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December 2012

From the editors of CCH's BENE and BAN products, here are hot topics from recent Employee Benefits Management Directions newsletters as well as recent explanatory updates in Employee Benefits Management. Also included are recent explanatory updates to the Benefits Answers Now product.

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Hot Topics in Employee Benefits Management:

Future guidance will address additional employer shared responsibility questions, government officials say, Employee Benefits Management Directions, Issue No. 527, November 6, 2012 — The Treasury and the IRS intend to issue additional guidance by early 2013 on who is subject to the Code Sec. 4980H employer shared responsibility payment, said Kevin Knopf, attorney advisor, Treasury Office of Benefits Tax Counsel. Knopf was speaking at a session of the American Bar Association’s Health and Welfare Benefit Plans 2012 conference in Washington, D.C.

Health reform survey finds business as usual for employers in 2013, Employee Benefits Management Directions, Issue No. 527, November 6, 2012
Employers say it will be business as usual in their approaches to health benefits, as they plan for new developments in the coming year due to the Patient Protection and Affordable Care Act, according to a survey by the non-profit Midwest Business Group on Health (MBGH) in collaboration with The Benfield Group.

Secular company is entitled to temporary injunction from ACA enforcement on basis of religion, district court rules, Employee Benefits Management Directions, Issue No. 528, November 20, 2012 — An outdoor power equipment supply company employing over 170 employees is entitled to a preliminary injunction barring the U.S. government from enforcing the provisions of the Patient Protection and Affordable Care Act (ACA) that require all non-grandfathered group health plans to provide a full-range of FDA-approved contraceptive methods without cost sharing, according to a ruling by the U.S. District Court for the Eastern District of Michigan, Southern District.

ACA deadlines are looming, but employers still lack clear-cut guidelines, say experts, Employee Benefits Management Directions, Issue No. 528, November 20, 2012 — At a November 8, 2012 webcast entitled “How Will the Election Impact the Affordable Care Act?” presenters Charles K. (Chip) Kerby III and Kathryn L. Bakich highlighted upcoming deadlines based on the Patient Protection and Affordable Care Act (ACA), such as the March 23, 2013 date for employers to send notices about state exchanges to employees, the recently-extended December 14, 2012 deadline for states to submit to the government plans for state-based exchanges, and the October 1, 2013 implementation and open enrollment start date for state exchanges.

What's New in Employee Benefits Management:
2013 Social Security amounts — The cost-of-living adjustment (COLA) for Social Security benefits received by beneficiaries starting in January 2013 will be 1.7%, according to the Social Security Administration (SSA). For the 2013 adjusted benefit amounts, see ¶2070.

2013 pension plan COLAs — The IRS has announced pension plan limitations for 2013. The cost-of-living adjustments (COLAs) can be found throughout the explanations, including at ¶75,490, ¶76,980, ¶77,115, ¶84,020, and ¶84,065.

2013 LTC, MSA COLAs — The IRS has issued the 2013 adjusted limits for long-term care and medical savings accounts (MSA). For the amounts, see ¶10,330 and ¶53,075.

ACA religious exemption — The ruling in Legatus v. Kathleen Sebelius (see story above) is discussed at ¶10,140.

401(k) plan fees — The discussion at ¶84,085 on 401(k) plan fees has been updated.

Notification of interested parties — Before filing an application for determination, an employer or plan administrator must notify all interested parties that a determination letter is being requested. The notification rules have been updated at ¶73,420.

What's New in Benefits Answers Now (BAN):

ACA’s health insurance rate review program may have an influence on increases in premiums. State health insurance rate review programs may have a material influence on the premiums that ultimately get charged to individuals and small businesses, according to a Kaiser Family Foundation report on the health insurance rate review program. Under the program established by the Patient Protection and Affordable Care Act (ACA), states and the federal government review proposed premium increases above a threshold amount, which is currently 10 percent or more, in the small group and individual markets to determine whether the increases are reasonable. Find out more about the rate review program at ¶20,058.

Retiree health savings needs drop, while workers begin aging into retiree health changes. Projections for how much elderly Americans need to save for out-of-pocket health care in retirement have decreased, due to a provision the Patient Protection and Affordable Care Act (ACA) that covers more prescription drug costs, according to a report from the Employee Benefit Research Institute (EBRI). A separate report from EBRI found that a growing number of workers are realizing they will not get retiree health care from their employers after they stop working. More information about these two studies can be found at ¶22,920 and ¶22,970.

Treasury, IRS announce special relief to encourage leave-donation programs for victims of Hurricane Sandy. The Treasury Department and the Internal Revenue Service have announced special relief intended to support leave-based donation programs to aid victims who have suffered from the extraordinary destruction caused by Hurricane Sandy. Under these programs, employees may donate their vacation, sick or personal leave in exchange for employer cash payments made to qualified tax-exempt organizations providing relief for the victims of Hurricane Sandy. For more information about this leave donation program, see ¶32,780.

Only half of workers in small firms offered and eligible for health insurance. Only 49 percent of workers in small businesses with fewer than 50 employees were offered and eligible for health insurance through their employer in 2010, down from 58 percent in 2003. In contrast, 90 percent of workers in firms with 100 or more employees were offered and eligible for health insurance in both 2003 and 2010, according to a recent Commonwealth Fund report. See the discussion at ¶60,430 for more information about prevalence of small employers offering health insurance.

Thanksgiving, Christmas, New Year’s Day top list of holidays employers will observe in 2013. Most employers (99 percent) will close their offices on Thanksgiving and Christmas Day in 2013, according to the 2013 Holiday Schedules Survey Findings released by the Society for Human Resource Management (SHRM). To find out more about popular holiday days, see ¶31,550.

What's New in Spencer’s Benefits Reports:

Dollar Limits And Thresholds. The IRS annually releases a number of indexed figures. This report provides the defined benefit and defined contribution plan maximums, as well as the highly compensated employee limit, as indexed for 2013 (Report 101.3.-1).

Long Term Care. Long term care insurance premiums to a certain extent receive favorable tax treatment as nontaxable accident and health plans under IRC Sec. 7702B. This report summarizes the provisions of IRC Sec. 7702B covering long term care insurance and provides the limits for 2013 (Report 325.23.-1).

Sec. 401k Plans. Sec. 401(k) plans can only be used by profit-sharing plans, stock bonus plans, pre-ERISA money purchase plans, and rural cooperative plans. This report has been updated to reflect the limits for 2013 (Report 221.-1).

CDHP Trends. Consumer-driven health plans (CDHPs) are now mainstream in the health care marketplace. This report examines eight annual surveys on CDHPs to understand what analysts are discovering about consumer-driven health care (Report 357.-13).

Equal Pay Act. Under the Equal Pay Act, pay and benefits must be equal for men and women who perform the substantially equal jobs. This report summarizes the benefits-related provisions in the Equal Pay Act (Report 402.-1).

New Pension/Benefits Titles Added:
401(k) Advisor (Winter 2013)
Employee Benefit Plan Review (December 2012)
Employee Stock Ownership Plan Answer Book (4th Edition)
Executive Compensation Answer Book (2013 Supplement to the 8th Edition)
Flexible Benefits Answer Book (2013 Supplement to the 6th Edition)
Journal of Deferred Compensation (Winter 2013)
Mandated Benefits 2013 Compliance Guide
The 2013 Pension Answer Book
Pension Benefits (December 2012)
Quick Reference to IRAs (2013 Edition)
State by State Guide to Managed Care Law (2013 Edition)
Value of Pensions in Divorce (2013 Supplement to the 4th Edition)