Benefit Plans Change for Employees in Reserve
February 2nd, 2009 Posted by MadisonTwo recent changes to the law require employers to change their benefits for employees who serve in the Military Reserve.
The Heroes Earnings Assistance and Relief Tax Act or HEART Act requires employers to permit distributions from healthcare flexible spending accounts. The law prevents a “use-it-or-lose-it” policy for qualified reservists. Under the new law, reservists cannot lose unused funds, as can other employees under cafeteria benefits plans. Reservists must be permitted to withdraw the funds without penalty.
The new regulations went into effect in the middle of 2008, but many employers still struggle with compliance.
Under the HEART Act, benefit plan sponsors must amend cafeteria plans to allow distributions to qualified military reservists and notify all participants – not only qualified reservists – of the changes.
The law also permits active duty reservists to withdraw money (more…)
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Tags: 401K, active military, benefit, federal, flexible savings, Heart, heart act, military reserve, reserve, service, USERRA