News Items

"The IRS continues to aggressively audit how free meals and snacks offered to employees in many workplaces are treated for federal tax purposes.... Technical Advice Memorandum 201903017 ... is essentially the first guidance on employer-provided meals and snacks that the IRS has published in nearly two decades.... Employers with free or subsidized food and snack programs should consider implementing various design, operational, and recordkeeping policies and practices that align with current IRS views, as set out in the TAM[.]"

"After approval of the claim request for benefits, a seven calendar day waiting period applies to the initial claim for benefits, which counts against the total available period of leave allowable in a calendar year.... Certain types of leave may be taken on an intermittent basis. The quantity of intermittent leave proportionately reduces the employee's available leave allotment and the weekly benefits reduce in direct proportion to the intermittent leave."

"[T]he first step toward success in managing pension portfolios is to clearly identify the plan's ultimate objective (e.g., managing the plan in perpetuity, or partial or full termination) and to translate that objective into a measurable goal ... [This article describes] a required return and surplus volatility framework that can assist plan sponsors in shaping their asset allocations to help them achieve plan objectives."

19 pages. "This report provides an overview of paid family leave in the United States, summarizes state-level family leave insurance programs, notes PFL policies in other advanced-economy countries, and notes recent federal legislative action to increase access to paid family leave." [Report R44835, updated May 29, 2019]

"The proposed rule would entirely eliminate: [1] The definitions section of the current rule ... [2] Specific nondiscrimination protections based on sex, gender identity, and association; [3] Major language access requirements ... [4] Notice requirements that require covered entities to post information about Section 1557 and nondiscrimination at its locations and on its website; [5] Requirements to have a compliance coordinator and written grievance procedure to handle complaints about alleged violations of Section; and [6] Various enforcement-related provisions [.]"

"PFL provided time to arrange child care, recover from pregnancy and childbirth, bond with the baby and help him transition to nonparental care, and initiate and maintain breastfeeding. Mothers cited limitations to the program, but valued the time to care for their baby and plan their return to work."

"The median, or midpoint, of annual household spending on employer insurance premium contributions ranged from $500 (Hawaii) to $3,400 (South Dakota) in 2016-2017. In 11 states, households in the top 10 percent of spending on premium contributions paid $9,000 or more.... Median annual out-of-pocket spending on medical care ranged from $360 (Hawaii) to $1,500 (Nebraska). In four states, households in the top 10 percent of out-of-pocket expenses spent $7,000 or more on these items.... The median amount spent on both premiums and out-of-pocket costs ranged from $1,500 (Hawaii) to $5,540 (South Dakota)."

"The benefits offered to employees by the approved plan must be greater than or equal to the benefits provided by MAPFML.... Self-insured plans must be bonded.... Fully-insured plans must be covered by policy issued by a Massachusetts licensed insurance company.... There are penalties for noncompliance.... Employer must maintain an 'adequate security deposit'.... Plan changes must be reported.... It doesn't get an employer out of everything.... Major plan updates are required.... The application process is tedious and an exemption must be renewed annually.... here are many questions about Q1 2019.... Is an exempt plan subject to ERISA? ... It may not save money.... Alternative Approaches."

"Before rushing off to fix an apparent error, first be sure you actually have one.... The error may be in the underlying data sent to the payroll/reporting vendor or an error in their system. In other cases, it may not be a true error, but may be a difference of interpretation in how the IRS codes should be applied on the forms.... Depending on the error, you may want to review forms filed in earlier and/or later years to see if there are similar errors in those forms."

"[A] bipartisan group of senators [has] released new legislation to address surprise medical bills ... by prohibiting balance billing for categories of services where surprise bills commonly arise and prescribing an initial payment from insurers tied to median in-network rates, with the option for providers or insurers to initiate an arbitration process to challenge this rate. By tying automatic payment to the insurer's median in-network rate ... the [STOP Surprise Medical Bills Act] could reduce health care costs as well, although the existence of arbitration as a backstop makes that uncertain."

"[1] People are saving more than ever.... [2] Retirement savings are higher than they ever have been.... [3] Retirees say that they're doing fine.... [4] The poverty rate for retirees is falling.... [5] Coverage by traditional pensions was not that high in their 'golden age.' ... [6] Social Security benefits are more adequate than you think.... [8] The way Social Security is fixed can have a significant effect on the economy.... [9] U.S. retirement plan assets are far larger than other countries'.... [10] Seniors' out-of-pocket health spending is not eating that much more of their incomes.... [11] Pension plans are not a bellwether.... [12] Retirement inequality has not worsened due to the shift from traditional pensions to 401(k)s.... [13] The real gap in retirement savings is in government."

"By all accounts, 2019 will see the advancement of a number of fiduciary and best interest investment advice regulations at both the federal and state levels. Firms subject to these regulations will face challenges in dealing with rules that will impose a host of new obligations, and that may overlap and conflict with one another. This [6-page] chart is intended to help firms take stock of the evolving framework and aid firms in putting the pieces together"

40 pages. "This report provides a general overview of the Medicare program including descriptions of the program's history, eligibility criteria, covered services, provider payment systems, and program administration and financing. A list of commonly used acronyms, as well as information on beneficiary cost sharing, may be found in the appendices." [Report no. R40425, updated May 20, 2019]

"OCR's new FAQs extend upon this discussion of the business associate relationship between a covered entity and app developer, and highlight the vicarious liability faced by a covered entity if and when an impermissible use or disclosure of ePHI involves the app. The new FAQs reiterate that if the app was not provided by or on behalf of the covered entity, then the covered entity will not be liable for a breach of any information later experienced by the app. However, if the app was developed for, or provided for or on behalf of, the covered entity, then the covered entity could be held responsible for an impermissible use or disclosure of the ePHI in the app."

"[T]he stop-loss market stands at approximately $20 billion in premium... [W]hile premium is relatively evenly spread across deductibles ranging from $75,000 to $500,000, a significant number of policies are sold with deductibles below $75,000, and some with deductibles as high as $1 million."

"Set forth [in this article] are the key issues relevant to establishing a reasonable, good faith position under Notice 2019-09 that the Section 4960 excise tax should not apply to volunteer officers of a [private foundation (PF)] who receive all of their compensation from taxable organizations related to such PF. What is important to understand is that the Section 4960 excise tax only applies if volunteer officers are treated as employees of the related PF. Whether an employee relationship exists is a facts and circumstances test, and having someone serve as an officer to meet state law nonprofit corporation requirements does not result, by itself, in employee status."

"When a sponsor terminates an overfunded DB plan and buys annuities to settle plan liabilities ... [1] Plan liabilities may have to be written up, reducing net worth. [2] That write-up typically will have to be run through the income statement, generating a (non-recurring) expense and reducing net income. [3] Unrecognized losses may also have to be run through the income statement.... [4] Any 'pension income' generated by the plan surplus will disappear -- reducing future net income. These financial hits -- particularly for earnings sensitive companies -- may make the cost of terminating an overfunded plan prohibitive."

65 pages. "The Senate Committee on Finance has scheduled a public hearing on May 14, 2019, on Challenges in the Retirement System. This document ... provides a discussion of present law and data." Topics: [1] Present law: Tax-favored employer-sponsored retirement plans; Defined contribution plans; Individual Retirement Arrangements (IRAs); and Early distributions and required minimum distributions. [2] Data relating to retirement savings: Overview; General data on qualified retirement plan participation; Data related to Social Security benefits as a source of retirement income; and Assets held outside of qualified plans and IRAs.

"Various factors -- the timing between the funding of the annuity purchase and the purchase itself ... the quality of plan data ... or the discovery of additional liabilities or plan assets -- can influence the annuity contract purchase price. To the extent assets remain in a plan following the purchase of an annuity, recovering those amounts can be costly -- and may not even be possible -- unless the sponsor can show the amounts were contributed due to an erroneous actuarial computation or mistake of fact."

"In late 2018, the Auditing Standards Board (ASB) voted to issue a final balloted draft of SAS 13X, which addresses the auditor's responsibility to form an opinion and report on the audit of financial statements of employee benefit plans subject to [ERISA]. It also addresses the form and content of the auditor's report issued as a result of an audit of ERISA plan financial statements.... For some auditors, this clarification reinforces the previously elusive notion that testing is necessary to issue an unmodified opinion, even in a 103(a)(3)(C) audit."

21 pages. "The Social Security trust funds represent funds dedicated to pay current and future Social Security benefits. However, it is useful to view the trust funds in two ways: [1] as an internal federal accounting concept and [2] as the accumulated holdings of the Social Security program.... This report covers how the Social Security program is financed and how the Social Security trust funds work." [Report FL33028, updated May 8, 2019]

"America spends about $460 billion a year on these drugs, roughly as much as the combined revenues of the top three car makers.... Tracking the money challenges the savviest of analysts. Between the drugmakers and the patients lie an array of middlemen, who end up masking the true prices through discounts to one another and rebates to patients. Here are a few benchmarks to help you navigate the realm of prescription drugs."

18 pages. "This report provides an overview of Social Security financing and benefits under current law. Specifically, the report covers the origins and a brief history of the program; Social Security financing and the status of the trust funds; how Social Security benefits are computed; the types of Social Security benefits available to workers and their family members; the basic eligibility requirements for each type of benefit; the scheduled increase in the Social Security retirement age; and the federal income taxation of Social Security benefits." [Report R42035, updated May 7, 2019]

"The notice includes important final rules and parameters for the operation of the individual and small group health insurance markets in both 2020 and potentially 2021. This paper summarizes key provisions of the final notice, and other related information recently released by HHS."

32 pages. "This advisory describes ERISA and DOL record retention requirements, protecting personally identifiable information, the effect of inadequate records on audit scope and testing and the auditor's report, and the implications to the plan administrator for failure to properly retain records. The advisory also provides suggestions for best practices for record retention and data protection and additional resources."