE REMINDER

Employers sponsoring group health plans that include prescription drug coverage are reminded of an obligation to issue a Notice of Creditable Coverage relating to that coverage before November 15, 2010. (The Notice must be provided annually prior to November 15 and at other times, such as upon enrollment.)  The Notice provides information for Medicare eligible individuals and is designed to help them understand their employer-based prescription drug coverage as they evaluate their options under the Medicare Part D prescription drug program. A sample Notice is available on the Centers for Medicare & Medicaid Services (“CMS”) website.

In addition, employers must also inform CMS about the prescription drug coverage provided. This is an annual disclosure obligation, generally made within 60 days of the beginning of the plan year and at various other times, such as after a change in creditable coverage status. The disclosure to CMS can only be submitted electronically via the CMS website.

An ever growing list of welfare benefit plan notices must also be provided (on an annual or other periodic basis). For the most part, we would expect insurers and third-party administrators to assist employers in meeting these obligations. If you have any questions about any of these requirements, however, please feel free to contact a member of the Employment and Benefits Practice Group.