Health & Welfare Plans Newsletter

March 24, 2017

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Webcasts and Conferences

Best Practices for Retirement Plan Fiduciaries to Mitigate the Risk of Litigation
April 4, 2017 WEBCAST
Multnomah Group

Specialty Drugs: What You Must Know to Manage the Growing Spend
April 5, 2017 WEBCAST
Worldwide Employee Benefits Network [WEB]

Regulatory and Legislative Benefit Update
April 27, 2017 in CT
Worldwide Employee Benefits Network [WEB] - Hartford Chapter

401(k) / 403(b) Investment Lineup
May 11, 2017 in TX
Pensions & Investments

Benefit Plan Voluntary Correction Programs: Properly Correct Errors and Minimize Penalties
May 31, 2017 WEBCAST
Lorman Education Services

How to Survive an ACA Audit
June 6, 2017 WEBCAST
Lorman Education Services

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[Official Guidance]

Text of IRS Publication 5258: ACA Information Returns (AIR) Submission Composition and Reference Guide (PDF)
138 pages; rev. Mar. 2017. "The purpose of this document is to provide guidance to all types of external transmitters about composing and successfully transmitting compliant submissions to IRS. The audience of this document is: [1] Issuer: A business filing their own ACA Information Returns regardless of whether they are required to file electronically (transmit 250 or more of the same type of information return) or volunteer to file electronically ... [2] Transmitter -- A third-party sending the electronic information return data directly to the IRS on behalf of any business required to file. [3] Software Developer -- An organization writing either origination or transmission software according to IRS specifications."
Internal Revenue Service [IRS]

[Advert.]

SALGBA 2017 National Conference

Sponsored by SALGBA [State and Local Government Benefits Association]

Join SALGBA, the premier organization for public sector benefits professionals in Anaheim, CA for the 2017 National Conference at the Hyatt Regency Orange County. Visit www.salgba.org for details.


[Guidance Overview]

IRS Clarifies Rules for Disposal of Cafeteria Plan Forfeitures upon Discontinuance of Business Operations
"In Information Letter 2016-0077, the IRS responds to a taxpayer's inquiry by confirming that the unused funds will not revert to the U.S. Treasury but are instead disposed of in accordance with the plan document."
The Wagner Law Group

Americans Widely Support Paid Family and Medical Leave
"Americans largely support paid leave, and most supporters say employers, rather than the federal or state government, should cover the costs. Still, the public is sharply divided over whether the government should require employers to provide this benefit or let employers decide for themselves, and relatively few see expanding paid leave as a top policy priority."
Pew Research Center

House Republicans Tweak AHCA Again; CBO Scores Earlier Changes
"The amendment would first delay the repeal of the [ACA]'s additional Medicare tax on the wages of taxpayers exceeding $250,000 a year ($200,000 for single filers) from 2017 to 2022, and repeal a transition rule applying to the withholding of this tax by employers for 2017. This measure would raise about $50 billion in revenue. Second, the amendment would make a number of changes to the AHCA's Patient and State Stability Fund. Under the amendment, states would be able to use the fund for reducing the cost of insurance coverage in the individual and small group market for individuals who have high health insurance costs due to the low population density of states where they reside.... Finally, the amendment revises the section of the ACA defining essential health benefits (EHB)."
Health Affairs

CBO and JCT Cost Estimate on the American Health Care Act, Incorporating Manager's Amendments 4, 5, 24, and 25
"The provisions dealing with health insurance coverage would reduce deficits, on net, by $883 billion; the noncoverage provisions would increase deficits by $733 billion, mostly by reducing revenues.... [In] 2018, 14 million more people would be uninsured under the legislation than under current law.... In 2026, an estimated 52 million people under age 65 would be uninsured, compared with 28 million who would lack insurance that year under current law.... In 2018 and 2019 ... average premiums for single policyholders in the nongroup market would be 15 percent to 20 percent higher under the legislation than under current law. By 2026, average premiums for single policyholders in the nongroup market would be roughly 10 percent lower than under current law."
Congressional Budget Office [CBO] and Joint Committee on Taxation [JCT]

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2017 Health Savings Accounts Facts

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Perspectives for Employers on the Proposal for Health Reform About to Be Voted on in the House
"It is important to remember that [Friday's] scheduled vote is only the House voting on this proposal, there are still a number of steps and votes and committee conferences that will need to take place before we actually have any change to the law.... The purpose of this alert is solely to look at the potential impact of the 2017 Bill as it is currently drafted and what it might mean for employers and their group health plans and retiree medical plans. We are still a long way from final legislation approved by both the House and Senate[.]"
Winstead PC

Essential Health Benefits: What Could Their Elimination Mean?
"This comprehensive a repeal of the ACA would have far-ranging consequences for our health care system ... The full effect of the repeal of Title I or any of its protections would depend on what would happen to prior law and on interactions with state law.... Repeal of any particular provision of Title I, moreover, would be like pulling a thread from woven fabric -- it could have implications throughout the law that are difficult to predict, as is the case with repeal of the essential health benefits requirement,"
Health Affairs

Premium Hikes Largely Caused by Obamacare Regs
"Obamacare caused premiums to rise for various reasons, chief among them being the vast new regulations the law imposed on insurance markets.... [A] chart provides estimates of the average impact that various Obamacare regulations have had on premiums."
The Heritage Foundation

Anxiety Disorders: Why They Matter and What Employers Can Do
"Anxiety disorders lead to an average of 4.6 work days lost to disability per month and 18.1 work days lost to disability per 3 months, as well as an average of 5.5 work days of reduced productivity per month ... [F]or every $1 invested in treating depression and anxiety, there is a $4 return for the economy. While scaling up treatment for depression and anxiety would cost $147 billion over the next 15 years, it would yield a 5% improvement in workforce participation -- representing a $399 billion return on investment[.]"
Partnership for Workplace Mental Health

[Opinion]

If Essential Health Benefits Standards Are Repealed, Health Plans Would Cover Little
"[E]liminating Essential Health Benefit standards could weaken the ACA's core protections even for people with coverage from large employers. The ACA's prohibition on annual and lifetime limits is tied to the definition of Essential Health Benefits. Thus, repeal of Essential Health Benefit standards could make this protection meaningless, putting almost all Americans with private health insurance coverage -- not just those with individual or small-group market coverage -- at risk."
Center on Budget and Policy Priorities

[Opinion]

Five Facts About the Essential Health Benefits and American Health Care Act
"The EHBs serve as a minimum coverage standard, and are a critical element of the ACA.... [1] The EHBs are basic services ... [2] EHBs are defined by states and are based on a typical employer plan ... [3] EHBs have closed health care coverage gaps ... [4] EHB services like maternity care are not high cost drivers ... [5] Preventive health services are among the EHBs."
National Health Law Program [NHeLP]

Benefits in General

Court Rules No Deferential Review Where Discretionary Authority Was Addressed in SPD But Not in Plan
"Including discretionary language only in the SPD may not ensure deferential review of plan decisions -- particularly in light of cases emphasizing the supremacy of the formal plan document under ... While it is impossible to gauge whether this denial would have survived deferential review, this decision illustrates some potential pitfalls that can arise from common practices." [Nieves v. Prudential Ins. Co. of America, No. 16-768 (D. Ariz. Jan. 17, 2017)]
Thomson Reuters / EBIA

Use of Electronic Medium to Furnish Participant Notices, Documents and Elections (PDF)
"In this age of electronic communication the ability to deliver participant documents, notices, consents and election options through electronic medium can be a great convenience and cost savings to plan sponsors. Both the Treasury and the DOL recognize this and each has its own regulation for use of electronic media.... The document, notice, election or consent will be treated as provided in writing if all the requirements of the appropriate regulation are met."
VOYA Financial

Executive Compensation and Nonqualified Plans

[Opinion]

Calculation of the CEO Pay Ratio Can Be Greatly Simplified
"Narrow the definition of 'employee' and 'employee of the registrant.' ... Clarify that prior-year data can be used to identify the median employee.... Clarify that companies can use base pay as a consistently applied compensation measure (CACM).... Make clear that the disclosure can be a 'reasonable estimate.' ... Allow registrants to use readily accessible records to determine employee classifications.... Permit broader use of 'reasonable estimates' as part of statistical sampling to greatly reduce the effort required for companies with global workforces."
Willis Towers Watson

[Opinion]

Business Roundtable Comment Letter to SEC on Implementation of Pay Ratio Rule
"[C]omplying with the CEO pay ratio rule is costly and burdensome for U.S. public companies of all sizes.... [T]his is particularly complicated and costly for a company with employees located in different jurisdictions throughout the world.... Despite the significant compliance costs, the CEO pay ratio fails to provide material information to investors about a company's compensation of its CEO or its employees and will not enhance investors' understanding of a company's compensation practices."
Business Roundtable [BRT]

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David Rhett Baker, J.D., Editor and Publisher  davebaker@benefitslink.com
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BenefitsLink Health & Welfare Plans Newsletter, ISSN no. 1536-9595. Copyright 2017 BenefitsLink.com, Inc. All materials contained in this newsletter are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of BenefitsLink.com, Inc., or in the case of third party materials, the owner of those materials. You may not alter or remove any trademark, copyright or other notices from copies of the content.

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