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As 2024 comes to a close, human resources professionals have a lot to do to close out the current year and prepare for 2025. Ensuring compliance with a wide range of regulations and preparing for the upcoming year can be challenging. From benefit plan updates to employee documentation, it’s critical to manage a number of policies, procedures, and guidelines to avoid penalties and set the stage for a smooth transition into a new year.
Innovo Benefits Group is offering a comprehensive guide and downloadable checklist to help HR professionals navigate these important final months and meet key compliance deadlines. To help streamline your process, download our Year-End Compliance Checklist below!
September & October: Planning and Preparation
Distribute Medicare Part D Notices
By October 15th, employers must distribute Medicare Part D Creditable Coverage notices to all eligible employees, retirees and COBRA participants.Performance Reviews and Compensation Planning
Now is the time to create a timeline for performance reviews, determine the merit percentage pool, and assess cost-of-living adjustments (COLA). Aligning these elements ensures compensation packages remain competitive and reflect employee performance.Audit W-2s
Confirm with payroll that employee wages for W-2s have been reviewed and audited for accuracy. Address any discrepancies early to avoid year-end tax complications.Remind About PTO Use
If your organization has a “use it or lose it” policy for Paid Time Off (PTO), remind employees to schedule their remaining time off. This helps reduce liability for unused PTO and encourages a healthier work-life balance.FSA and DCA Reminders
For employees with Flexible Spending Accounts (FSA) or Dependent Care Accounts (DCA) in calendar year plans, remind them to use their funds before the end of the year. Unused balances may be forfeited, depending on your plan’s rules.Open Enrollment Preparation
Begin planning for Open Enrollment if your company operates on a calendar-year plan. Review and finalize decisions about carriers, plan designs, cost-sharing options, and FSA, DCA, and Health Savings Account (HSA) limits.
Open Enrollment
(For Calendar Year Plans)
Distribute Summary of Benefits and Coverage (SBC)
During Open Enrollment, distribute updated SBCs to all enrolled employees, including those on COBRA. This ensures everyone is informed of their coverage options for the coming year.Update and Distribute ERISA Notices and SPDs
Ensure all required ERISA notices and updated Summary Plan Descriptions (SPDs) are distributed. If any plan information has changed, reflect these updates in the SPD and wrap documents.ACA Compliance
Confirm that your health plans meet the ACA's affordability requirements.
December: Final Preparations
Impute Income for Domestic Partners and Group Term Life Insurance
Domestic partner and group term life insurance benefits must be calculated and added to W-2s as imputed income. For further details, review IRS Section 79 chart.Disability Plans and Taxation
If your disability plans include tax-choice or gross-up provisions, tax employees on the total annual premium.- Disclosure Reporting
Be sure to complete Health Insurance Disclosure Reporting (HIRD). Employers in Massachusetts must file the HIRD form through Mass Tax Connect by December 15. MA Paid Family and Medical Leave (PFML)
For Massachusetts employers with calendar year privatized PFML plans, reapply for state exemptions through MA Tax Connect and update employee payroll contributions. Remember to redistribute updated PFML notices before December 31st.Nondiscrimination Testing
Conduct required nondiscrimination testing for retirement plans, FSA, and DCA to confirm compliance with IRS rules. Failure to test or comply could result in penalties.- Life and Disability Updates
Update any new salaries with life and disability carriers, and age bands with voluntary insurance carrier.
Year-End Wrap-Up
Labor Law Posters and Employee Handbook Updates
Review your labor law posters and employee handbook. Make necessary updates to ensure compliance with both state and federal guidelines and reflect any policy changes or new regulations.Personnel Record Maintenance
Update or purge employee records in compliance with state and federal laws. Regular housekeeping of personnel files helps prevent legal exposure related to document retention policies.Compliance Training
Conduct annual compliance training for employees. This may include anti-harassment, OSHA training, and any state-specific requirements. Ensure all mandatory training is up to date to end the year on a compliant note.Prepare for New State Programs
Stay ahead of any new state-mandated programs that may begin in 2025. For example, Delaware and Maine will begin payroll deductions for paid leave programs starting January 1, 2025. Ensure your payroll systems are updated to accommodate these new requirements.
First Quarter: 2025 Compliance Tasks
W-2 Distribution
Distribute W-2s to all active and terminated employees from the prior year by January 31st. For employers with 250+ employees, include mandatory insurance disclosure in w-2s.EEO Reporting
For employers with 100+ employees, complete EEO-1 reporting by March 31.Medicare Part D Disclosure
Plan sponsors must submit their Medicare Part D disclosure to the CMS within 60 days of the beginning of the plan year.ACA Reporting
Applicable Large Employers (ALEs) must furnish ACA statements to employees by January 31st. Be sure to file returns with the IRS by February 28th (March 31st if filing electronically).OSHA Reporting
Complete OSHA reporting requirements. Between February 1st and April 30th, post your OSHA 300A Summary of Work-Related Injuries and Illnesses.
Do you need help with your year-end checklist? Contact us with your questions or to schedule a meeting.