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<< Older News  |  September 18, 2021

News

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Editor's Pick Determining Full-Time Employee Status for Purposes of the ACA Employer Shared Responsibility Provisions (PDF)
Gallagher Link to more items from this source
[Guidance Overview]
Sept. 17, 2021

23 pages. "The focus of this article is on determining employee status for purposes of the Employer Mandate penalty calculations, not on determining employee status for purposes of determining employer size."

Tags: Health Plan Administration

Editor's Pick Comparison Chart for Reimbursement Health Accounts: FSA, HSA, and HRA (PDF)
TRI-AD Link to more items from this source
Sept. 17, 2021

2-page chart provides side-by-side comparison of multiple aspects of each type of account.

Tags: Cafeteria Plans  •  HRAs  •  HSAs  •  Health Plan Design

Editor's Pick Imposing Group Health Plan Monthly Surcharges on the Unvaccinated
Mintz Link to more items from this source
Sept. 16, 2021

"While efforts to impose workplace vaccine mandates are not new (and only heating up), Delta's approach based on an economic incentive has caused some to ask whether it is permitted under applicable law. This post explores that question."

Tags: Coronavirus (COVID-19)  •  Health Plan Design

Editor's Pick CRS Report: Social Security Primer (PDF)
Congressional Research Service [CRS] Link to more items from this source
Sept. 15, 2021

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." [R42035, updated Sep. 15, 2021]

Tags: Social Security

Editor's Pick Non-Federal Governmental Plans and MHPAEA Comparative Analysis Reviews (PDF)
Center for Consumer Information and Insurance Oversight [CCIIO], Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS] Link to more items from this source
[Guidance Overview]
Sept. 14, 2021

27 presentation slides. "The purpose of this presentation is to: [1] Provide an overview of the provisions related to the Mental Health Parity and Addiction Equity Act (MHPAEA) added by the Consolidated Appropriations Act, 2021 (CAA); [2] Discuss how the new provisions apply to non-Fed plans; and [3] Introduce MHPAEA resources and compliance tools."

Tags: Consolidated Appropriations Act, 2021   •  Health Plan Administration  •  Health Plan Design

Editor's Pick Defined Contribution Plans: Challenges and Opportunities for Plan Sponsors
Jeffery V. Bailey, CFA, and Kurt D. Winkelmann, for CFA Institute Research Foundation Link to more items from this source
Sept. 14, 2021

176 pages. "[This publication is a] primer to help plan sponsors and their advisers navigate the regulatory, legal, and practical opportunities and challenges that they face in their highly technical, multifaceted, and supremely important roles.... [It includes] a step-by-step guide to thinking through a plan's delivery, participants' needs, and the challenges of being a fiduciary ... [and an extensive discussion of] the hiring and retention of investment managers, with special attention paid to fees[.]"

Tags: Fiduciary Duties  •  Retirement Plan Administration  •  Retirement Plan Design

Editor's Pick IRS Issue Snapshot: Calculation of Plan Compensation for Sole Proprietorships
Internal Revenue Service [IRS] Link to more items from this source
[Guidance Overview]
Sept. 13, 2021

"If nonelective contributions ... on behalf of a sole proprietor (the SEI) are determined under a plan's formula as a percentage of the sole proprietor's Earned Income, then the Earned Income calculation is dependent on the SEI's contribution, but the SEI's contribution is also dependent on the Earned Income."

Tags: Retirement Plan Administration

Editor's Pick IRS Issue Snapshot: Combined Limits Under Section 404(a)(7)
Internal Revenue Service [IRS] Link to more items from this source
[Guidance Overview]
Sept. 13, 2021

"If a DB plan and a DC plan have overlapping coverage and employer contributions to the DC plan (other than elective deferrals defined under IRC Section 402(g)) do not exceed 6% of the aggregate compensation of DC plan beneficiaries ... the IRC Section 404(a)(7) combined limit only applies to contributions to the DB plan."

Tags: Retirement Plan Administration

Editor's Pick Plan Payments for Specialty Medications Tripled Depending on Site of Treatment (PDF)
Employee Benefit Research Institute [EBRI] Link to more items from this source
Sept. 10, 2021

"[On] average, plan payments to [hospital outpatient departments (HOPDs)] were triple what plan payments were to [physician offices (POs)] for the same unit of medication. The median unit price differential was 100 percent, or double for HOPDs vs. POs.... [E]mployers could cut spending by $14.1 billion by shifting patients away from more costly HOPD settings or by negotiating site-neutral pricing for specialty medications. This represents 1.5 percent of total health care spending on workers and their families."

Tags: Health Plan Costs

Editor's Pick Ways and Means Budget Reconciliation Bill: Summary and Analysis of Paid Leave and Retirement Provisions
Brownstein Hyatt Farber Schreck LLP Link to more items from this source
Sept. 10, 2021

"On Tuesday, Sept. 7, House Ways and Means Committee Chair Richard Neal (D-MA) released part of the committee's portion ... [of] the expected $3.5 trillion budget reconciliation measure ... This alert summarizes Subtitles A (Universal Paid Family and Medical Leave) and Subtitle B (Retirement)."

Tags: Health Plan Policy  •  Retirement Plan Policy

Editor's Pick The ABCs of Estate Planning for IRAs Under the SECURE Act
Morningstar Link to more items from this source
Sept. 9, 2021

"The Secure Act of 2019 created a confusing new array of different 'required minimum distribution rules' for 'plain old designated beneficiaries' and five classes of 'eligible designated beneficiaries.' Meanwhile, the IRS' complicated 'minimum distribution trust rules' are still with us, even though the rewards for successfully navigating the same are diminished.... [The] system described here is designed to cut through that confusion and get you quickly to the estate planning options for each type of beneficiary and their minimum distribution consequences."

Tags: Misc. Distribution Issues  •  Required Minimum Distributions (RMDs)  •  SECURE Act

Editor's Pick U.S. Employers Rethinking Employee Benefit Strategy
Willis Towers Watson Link to more items from this source
Sept. 8, 2021

"The 2021 Benefits Trends Survey found that more than two-thirds of employers (69%) plan to differentiate and customize their benefit programs over the next two years, a sharp increase from just 23% today. Nearly three in four respondents (73%) cite an increased focus on DEI as driving their benefit strategy, followed by tight labor markets (53%) and rising benefit costs (50%)."

Tags: Health Plan Design  •  Retirement Plan Design

Editor's Pick Suburban Chicago Residents Risk Losing Homes Over Rising Pension Costs
RiverBender.com Link to more items from this source
Sept. 7, 2021

"As unfunded pension obligations have grown, so has the percentage of property tax dollars devoted to paying these costs. In Cook County, from 1999 to 2019, 76% of additional property tax dollars spent on municipal police and 74% of additional property tax dollars spent on municipal firefighters went to pensions rather than to public safety costs."

Tags: Funding of DB Plans  •  State and Local Government Plans

Editor's Pick How the 2022 ACA Affordability Decrease Affects Employers
Newfront Link to more items from this source
[Guidance Overview]
Sept. 3, 2021

"The IRS has announced that ACA affordability percentage will decrease from 9.83% in 2021 to 9.61% in 2022.... Employers offering a medical plan option in 2022 that costs employees no more than $103.14 per month for employee-only coverage will automatically meet the ACA affordability standard.... Employers that do not offer a medical plan option meeting the 2022 federal poverty line affordability safe harbor ... should generally utilize the rate of pay affordability safe harbor."

Tags: Health Plan Costs

Editor's Pick An Employee's 401(k) Plan Guide
Morningstar Link to more items from this source
Sept. 3, 2021

"[This special report addresses] how to make the most of 401(k) plans today. [It includes] tips for how to invest in your plan and what to do if your plan is sub-optimal ... what alternatives you have for retirement saving if you don't have access to a 401(k) plan [and] ... some ideas for how to reform the retirement savings system over time[.]" [Specific reports are:  [1] 100 Must-Know Statistics About 401(k) Plans; [2] What Should I Do If I Don't Have a 401(k)? and [3] A Checklist for Lobbying [Your Employer] for a Better 401(k).]"

Tags: 401(k) Plans  •  Retirement Plan Design  •  Retirement Plan Information for Employees  •  Retirement Plan Investments

Editor's Pick IRS Updates Tools for Reviewing Retirement Plan Document Compliance
Thomson Reuters / EBIA Link to more items from this source
[Guidance Overview]
Sept. 2, 2021

"The IRS has updated nearly all of the 'subject matter packages' used by IRS specialists when reviewing retirement plan documents. Each package consists of an Explanation, a Worksheet, and a Checksheet that are designed to be used together.... While they were created for IRS personnel, these materials can also be used by plan sponsors to review a plan's compliance before submitting a determination letter application."

Tags: Plan Audits by Government Agencies  •  Retirement Plan Administration

Editor's Pick When an Employee Takes FMLA Leave During a Holiday Week, How Much FMLA Leave Is Actually Taken?
FMLA Insights Link to more items from this source
Sept. 1, 2021

"First, it's critical to understand that the term 'workweek,' as defined under the FMLA, is the employee's normal schedule (hours/days per week) prior to the start of FMLA leave.... Second, we apply this normal workweek when calculating how much the FMLA leave the employee has used during the holiday week.... In other words, when making the FMLA calculation, we do not back out the Labor Day holiday from our normal workweek."

Tags: FMLA and Other Leave

Editor's Pick Handling Commuter Account Balances When Expenses Dry Up
Newfront Link to more items from this source
[Guidance Overview]
Aug. 31, 2021

"The Section 132 rules that apply to tax-advantaged commuter benefits prohibit any refunds or cash outs (even on a taxable basis) of the remaining account balance. However, new IRS guidance permits employees to roll over any unused mass transit/vanpooling commuter account balance to the parking benefit balance, and vice versa."

Tags: Cafeteria Plans  •  Misc. Benefits

Editor's Pick How to Use Annuities During Retirement
John Rekenthaler, via Morningstar Link to more items from this source
Aug. 31, 2021

"[S]ubstituting [single premium immediate annuities] for investment-grade bonds appears to be almost unambiguously sound. However, the competition tightens considerably when using bonds to generate total return rather than for income alone. That is, instead of clipping bond coupons while retaining principal, our retiree in effect creates her own annuity by dipping into capital. Doing so would sharply increase her sustainable withdrawal rate."

Tags: Retirement Plan Investments

Editor's Pick GAO Report: 401(k) Retirement Plans: Many Participants Do Not Understand Fee Information, But DOL Could Take Additional Steps to Help Them
U.S. Government Accountability Office [GAO] Link to more items from this source
Aug. 26, 2021

"DOL could take additional steps to help 401(k) plan participants improve their understanding and use of fee information, based on GAO survey responses and analysis.... [D]isclosures are not required to include certain information, such as fee benchmarks and ticker information ... that could be helpful for participants.... This report [1] assesses the extent to which 401(k) plan participants can understand and use fee information in disclosures; [2] describes disclosure practices used by selected countries to help retirement plan participants; and [3] examines any additional steps that DOL could take to advance participant understanding and use of fee information." [GAO-21-357, pub. Jul. 27, 2021, released Aug. 26, 2021]

Tags: 401(k) Plans  •  Retirement Plan Administration  •  Retirement Plan Investment Costs

Editor's Pick Retirement Plan Correction Solution Meltdown: Correcting Automatic Enrollment Failures
Ferenczy Benefits Law Center Link to more items from this source
[Guidance Overview]
Aug. 25, 2021

"Typically, a company must correct a failure to timely implement a deferral election by making a qualified nonelective contribution ('QNEC') in relation to an affected participant's missed deferral. The QNEC must equal the participant's 'Missed Deferral Opportunity' ('MDO'), which is defined as 50% of the amount the participant elected to defer. However, if certain criteria are met, the QNEC may be reduced to 25% of the MDO. But, for plans with [automatic enrollment] provisions, there is a special deal: the employer may avoid making a QNEC at all if certain conditions are met."

Tags: 401(k) Plans  •  Retirement Plan Administration

Editor's Pick How State Residency Affects Deferred Comp Decisions
Moss Adams LLP Link to more items from this source
Aug. 25, 2021

"If you live in California, then you're taxed on your worldwide income. There may be an opportunity to claim the other state tax credit in rare circumstances, but the more likely outcome is that you'll owe tax on all of your income. For this reason, it's prudent to evaluate the potential benefits of moving before exercising your deferred compensation."

Tags: Local Regulation  •  Stock Options

Editor's Pick A User's Guide to Implementing ARPA's DB Funding Relief
Mercer Link to more items from this source
[Guidance Overview]
Aug. 23, 2021

"Besides providing details on the relief elections, [IRS Notice 2021-48] gives sponsors abundant flexibility to manage credit balances and prior-year contributions. The notice also offers guidance on a few issues related to using ARPA interest rates for other purposes."

Tags: ARPA  •  Funding of DB Plans  •  Multiemployer Plans

Editor's Pick Why Hospitals and Health Insurers Don't Want You to See What Hospitals Charge
The New York Times; subscription may be required Link to more items from this source
Aug. 23, 2021

"[D]ata from the hospitals that have complied ... shows hospitals are charging patients wildly different amounts for the same basic services ... And it provides numerous examples of major health insurers ... negotiating surprisingly unfavorable rates for their customers. In many cases, insured patients are getting prices that are higher than they would if they pretended to have no coverage at all."

Tags: Health Plan Costs

Editor's Pick Defined Contribution Plans: Challenges and Opportunities for Plan Sponsors
Jeffery V. Bailey and Kurt D. Winkelmann, via SSRN Link to more items from this source
Aug. 20, 2021

"[The authors] address key challenges facing DC plans and offer associated design and policy recommendations for plan sponsors and other interested parties to consider.... Plan sponsors individually will make the important decisions that have lasting consequences for participants and for society.... [The authors] believe the DC system will be strengthened by informed sponsors advocating for and implementing thoughtful strategic changes to their plans."

Tags: Retirement Plan Design  •  Retirement Plan Policy


<< Older News  |  September 18, 2021

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