IRS Confirmation Notices Mailed to Co-ops in NRECA Disability Plans

font-family: Arial, Helvetica, sans-serif;”>In July, co-ops participating in long- or short-term disability plans were asked to complete, and return to NRECA, IRS Form 2678. The IRS is now mailing confirmation letters to co-ops indicating they have received and approved this form.

Through the new relationship with UMR, NRECA is able to add a “FICA” match as a new feature to its long- and short-term disability plans. This enhancement means cooperatives no longer have to pay FICA expenses each year or report FICA taxes to the IRS each quarter. UMR will also produce year-end W-2 forms for all benefits, taxable and non-taxable.

To authorize this, co-ops participating in NRECA’s long- or short-term disability plans were asked to complete IRS Form 2678 along with the Group Benefits Program Participation Agreement. Co-ops that no longer participate in these plans, but have employees receiving disability payments through them, also needed to fill out the form. Form 2678 indicates that your co-op appoints UMR, Inc. as your “agent.” This allows UMR to file tax returns, make deposits or payments of employment or other withholdings on your co-op’s behalf as associated with disability benefits paid by the NRECA plan.

No further action is required when you receive this notice
Co-ops are currently receiving a confirmation notice from the IRS indicating they have received and approved your co-op’s completed Form 2678. This form was provided to the IRS by NRECA and UMR. You don’t need to respond to the IRS or take any further action at this time.

Remember, this form was required for all co-ops participating in long- or short-term disability plans offered by NRECA because UMR reports to the IRS on Form 941 both taxable and non-taxable benefits. Form 2678 authorizes UMR to do that filing on behalf of your co-op.

A few things to keep in mind going forward:

• Your co-op won’t need to file Form 2678 every year
• UMR doesn’t have access to your co-op’s tax information
• You may notice that the tax identification number (TIN) on the confirmation letter is different than the TIN used by UMR. This is because the confirmation letter reflects your co-op’s TIN since the co-op appointed UMR as its agent

If you have more questions about NRECA’s long- or short-term disability plans, or the partnership with UMR, contact the Member Contact Center at 1.866.673.2299 or contactcenter@nreca.coop.