March 2014
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:
IRS proposes regulations governing penalties for failure to maintain health insurance, Employee Benefits Management Directions, Issue No. 557, February 11, 2014 — The IRS has issued a proposed rule and notice of public meeting regarding the shared responsibility payment that individual taxpayers may have to pay if they fail to maintain minimum essential coverage as required by the Patient Protection and Affordable Care Act.
Redefine ACA’s definition of full-time employee to 40 hours per week, hearing witnesses say, Employee Benefits Management Directions, Issue No. 557, February 11, 2014 — Reductions in employees’ hours, increased costs, and reporting burdens are some of the consequences for employers as a result of the Patient Protection and Affordable Care Act’s (ACA) definition of full-time employee, according to witnesses at a House Committee on Ways and Means hearing on the impact of the definition on jobs and opportunities.
Final regulations on employer mandate delay compliance for medium-sized employers, Employee Benefits Management Directions, Issue No. 558, February 25, 2014 — The IRS has issued final regulations implementing the Patient Protection and Affordable Care Act’s (ACA) employer shared responsibility provisions (employer mandate), giving medium-sized employers (50-99 full-time employees) until 2016 to comply with the mandate and providing significant transition relief for both medium-sized and larger employers (100 or more full-time employees).
ERISA preempts state health care information reporting law due to effect on uniform benefit administration, Second Circuit rules, Employee Benefits Management Directions, Issue No. 558, February 25, 2014 — ERISA preempts a Vermont statute and regulation that requires health insurers, including self-insured plans, to file reports containing claims data and other health care information with the state, the Second Circuit ruled. The reporting requirements have a “connection with” ERISA plans, and reporting is a core ERISA function that is to be protected against multiple, possibly inconsistent, state requirements. As such, the court reversed the district court’s ruling and remanded the case with instructions to enter judgment for the insurance company.
What's New in Employee Benefits Management:
IRS user fees — The user fees for 2014 have been updated at ¶6020.
Preventive services — The Health and Human Services Department (HHS), Labor Department (DOL), and the IRS have issued a new set of Frequently Asked Questions (FAQs) on the implementation of an assortment of provisions of the Patient Protection and Affordable Care Act (ACA). The FAQs on the coverage of risk-reducing medications are discussed at ¶10,140.
Wellness programs — FAQs on wellness programs are discussed at ¶20,030.
Employer mandate — The final regulations (see story above) are discussed at ¶10,097.
SIFL rates — Standard Industry Fare Level (SIFL) rates for the first six months have been issued. For the rates, see ¶150,086.
What's New in Benefits Answers Now (BAN):
IRS, HHS, DOL issue FAQs on various ACA provisions. The Department of Health and Human Services (HHS), the Department of Labor (DOL), and the IRS have issued a new set of Frequently Asked Questions (FAQs) on the implementation of an assortment of provisions of the Patient Protection and Affordable Care Act (ACA). The FAQs cover essential health benefits, preventive care, mental health benefits, and smoking cessation programs. To find out more about the FAQs, see ¶20,051, ¶20,052, ¶21,860, and ¶23,090.
PBGC proposed regs would streamline certain multiemployer plan reporting rules. The Pension Benefit Guaranty Corporation (PBGC) has proposed amendments to its multiemployer plan regulations designed to make the disclosure of information to the PBGC and to plan participants more efficient and effective and to reduce the administrative burden on plan sponsors. The proposed regulations would reduce the number of actuarial valuations required for certain small terminated but not insolvent plans, shorten the advance notice filing requirements for mergers in situations that do not involve a compliance determination, and remove certain insolvency notice and update requirements. An overview of the proposed regulations can be found at ¶14,610.
President authorizes Treasury to establish MyRA accounts. On January 29, 2014, President Obama signed a presidential memorandum directing the U.S. Treasury to establish MyRAs, a more accessible version of a Roth IRA that the President touted during his State of the Union speech. This new product would be available to households earning up to $191,000 a year who currently lack access to workplace retirement savings plans. Initial investments could be as low as $25 and contributions that are as low as $5 could be made through payroll deductions. See the discussion at ¶10,180 for more information about MyRA accounts.
Once-a-year limit on IRA rollovers applies to all IRAs held by taxpayer. A taxpayer was limited to one IRA rollover per 12-month period, even though he took distributions from two different IRAs, the U.S. Tax Court has ruled. A distribution from the second IRA was includible in his gross income, the court held. Find out more about the case at ¶14,930.
What's New in Spencer’s Benefits Reports:
Excepted Benefits. The DOL, HHS, and IRS recently issued proposed regulations that would amend the definition of limited excepted benefits. This report provides an overview of the proposed regulations (Report 516.-1).
Temporary Disability Benefits. Temporary disability benefits are regulated in California, Hawaii, New Jersey, New York, Puerto Rico, and Rhode Island. This report describes those plans, with updated information for 2014 (Report 323.-9).
Minimum Loss Ratios. The ACA requires insurers must meet a minimum loss ratio. If minimums are not maintained, rebates must be provided to plan participants. This report analyzes the MLR rules (Report 533.-1).
Health Reimbursement Arrangements. Employer-funded HRAs may be provided tax-free to employees provided they meet certain requirements. This report provides an overview of the requirements HRAs must meet (Report 357.-1).
After-Tax Roth Contributions. This report analyzes the rules governing Roth 401(k) contributions and distributions (Report 227.-1).
New Pension/Benefits Titles Added:
401(k) Advisor (February 2014 issue)
5500 Preparer’s Manual for 2013 Plan Years
Employee Benefit Plan Review (February 2014 issue)
Journal of Pension Planning and Compliance (Spring 2014 issue)
Pension Benefits (February 2014 issue)