Wellness Rules Under the ADA – Will There Ever Be Certainty?

We previously blogged about the EEOC’s final rules, published in the Federal Register on May 17, 2016, that explain how the Americans with Disabilities Act (“ADA”) applies to employer sponsored wellness programs. These rules clarified when an employee health program, which includes a disability-related inquiry or medical examination, is considered “voluntary” under the ADA.  The EEOC’s rules stated, amongst other things, that an employer may offer incentives for employees who participate in a wellness program as long as the incentive does not exceed 30% of the total cost of self-only coverage.

We also previously blogged that this incentive provision was under scrutiny by the U.S. Read More ›

Posted in Employee Benefits, Health & Welfare Plans, Health Care Reform | Tagged , , , ,

Share this Article:

Much Ado about $50… IRS Announces Relief for Reduction of Maximum HSA Contributions

On April 3, we blogged about a reduction in the HSA contribution limit for family coverage in 2018 from $6,900 to $6,850.  This was a technical change resulting from the Tax Cuts and Jobs Act that adjusted the method for calculating inflation.  On April 26, in Revenue Procedure 2018-27, the IRS came through with a fix for this $50 technical issue.  For 2018, taxpayers with family coverage under a high deductible health plan (HDHP) may treat $6,900 as the maximum deductible HSA contribution. 

  Read More ›

Posted in Employee Benefits, Health & Welfare Plans | Tagged , ,

Share this Article:

Health Plans – A Pain to Administer But Appreciated by Employees

Administering health plans is not the easiest task.  Such plans are subject to an alphabet soup of laws, including but not limited to ERISA, the Internal Revenue Code, COBRA, HIPAA, GINA, Mental Health Parity, the ADA, the ADEA, and Title VII.  However, a November 2017 American Benefits Council survey may make employers feel better about the time, energy, and resources they spend administering their health plans.

The November 2017 survey shows that employees prefer high quality benefit programs over additional pay by a nearly 2‑to‑1 margin.  This is surprising because many people assume “cash-is-king.”  The survey demonstrates otherwise and highlights how important employer-provided health benefits are to employees.  Read More ›

Posted in Health & Welfare Plans | Tagged , , , ,

Share this Article:

IRS Announces Reduction in Family HSA Contribution Limit for 2018

In Revenue Procedure 2018-18, the Internal Revenue Service announced a reduction in the HSA contribution limit for family coverage in 2018 to $6,850 from $6,900.  The self-only HSA contribution limit for 2018 remains unchanged at $3,450.

This change is a technical result of the Tax Cuts and Jobs Act, which adjusted the method for calculating inflation. Although the reduction may appear somewhat small, it may cause certain employees to inadvertently contribute over the limit.  For instance, an employee who front-loads his or her annual contribution may have already exceeded the new limit.

The IRS has not issued any transition relief for excess contributions made in 2018 by employees relying on the original contribution limit announced in Revenue Procedure 2017-37Read More ›

Posted in Employee Benefits, Health & Welfare Plans, Health Care Reform | Tagged , , , , , ,

Share this Article:

Air Ambulance Services – What Does Your Plan Cover?

Due to the increased litigation of air ambulance claims, employers may want to review their plan language to see whether their group health plan covers air ambulance services, and if so, to better understand the terms of the coverage.

Below are three issues employers may want to consider:

  1. Expensive and Often Out-of-Network.  Air ambulance claims can be very expensive. While a 2014 report from the National Association of Insurance Commissioners (“NAIC”) indicates that the average air ambulance trip is 52 miles and costs between $12,000 to $25,000 per flight, recent litigation shows that these claims can go into the hundreds of thousands of dollars. 
Read More ›
Posted in Employee Benefits, Health & Welfare Plans | Tagged , , , ,

Share this Article:

Review of Qualified Plan Compensation Definition May be Needed Due To Tax Reform

Tax reform made few changes that directly impact qualified retirement plans; however, it made some changes that may indirectly impact qualified retirement plans.  We previously blogged on the indirect changes that tax reform had on hardship distributions. 

Tax reform also made changes to the taxation of certain fringe benefits that may impact the definition of “compensation” used in some qualified plans. Some qualified plans define compensation for plan purposes based on the taxability of a fringe benefit.  For example, a qualified plan may exclude from its definition of compensation “moving expenses, to the extent excluded from gross income.”  After tax reform, employers may no longer pay or reimburse moving expenses on a tax-free basis.  Read More ›

Posted in Employee Benefits, Qualified Retirement Plans | Tagged , , , , ,

Share this Article:

Short-Term Deferral Day is Right Around the Corner

Section 409A, the provision of the Internal Revenue Code that regulates the time and form of payment of nonqualified deferred compensation, contains a helpful exception for “short-term deferrals.”  Specifically, Section 409A provides that a payment will not be considered nonqualified deferred compensation if the employer makes the payment on or prior to the 15th day of the third month following the end of the employee’s (or, if later, the employer’s) taxable year in which the employee’s right to the payment vests.  For individuals and for employers with calendar fiscal years, the key date for purposes of the short-term deferral exception is March 15th (a little less than two weeks from today). Read More ›

Posted in Employee Benefits, Executive Compensation | Tagged , , , ,

Share this Article:

Congress Kicks the Can Down the Road Again – Cadillac Tax On High Cost Employer Health Coverage Delayed to 2022

Section 4980I, which was added to the Internal Revenue Code by the Affordable Care Act, was originally supposed to take effect in 2018.  This tax is commonly called the “Cadillac tax” because it imposes a 40% excise tax on high cost employer sponsored health coverage.

The Consolidated Appropriations Act signed into law on December 18, 2015, delayed the effective date of the Cadillac tax to 2020.  And now, in the federal spending bill that was signed into law on January 22, 2018, Congress has again kicked the can down the road with another two-year delay to 2022.  This is welcome news for most employers.  Read More ›

Posted in Employee Benefits, Health & Welfare Plans, Health Care Reform | Tagged , , , ,

Share this Article:

Hardship Distribution Changes – Tax Reform May Have Unintended Consequences

When tax reform proposals were floating around in the fall of 2017, several early proposals to the Tax Cuts and Jobs Act (the “Act”) included changes to the hardship distribution rules for qualified retirement plans. However, the final version of the Act did not make any direct changes to hardship distributions.  Nevertheless, the Act, perhaps unintentionally, made a significant change to the circumstances under which a participant can request a hardship for a personal casualty loss.

Personal Casualty Loss

The Act changed to the definition of a “personal casualty loss” under Section 165 of the Internal Revenue Code (the “Code”). Under the revised definition of 165, a personal casualty loss is only deductible if it is attributable to a federally declared disaster (i.e. Read More ›

Posted in Employee Benefits, Qualified Retirement Plans | Tagged , , , , ,

Share this Article:

Approaching Deadlines for Affordable Care Act Reporting

As we recently reported in our “2017 End of the Year Plan Sponsor To Do List,” applicable large employers must continue to submit to the IRS and to employees information regarding offers of health coverage made to full-time employees in 2017.

The IRS recently published Notice 2018-06 (the “Notice”), which contains some relief with respect to the required reporting.  In particular, the Notice extends the deadline to distribute Forms 1095-C to employees and continues the application of good faith transition relief.  The Notice does not extend the deadline for filing Forms 1094-C or 1095-C with the IRS.

Extension of Deadline to Furnish Forms 1095-C to Employees

The Notice extends the deadline for furnishing Forms 1095-C to employees from January 31, 2018 to March 2, 2018 Read More ›

Posted in Employee Benefits, Health & Welfare Plans, Health Care Reform | Tagged , , , , , ,

Share this Article: