May 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:
Final rules give employers some breathing room to determine who is a full-time worker for mandate purposes, expert says, Employee Benefits Management Directions, Issue No. 561, April 8, 2014 — The IRS issued final regulations on the Patient Protection and Affordable Care Act’s (ACA) shared responsibility provisions (also known as the employer mandate) in February. To find out what’s in the final rules and what employers should be doing now to get ready to comply, Wolters Kluwer reached out to Kathy Bakich, Senior Vice President and National Health Compliance Practice Leader at The Segal Company.
Contraceptive mandate faces harsh challenges by Supreme Court in oral arguments, Employee Benefits Management Directions, Issue No. 561, April 8, 2014 — The justices of the United States Supreme Court were conspicuously divided along both political and ideological lines in oral arguments for Sebelius v. Hobby Lobby Stores, Inc. and Conestoga Wood Specialties Corp. v. Sebelius , two cases challenging thecontraceptive coverage provisions ofthe Patient Protection and AffordableCare Act (ACA).
Employers need to concentrate on systems for ACA reporting compliance now, experts say, Employee Benefits Management Directions, Issue No. 562, April 22, 2014 — Even though compliance with the Patient Protection and Affordable Care Act’s (ACA) employer mandate has been delayed until 2015 (and to 2016 for employers with 50 to 99 full-time employees) and employers will not have to comply with the ACA’s reporting requirements until early 2016, it is important for employers to concentrate now on getting their systems in place to record this information, noted experts at Ernst & Young at a recent webinar entitled, Practical Discussion of the Affordable Care Act: Implementation Implications for Your Business Processes, Financial and Technology Systems, and Internal Controls.
IRS provides guidance on health flexible spending arrangement carryovers and health savings account eligibility, Employee Benefits Management Directions, Issue No. 562, April 22, 2014 — Notice 2013-71 has created some confusion for employers who have both a high-deductible health plan (HDHP) with a health savings account (HSA) and a health FSA with a carryover feature. The IRS Office of Chief Counsel has issued Memorandum 201413005 to answer some questions concerning the health FSA and HSA eligibility.
What's New in Employee Benefits Management:
2014 maximum vehicle values — The IRS has released the maximum allowable value of certain employer-provided automobiles, including trucks and vans, that are first made available to employees for personal use during calendar year 2014. See ¶150,090 and ¶150,095 for the amounts.
Final regulations on benefits and parameters for 2015 — The discussion at ¶12,130 has been updated to reflect the final regulations relating to benefits and parameters for 2015 for Exchanges.
Health FSA carryovers — The IRS has provided guidance on health FSA carryovers and HSA eligibility. For more information, see ¶39,067.
IRA rollovers — In Bobrow v. Commissioner, the U.S. Tax Court ruled that, regardless of how many IRAs he or she maintains, a taxpayer may make only one
nontaxable rollover contribution within each one-year period. This is in conflict with longstanding IRS policy, which had applied the once-a-year rollover rule to each IRA separately. For more information, see ¶79,510.
2015 Medicare amounts — The Centers for Medicare & Medicaid Services has issued the 2015 Medicare Part D amounts. For details, see ¶10,360 and ¶53,140.
What's New in Benefits Answers Now (BAN):
IRS provides guidance on health FSA carryovers and HSA eligibility. In Notice 2013-71, the Internal Revenue Service modified health flexible spending arrangements’ (health FSAs) use-it-or-lose-it rule, and now allows employers to amend their cafeteria plans to provide for the carryover of up to $500 in unused health FSA contributions to the immediately following plan year. While Notice 2013-71 provided a much-wished-for easing of the use-it-or-lose-it rule, it has created some confusion for employers who have both a high-deductible health plan (HDHP) with a health savings account (HSA) and a health FSA with a carryover feature. The IRS Office of Chief Counsel has issued Memorandum 201413005 to answer some questions concerning the health FSA carryover and HSA eligibility. Find out more about the interaction between health FSAs with a carryover feature and HSA eligibility at ¶73,040.
Law eliminates deductible limits for employer-sponsored plans in small group market. The Protecting Access to Medicare Act of 2014 eliminates the deductible limits for employer-sponsored health plans in the small group market. Specifically, Sec. 213 of the law repeals Section 1302(c)(2) of the Patient Protection and Affordable Care Act, which had placed limits on deductibles in employer-sponsored health plans in the small group market, subject to the law’s actuarial value requirements. An overview of the ACA can be found at ¶20,010.
IRS provides guidance on amending plans to comply with Windsor decision. The IRS has issued a notice that provides guidance on how qualified plans should treat the marriages of same-sex couples following the Supreme Court's decision in United States v. Windsor. The guidance, provided in a question-and-answer format, discusses how Windsor affects the tax law requirements under which the marital status of the participants is relevant to the payment of benefits and describes when retirement plans must be amended to comply with Windsor. See the discussion at ¶10,190 for more information about how retirement plans should treat the marriages of same-sex couples.
CMS requires provision of nondiscriminatory coverage for legally married same-sex spouses. The Centers for Medicare and Medicaid Services (CMS) has issued a release clarifying that the availability of coverage requirement of the Public Health Service Act (PHSA) requires issuers of health insurance coverage to provide the same coverage to legally married same-sex spouses under the same terms and conditions offered to opposite-sex spouses. In recently released questions and answers, CMS cited PHSA’s implementing regulations, which set forth a prohibition on discriminatory marketing practices and benefit designs. To find out more about the CMS release, see ¶20,650.
IRS provides simplified safe harbor procedures to validate rollover contributions. The IRS has issued a revenue ruling providing simplified safe harbor due diligence procedures that a plan administrator may use to determine the validity of a rollover contribution. More information about the safe harbor procedures can be found at ¶14,950.
What's New in Spencer’s Benefits Reports:
Health Insurance Reporting. Under the ACA, employers have a number of reporting responsibilities, including the reporting of health coverage and the cost of coverage, among others. This report discusses those requirements (Report 558.-1).
Premium Stabilization Programs. To protect against adverse selection in the exchanges, the ACA created three premium stabilization programs to stabilize premium growth during the initial years of ACA implementation. This report provides an overview of these programs (Report 542.-1).
Additional Medicare Tax. The ACA added an additional Medicare tax to certain earnings. This report details the provisions of the tax, and contains pointers for practitioners to keep in mind for administrative purposes (Report 324.4.-19).
Employer Payment Plans. In the past, the IRS allowed the reimbursement by an employer of individually purchased health insurance. However, these types of arrangements are no longer allowed because they violate the ACA market reforms (Report 352.-15).
Prohibited Transactions. Covered service providers are required to disclose information regarding compensation, fees, costs, and potential conflicts of interest under the service contract. The EBSA recently proposed rules on this ERISA provision (Report 605.5.-1).
New Pension/Benefits Titles Added:
401(k) Advisor (April 2014 issue)
Employee Benefits Plan Review (April 2014 issue)
Journal of Pension Planning & Compliance (Summer 2014 issue)
Pension Benefits (April 2014 issue)