Full Steam Ahead: IRS Moves Forward to Collect Affordable Care Act Penalties

As efforts to reform the Affordable Care Act (the “ACA”) stall in Congress, a recent government report suggests that the Internal Revenue Service is preparing to identify and collect employer shared responsibility penalties.

The Treasury Inspector General for Tax Administration issued the report, Affordable Care Act: Assessment of Efforts to Implement the Employer Shared Responsibility Provision, two weeks after House leadership retracted a bid to repeal and replace the ACA.

The report indicates that the IRS processed over 400,000 Forms 1094-C (Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns) and nearly 110 million Forms 1095-C (Employer-Provided Health Insurance Offer and Coverage) as of last October.  Read More ›

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

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The Official Delay of the Fiduciary Rule: A Compromise

On April 7, 2017, the DOL published a final rule, officially delaying the applicability of the Fiduciary Rule for 60 days, until June 9, 2017.

The DOL noted that a full review of the Fiduciary Rule and its impact is likely to take longer than 60 days. However, the DOL expressed reservations about providing a more extended delay of the application of the Rule, given the Department’s prior findings of harm to retirement investors.  Consequently, the final rule on the delay results in somewhat of a compromise.

Specifically, the DOL extended the applicability date for the Fiduciary Rule, the BIC Exemption, and the Principal Transactions Exemption for 60 days. Read More ›

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

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IRS Warns Employers of Dangerous Email Scam

The IRS has recently warned employers of another scam targeting employee information. The IRS has learned that scammers are posing as internal executives and are requesting Forms W-2 and Social Security Numbers from payroll or human resources departments.  The scammers may even initiate contact with a “Hi, are you in today” message before requesting the Forms W-2 and Social Security numbers.  It appears that scammers are using this information to file fraudulent tax returns and claim tax refunds in the names of the victims.

The target for the most recent scam is employers, including tax exempt entities, universities and schools, government and private sector businesses. Read More ›

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Update – A Rule Deferred: Department of Labor Delays Implementation of Fiduciary Rule

As we previously reported in our February 16, 2017 blog post, “A Rule Deferred: Department of Labor Delays Implementation of Fiduciary Rule,” the DOL anticipated delaying the effective date of the fiduciary rule by 180 days.  However, on March 1, 2017, the DOL proposed to delay the fiduciary rule by 60 days, citing the potentially high costs of further delay.

The fiduciary rule was originally scheduled to become effective April 10, 2017. The new proposal would delay the rule’s applicability until June 9, 2017.

The DOL will accept public comments on the proposal to extend the applicability date for a period of 15 days, through March 17, 2017. Read More ›

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HIPAA Checkup – How Good Are Your Policies and Procedures?

Although it is not a new requirement, it is important and therefore worth a reminder:  HIPAA requires covered entities to establish and implement written policies and procedures that are consistent with its Privacy and Security Rules.

As discussed in an earlier blog, the U.S. Department of Health and Human Services, Office for Civil Rights (“OCR”) has begun its Phase 2 HIPAA Audit Program.  The Program will focus on the policies and procedures adopted and employed by covered entities and their business associates to meet the requirements of the Privacy, Security, and Breach Notification Rules.  Furthermore, if a group health plan is selected for an audit, it would have a very short time to produce its policies and procedures (i.e., 10 business days).  Read More ›

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Did Hardship Distributions Just Get Easier?

In a previous blog, we addressed an issue of Employee Plans News in which the IRS took the position that 401(k) plan administrators must maintain hardship distribution records and should not rely on electronic participant self-certification for hardship distributions.

On February 23, 2017, the IRS issued a memorandum to its Employee Plans Examiners that sets forth substantiation guidelines for the examination of 401(k) hardship distributions.  The memorandum provides that a plan administrator may maintain either of the following to establish a participant’s need for a hardship distribution: (1) source documents that support the need for the hardship distribution or (2) a summary of the information contained in the source documents. Read More ›

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A Rule Deferred: Department of Labor Delays Implementation of Fiduciary Rule

As we previously discussed in our May 19, 2016 SW Benefits Update, the Department of Labor (the “Department”) previously issued final regulations on fiduciary conflicts of interest in retirement programs.  The rules, which focus on curbing self-interested advice to retirement plan and IRA participants, were slated to become effective April 10, 2017.

However, the Department has proposed a delay to the rules of at least 180 days beyond the original effective date and will seek public comment on the rules.  The proposed deferral arises from an executive memorandum dated February 3, 2017, in which President Trump instructs the Department to conduct an “updated economic and legal analysis concerning the likely impact of the fiduciary rule.”  That memorandum signals that the fiduciary rule “may not be consistent with the policies of [the Trump] Administration.”  Accordingly, the fate of the rules in their present form remain uncertain. Read More ›

Posted in Employee Benefits

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Trumping the Affordable Care Act? Not So Fast – Impact of Executive Order on Employers Unclear

On January 20, 2017, President Trump signed an Executive Order (“Minimizing the Economic Burden of the Patient Protection and Affordable Care Act Pending Repeal,” hereinafter referred to as the “Order”) relating to the future of the Affordable Care Act (“ACA”).  The stated goal is to direct the agencies (IRS, HHS, and DOL) to waive or defer provisions of the ACA that would “impose a fiscal burden on any State or a cost, fee, tax, penalty, or regulatory burden on individuals, families, healthcare providers, health insurers, patients, recipients of healthcare services, purchasers of health insurance, or makers of medical devices, products or medications.”  Notoriously absent from this list is any mention of employers or plans.  Read More ›

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IRS Issues First Required Amendments List for Qualified Plans

In a previous blog, we discussed the IRS’ elimination of its five year staggered determination letter cycle for individually designed plans.  The IRS recently provided guidance to help sponsors of individually designed plans keep their plans in compliance with applicable law.  Notice 2016-80 contains the first Required Amendments List (the “RA List”) for individually designed qualified retirement plans.  In general, the RA List is a list of changes in the plan qualification requirements for changes that became effective in 2016.  The list is divided into two parts—(A) changes in qualification requirements that would generally require an amendment to most plans  or to most plans of the type affected by the change and (B) changes that the IRS and Treasury anticipate will not require an amendment in most plans, but might require an amendment due to an unusual provision in a particular plan.  Read More ›

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Certain Information Statements for ISOs and ESPPs Due by January 31, 2017

As reported in Part 1 of our 2016 End of Year Plan Sponsor “To Do” List, Section 6039 of the Code requires employers to provide a written information statement to each employee or former employee and file information returns with the IRS regarding: (1) the transfer of stock pursuant to the exercise of an Incentive Stock Option (“ISO”); and (2) the first transfer by the employee or former employee of stock purchased at a discount under an Employee Stock Purchase Plan (“ESPP”).  For ISO exercises and ESPP transfers occurring in 2016, the Section 6039 employee information statement requirement is satisfied by providing Form 3921 (for ISOs) and Form 3922 (for ESPPs) to employees no later than January 31, 2017Read More ›

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