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Welcome to the Snell & Wilmer Benefits Blog. We will be posting about current employee benefits and executive compensation topics and issues. We invite you to contact the authors with your thoughts or questions.Blog Contributors
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Enjoy the End of the Decade with Some Employee Benefit Plan Checklists
Each year, we publish health and welfare, cost-of-living, qualified retirement plan, and executive compensation plan checklists to help individuals and employers stay apprised of updates to the law of employee benefits. We just published the last of these annual checklists. In case you missed them, the links are below.
Happy Holidays!
2019 End of Year Plan Sponsor “To Do” List (Part 1) Health & Welfare
2019 End of Year Plan Sponsor “To Do” List (Part 2) Annual Cost of Living Adjustments
2019 End of Year Plan Sponsor “To Do” List (Part 3) Qualified Retirement Plans
2019 End of Year Plan Sponsor “To Do” List (Part 4) Executive Compensation
Posted in Employee Benefits, Executive Compensation, Health & Welfare Plans, Health Care Reform, Qualified Retirement Plans
| Tagged checklists, COLA, cost-of-living, ERISA, Executive Compensation, Internal Revenue Code, qualified retirement plan, to do list
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A Post-Thanksgiving Treat: IRS Extends Certain ACA Reporting Deadlines and Transition Relief
The IRS provided welcome news to employers preparing to comply with the Affordable Care Act’s (“ACA”) information reporting requirements in early 2020 for the 2019 calendar year. In particular, Notice 2019-63 (the “Notice”) extends the deadline to furnish Forms 1095-B and 1095-C to employees. The new deadlines are provided, below.
| Original Deadline | Extended Deadline | |
| Form 1095-B (to employees) | January 31, 2020 | March 2, 2020 |
| Form 1095-C (to employees) | January 31, 2020 | March 2, 2020 |
Importantly, the Notice does not extend the deadline for filing Forms with the IRS. Instead, the deadline to file with the IRS remains February 28, 2020 (for paper filings) and March 31, 2020 (for electronic filings). Read More ›
Posted in Health & Welfare Plans, Health Care Reform
| Tagged ACA, deadlines, extension, Form 1095-B, Form 1095-c, good faith, notice 2019-63, reporting
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Form 5500 Penalty Relief Deadline Approaching for MEPs
On July 24, 2019, the Department of Labor (the “DOL”) issued Field Assistance Bulletin 2019-01 (the “Bulletin”), which provides transition relief to multiple employer plans (“MEPs”) that failed to comply with certain annual reporting requirements.
The Bulletin focuses on a Form 5500 reporting requirement added by the Cooperative and Small Employer Charity Pension Flexibility Act, which requires MEPs to report on the Form 5500 all participating employers and an estimate of the percentage of contributions made by participating employers during the plan year. This disclosure requirement first became effective for plan years beginning after December 31, 2013.
The DOL has identified widespread and ongoing failure by MEPs to comply with the above reporting requirement. Read More ›
Posted in Employee Benefits, Qualified Retirement Plans
| Tagged compliance, Form 5500, MEP, multiple employer plan, participating employer, transition relief
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Reassigning Section 1557: Trump Administration Proposes Reversal of Transgender Benefits Rule
In 2016, the Department of Health and Human Services (“HHS”) Office of Civil Rights issued final regulations implementing the nondiscrimination provisions of the Affordable Care Act (“Section 1557”), which prohibit the categorical refusal of health coverage to transgender participants and require that individuals be treated consistent with their self-selected gender identity. These regulations drew sustained legal challenges and prompted HHS to withdraw, revise and reissue the Section 1557 regulations (the “Proposed Regulations”).
In short, the Proposed Regulations would repeal large portions of the original nondiscrimination rules and would redefine the scope of various protections under Section 1557. Specifically, the Proposed Regulations negate the provisions of Section 1557 covering nondiscrimination based on sex and gender identity. Read More ›
Posted in Employee Benefits, Health & Welfare Plans, Health Care Reform
| Tagged 1557, ACA, EEOC, HHS, transgender, transgender benefits, Trump
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Reopening the Floodgates: IRS Announces Expanded Determination Letter Program
As we previously reported, the Internal Revenue Service (the “Service”) scaled back its determination letter program for individually designed retirement plans effective as of January 1, 2017. In the intervening years, the Service received a multitude of comments requesting the reopening of the program.
Now, the Service has decided to offer a limited expansion of the determination letter program as outlined in Revenue Procedure 2019-20 (the “Revenue Procedure”). In particular, the Revenue Procedure provides that the Service will accept determination letter applications for both individually designed statutory hybrid plans and individually designed merged plans.
Hybrid Plans
The Revenue Procedure indicates that plan sponsors may submit determination letter applications for individually designed statutory hybrid plans during the twelve-month period beginning September 1, 2019 and ending August 31, 2020. Read More ›
Posted in Employee Benefits, Qualified Retirement Plans
| Tagged determination letter, dl program, hybrid plan, merged plan, revenue procedure 2019-20
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Seeing the Big Picture – How Proposed Health Reimbursement Arrangements Might Harmonize with Existing Law
On October 29, 2018, proposed regulations were published in the Federal Register that would permit employers to offer two new types of health reimbursement arrangements (“HRAs”) that align with the requirements of the Affordable Care Act (the “ACA”). The proposed HRAs are designed to expand the availability of account-based group health plans. A summary of the proposed regulations – and the HRAs that they would permit if finalized – can be found in our November 7, 2018, blog, “Zombie Benefits – Are Health Reimbursement Arrangements Back from the Dead?”
As an addendum to the proposed regulations, the IRS published Notice 2018-88, which considers the interaction of the new HRAs with the employer shared responsibility mandate set out in Code Section 4980H and the non-discrimination rules contained in Code Section 105(h). Read More ›
Posted in Employee Benefits, Health & Welfare Plans, Health Care Reform
| Tagged 2018-88, 4980H, ACA, HRA, IRS, Notice
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A Holiday Surprise – IRS Extends Certain ACA Reporting Deadlines and Transition Relief
The IRS delivered welcome news to employers preparing to meet the Affordable Care Act’s (“ACA”) information reporting deadlines in early 2019 for the 2018 calendar year. In Notice 2018-94 (the “Notice”), the IRS extended the employer’s deadline to furnish Forms 1095-B and 1095-C to employees. The new deadlines are provided below.
| Original Distribution Deadline | Extended Distribution Deadline | |
| Form 1095-B (to employees) | January 31, 2019 | March 4, 2019 |
| Form 1095-C (to employees) | January 31, 2019 | March 4, 2019 |
It is important to note that the Notice does not extend the deadline for filing Forms with the IRS. The deadline to file with the IRS remains February 28, 2019 (for paper filings) and April 1, 2019 (for electronic filings). Read More ›
Posted in Employee Benefits, Health & Welfare Plans, Health Care Reform
| Tagged 4980H, ACA, extension, reporting
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Making Limits Greater Again – IRS Issues Guidance on Cost of Living Adjustments
|
The IRS recently announced cost-of-living adjustments for 2019 in Notice 2018-83 and related guidance. The key dollar limits for qualified retirement plans and health and welfare plans are noted below. Qualified Retirement Plan Dollar Limits |
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| 2018 | 2019 | |
| Limit on Section 401(k) deferrals (Section 402(g)) | $18,500 | $19,000 |
| 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)) | $18,500 | $19,000 |
| Annual benefit limitation for a defined benefit plan (Section 415(b)(1)(A)) | $220,000 | $225,000 |
| Limitation on annual contributions to a defined contribution plan (Section 415(c)(1)(A)) | $55,000 | $56,000 |
| Limitation on compensation that may be considered by qualified retirement plans (Section 401(a)(17)) | $275,000 | $280,000 |
| Dollar amount for the definition of highly compensated employee (Section 414(q)(1)(B)) | $120,000 | $125,000 |
| Dollar amount for the definition of a key employee in a top-heavy plan (Section 416(i)(1)(A)(i)) | $175,000 | $180,000 |
| Dollar amount for determining the maximum account balance in an ESOP subject to a five-year distribution period (Section 409(o)(1)(C)(ii)) | $1,105,000 | $1,130,000 |
| SIMPLE retirement account limitation (Section 408(p)(2)(E)) | $12,500 | $13,000 |
| Social Security Taxable Wage Base | $128,700 | $132,900 |
|
Health and Welfare Plan Dollar Limits |
||
| 2018 | 2019 | |
| Annual Cost Sharing Limit (self-only coverage) | $7,350 | $7,900 |
| Annual Cost Sharing Limit (other than self-only coverage) | $14,700 | $15,800 |
| HDHP Out-of-Pocket Maximum (self-only coverage) | $6,650 | $6,750 |
| HDHP Out-of-Pocket Maximum (family coverage) | $13,300 | $13,500 |
| Annual HDHP Deductible (self-only coverage) | Not less than $1,350 | Not less than $1,350 |
| Annual HDHP Deductible (family coverage) | Not less than $2,700 | Not less than $2,700 |
| Maximum Annual HSA Contributions (self-only coverage) | $3,450 | $3,500 |
| Maximum Annual HSA Contributions (family coverage) | $6,900 | $7,000 |
| Maximum HSA Catch-Up Contribution | $1,000 | $1,000 |
| Health Flexible Spending Account Maximum | $2,650 | $2,700 |
Posted in Employee Benefits
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A New Perspective on Student Loan Repayment Benefits
On August 17, 2018, the Internal Revenue Service (the “Service”) published a Private Letter Ruling (the “PLR”) describing a unique student loan repayment program in the context of a qualified retirement plan.
Proposed Student Loan Repayment Program
As described in the PLR, an Employer sponsors a Section 401(k) defined contribution plan that permits elective deferrals. The plan requires the Employer to make a matching contribution equal to 5% of an eligible employee’s compensation for a given pay period if such employee makes an elective contribution of at least 2% of his or her compensation during the same period.
The Employer proposed to amend the plan to incorporate a student loan repayment program (the “Program”). Read More ›
Posted in Employee Benefits, Qualified Retirement Plans
| Tagged 401(k), defined contribution, PLR, repayment, student loan, student loan benefit
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The 95 Percent Test: Gearing up for Another Round of Employer Shared Responsibility Penalties
Late last year, the Internal Revenue Service (the “Service”) began enforcing penalties with respect to failures to comply with the employer shared responsibility provisions of Section 4980H of the Internal Revenue Code. In the coming months, the Service is expected to begin assessing penalties with respect to such failures occurring in calendar year 2016. These penalties are of two varieties:
- Section 4980H(a) penalties are assessed for any month in which an applicable large employer (“ALE”) does not offer minimum essential coverage to substantially all (95% for 2016 and future years) of its full-time employees and their dependents and at least one full-time employee receives a premium tax credit.
Posted in Employee Benefits, Health & Welfare Plans, Health Care Reform
| Tagged 4980H, ACA, ALE, IRS, letter 226j, penalties
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