Travis Software Corp, company in Advanced Employee Benefits Software and provider of TravisFlex software, announced today they have modified their system to accommodate a new IRS regulation which reduces the risk of the use it or lose it rule for Section 125 plans by allowing an additional 2-1/2 months after the end of a cafeteria plan year in which an employee can submit claims against the prior year’s contributions. The new regulation goes into effect as of the next plan anniversary date after June 30, 2005 for each benefit plan, once Plan Documents are amended to acknowledge the new rule.
Immediately after the new Regulations were issued, we sent an email to our customers announcing that we would be releasing a new version of TravisFlex to address the new Grace Period, a new version to be called Release 7.3, said Alan H. Williams, owner and founder of Travis Software Corp. The new version is now available.
Travis Software changed their flexible spending account software to accommodate the new Grace Period by modifying TravisFlex and adding a few new custom options. The system will give the ability to provide the Grace Period to people who participated in the Plan during the Previous Year but did not enroll for the New Year. Perhaps the most significant (and most complicated) new feature added involves handling the various interpretations of whether Previous Year money can be replaced once it has been paid. A new Option in Release 7.3 which will allow the system to automatically reflect the decision, on a Plan-by-Plan basis, about the issue was added. Here are a couple of examples:
Option A - Once Previous Year Funds are Gone, They’re Gone - is simple. If John Doe has $200 left over from the previous year in his ME account and a claim for $150 for services in the New (Current) Year comes in during the Grace Period is paid with Previous Year Funds (you will be able to designate which year the funds should be paid from at the time the claim is entered), the balance of the Previous Year will be reduced to $50. If a claim is entered for $100 later in the Grace Period that has an actual date of service of the Previous Year, only $50 of that claim will be paid.
Option B - Previous Year Funds are Renewable - if this Option is set to Yes and the same situation as described above occurs, TravisFlex will transfer (adjust) $50 back to Previous Year funds from New Year funds so that the full $100 of the second claim can be paid. Additionally, since there was originally $150 left over from the Previous Year, an additional $50 will be available (assuming there’s $50 still available in New Year funds) for adjustment back to Previous Year funds during the Grace Period should more claims with dates of service during the Previous Year be entered.
In addition to the New Grace Period enhancements, there are enhancements to reports and the SmartFlex Interface. In Release 7.30 several reports have been enhanced so that they may be printed in landscape format and saved to an Excel file. A listing of the reports modified are as follows: Balance by Benefit Plan, Employee Account Summary, Account Inquiry, Check Register, Contribution Worksheet, Balance by Employee, Claim Audit, Spending Account Forfeitures, Claim with Category, and Year to Date activity report. The ability to send/receive Secondary Health Account information to/from SmartFlex has been added to the SmartFlex debit card interface.
Since Plan Documents and Summary Plan Descriptions have to be amended or restated in order for a Plan to take advantage of the new Grace Period, Travis Software has also provided a new version of TravisFlex/Doc that was sent to users in August, 2005 that provides the capability for either an amendment or restatement to be produced which will include wording for the Grace Period and its various options.
Distributed by HR Marketer.com
Travis Software Corp have modified their system to accommodate a new IRS regulation
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