The U.S. Department of Labor (DOL) has released the results of its Employee Benefits Security Administration’s (EBSA) enforcement actions during fiscal year (FY) 2023.
The DOL has broad authority to investigate or audit an employee benefit plan’s compliance with ERISA. EBSA handles audits of employee benefit plans for the DOL. To perform these audits, EBSA employs investigators working out of field offices, many of whom are lawyers or certified public accountants or who have advanced degrees in business or finance.
Through its enforcement of ERISA, EBSA oversees approximately 2.8 million health plans, 765,00 pension plans, and 619,000 other welfare benefit plans. According to the audit, these plans cover 153 million workers, retirees, and dependents.
In FY 2023, EBSA recovered over 1.4 billion dollars for plans, participants, and beneficiaries. Other key EBSA enforcement results include the following:
- EBSA closed 731 civil investigations. Of these, 69% resulted in monetary results for plans or other corrective actions.
- EBSA referred 50 cases for civil litigation and closed 196 criminal investigations.
- EBSA’s criminal investigations indicted 60 individuals—including plan officials, corporate officers, and service providers—for offenses related to employee benefit plans.
EBSA has a dedicated enforcement webpage that outlines ERISA’s civil violations and criminal provisions, as well as enforcement accomplishments and national enforcement priorities and projects.
IRS Reminder: Health FSAs, HRAs, and HSAs Cannot Pay for Personal Health and Wellness Expenses
The IRS has issued a bulletin to remind taxpayers that tax-advantaged medical savings accounts, such as health flexible spending accounts (FSAs) and health reimbursement arrangements (HRAs), cannot pay for personal expenses for general health and wellness. Similarly, health savings accounts (HSAs) cannot be used to pay for these expenses on a tax-free basis. The IRS is concerned that taxpayers are being misled by companies that misrepresent when personal expenses can be reimbursed by these accounts.
Health FSAs, HRAs, and HSAs can only be used to pay for qualified medical expenses on a tax-advantaged basis. Expenses that are merely beneficial to general health are not qualified medical expenses. The IRS maintains a set of FAQs addressing when costs related to nutrition, wellness, and general health are qualified medical expenses. These FAQs clarify that these costs are qualified medical expenses only in very limited circumstances.
Therefore, the IRS cautions taxpayers to beware of companies misrepresenting nutrition, wellness, and general health expenses as qualified medical expenses. According to the IRS, some companies mistakenly claim that notes from doctors based merely on self-reported health information can convert nonmedical food, wellness ad exercise expenses into qualified medical expenses.
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