New Disability Claims Regulations Take Effect for All Plans April 1, 2018

As noted in our previous blog post, The New Disability Claims Regulations: They Don’t Only Apply to Disability Plans, the Department of Labor (“DOL”) issued regulations that revise the ERISA claims procedure regulations for all employee benefit plans that provide disability benefits (the “New Regulations”).  These rules can impact not only short-term and long-term disability plans but also qualified retirement plans (e.g., a 401(k) plan), nonqualified retirement plans, and health and welfare plans.  The New Regulations were published in the Federal Register on December 19, 2016, and are based on the Affordable Care Act’s enhanced claims and appeals regulations for group health plans.  Read More ›

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IRS Publishes 2017 Required Amendments List

 

In our 2017 End of Year Plan Sponsor “To Do” List (Part 4) Qualified Plans, we suggested that sponsors of all qualified retirement plans should be on the lookout for the Internal Revenue Service’s (“IRS”) 2017 Required Amendments List (“RA List”).  The IRS recently published Notice 2017-72, which contains the 2017 RA List, https://www.irs.gov/pub/irs-drop/n-17-72.pdf

Part A of the RA List addresses changes in qualification requirements that require amendments to most plans (or to the types impacted by the change).  The 2017 RA List contains two changes in Part A:  those required by final regulations regarding cash balance/hybrid plans and those that address benefit restrictions for certain defined benefit plans that are eligible cooperative plans or eligible charity plans described in Section 204 of the Pension Protection Act of 2006, as amended.  Read More ›

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Making a List, Checking it Twice – 2017

It’s that time of year when boys and girls start making their lists for the holidays, but we in the employee benefits world make a very different kind of list.  In the rapidly changing world of employee benefits and executive compensation law, checklists can be particularly helpful to make sure important issues do not fall through the cracks.  Each year we publish health and welfare, cost-of-living, executive compensation, and qualified retirement plan checklists to help individuals stay apprised of changes in the law, changes that they might need to make to their employee benefits plans, and various notice requirements.  We just published the last of our annual checklists.  Read More ›

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IRS to Begin Enforcing 4980H Penalties on Large Employers Before End of 2017

On November 2, 2017, the IRS issued guidance regarding the enforcement of Employer Shared Responsibility payments, otherwise known as the Section 4980H penalty. Questions 55-58 of the IRS Questions and Answers on Employer Shared Responsibility Provisions Under the Affordable Care Act indicate that the IRS is moving forward with assessing penalties on Applicable Large Employers (“ALEs”) who failed to offer appropriate health care coverage under Section 4980H for the 2015 calendar year.

An ALE is generally an employer who employs at least 50 full-time employees during the calendar year. An ALE will be assessed a penalty for the 2015 year if any full-time employee received a premium tax credit or cost-sharing reduction and either: (a) the employer failed to provide minimum essential health coverage to 95% of its full-time employees; or (b) the employer offered minimum essential health coverage to 95% of its full-time employees, but the coverage was not affordable or did not provide minimum value. Read More ›

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IRS Announces 2018 Cost of Living Adjustments

The IRS recently announced cost-of-living adjustments for 2018 in Notice 2017-64 and related guidance.  The key dollar limits for qualified retirement plans and health and welfare plans are noted below.

Qualified Retirement Plan Dollar Limits

  2017 2018
Limit on Section 401(k) deferrals (Section 402(g)) $18,000 $18,500
Dollar limitation for catch-up contributions (Section 414(v)(2)(B)(i)) $6,000 $6,000
Limit on deferrals for government and tax-exempt organization deferred compensation plans (Section 457(e)(15)) $18,000 $18,500
Annual benefit limitation for a defined benefit plan (Section 415(b)(1)(A)) $215,000 $220,000
Limitation on annual contributions to a defined contribution plan (Section 415(c)(1)(A)) $54,000 $55,000
Limitation on compensation that may be considered by qualified retirement plans (Section 401(a)(17)) $270,000 $275,000
Dollar amount for the definition of highly compensated employee (Section 414(q)(1)(B)) $120,000 $120,000
Dollar amount for the definition of a key employee in a top-heavy plan (Section 416(i)(1)(A)(i)) $175,000 $175,000
Dollar amount for determining the maximum account balance in an ESOP subject to a five-year distribution period (Section 409(o)(1)(C)(ii)) $1,080,000 $1,105,000
SIMPLE retirement account limitation (Section 408(p)(2)(E)) $12,500 $12,500
Social Security Taxable Wage Base $127,200 $128,700

Health and Welfare Plan Dollar Limits

  2017 2018
Annual Cost Sharing Limit (self-only coverage) $7,150 $7,350
Annual Cost Sharing Limit (other than self-only coverage) $14,300 $14,700
HDHP Out-of-Pocket Maximum (self-only coverage) $6,550 $6,650
HDHP Out-of-Pocket Maximum (family coverage) $13,100 $13,300
Annual HDHP Deductible (self-only coverage) Not less than $1,300 Not less than $1,350
Annual HDHP Deductible (family coverage) Not less than $2,600 Not less than $2,700
Maximum Annual HSA Contributions (self-only coverage) $3,400 $3,450
Maximum Annual HSA Contributions (family coverage) $6,750 $6,900
Maximum HSA Catch-Up Contribution $1,000 $1,000
Health Flexible Spending Account Maximum $2,600 $2,650

  Read More ›

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Wellness Incentives Under Scrutiny After District Court Decision

In the most recent updates to the AARP v. EEOC wellness case (AARP v. EEOC, D.D.C., No. 1:16-cv-02113), the District Court for the District of Columbia has ordered the Equal Employment Opportunity Commission (“EEOC”) to review the wellness regulations related to the Genetic Information Nondiscrimination Act (“GINA”) and the Americans with Disabilities Act (“ADA”) with respect to the amount of incentives that an employer may provide under a wellness program.

The ADA and GINA both permit the collection of certain health information by an employer so long as the disclosure is “voluntary.” However, neither the ADA nor GINA provides a definition of what is considered “voluntary.”  In May of 2016, the ADA and GINA wellness regulations were finalized and provide, in relevant part, that a wellness program can offer incentives or penalties of up to 30% of the cost of self-only coverage. Read More ›

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The New Disability Claims Regulations: They Don’t Only Apply to Disability Plans

Introduction

The Department of Labor (“DOL”) issued regulations that revise the ERISA claims procedure regulations for employee benefit plans that provide disability benefits (the “New Disability Claims Regulations” or “New Regulations”).  They are based on the Affordable Care Act’s (the “ACA”) enhanced claims and appeals regulations for group health plans (the “ACA Enhanced Regulations”).  The scope of the New Regulations are broader than you may  realize and apply to any plan, regardless of how it is characterized, that provides benefits or rights that are contingent on whether the plan determines an individual to be disabled.  This can include ERISA governed short-term disability plans, long-term disability plans, qualified retirement plans (e.g., a 401(k) plan), nonqualified retirement plans, and health and welfare plans.  Read More ›

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Transgender Benefits Revisited?

In a series of tweets published on July 26, 2017, President Trump announced a ban on transgender service in the armed forces.  In the wake of this reversal of government policy, employers may question the current state of transgender benefits and whether additional changes are forthcoming.

On May 18, 2016, the Department of Health and Human Services (“HHS”) issued final regulations implementing the nondiscrimination provisions of the Affordable Care Act (“Section 1557”), which prohibit, in part, the categorical refusal of coverage to transgender participants and require that individuals be treated consistent with their self-selected gender identity.  As a result of these changes, many employer group health plans started covering an array of transgender benefits ranging from mental health counseling to gender reassignment surgery. Read More ›

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Open Enrollment Looms and ACA Changes are Uncertain – What are Employers to Do?

On the morning of July 28, 2017, another effort to repeal or replace the Affordable Care Act (“ACA”) failed in a 49-51 Senate vote when three Republican senators voted against the bill. Attempts to pass even a trimmed down “skinny” version of the bill were unsuccessful.  Following this dramatic vote, the path forward for health care reform is as uncertain as ever.

With fall open enrollment fast approaching, employers may be wondering what actions to take with respect to their health plans. Given the uncertainty of whether changes will be made to the ACA before open enrollment, employers may wish to proceed as though the ACA will remain in effect for 2018. Read More ›

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Recent Mental Health Parity Guidance — A Good Reminder to Review Your Health Plan for Compliance

The Mental Health Parity and Addiction Equity Act of 2008 (“MHPAEA”) generally requires that the financial requirements and treatment limitations that apply to mental health and substance use disorder (“MH/SUD”) benefits cannot be more restrictive than the financial requirements and treatment limitations that apply to medical and surgical (“M/S”) benefits.  Financial requirements include, for example, deductibles and coinsurance.  Treatment limitations can be quantitative (e.g., limits on the number of days or visits covered under the plan) or non-quantitative (“NQTL”) (e.g., requiring participants to obtain prior authorization before treatment).

The MHPAEA and its implementing regulations also require plan administrators to provide various disclosures upon request regarding MH/SUD benefits.  Read More ›

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