Health & Welfare Plans Newsletter

November 7, 2017

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Jobs

Executive Compensation Attorney
Harter Secrest & Emery LLP
in NY

Pension Plan Administrator
Altigro Pension Service, Inc.
in NJ

Retirement Plan Administrator
3(16) Fiduciary Services
Telecommute

Director of Plan Administration Retirement Plan Services Group
CliftonLarsonAllen LLP
in IL

Retirement Services Benefit Analyst
BB&T
in NC, SC

Institutional Investment Account Specialist
SunTrust Bank
in VA

Defined Contribution Compliance Analyst
Transamerica
in CO

Production Coordinator
Transamerica
in CO

Assistant Manager-Eligibility/Participant Services
Carpenters Southwest Administrative Corporation (CSAC)
in CA

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[Guidance Overview]

IRS (Quietly) Announces Procedures for Excise Taxes on Failure to Comply with ACA Employer Mandate
"Q&A 58 telegraphs the IRS' intention to begin notifying employers very soon.... [Indications are that] notices will be issued within the next 7 weeks or so ... What is not clear is whether the IRS will publish guidance in the Internal Revenue Bulletin or elsewhere that fleshes out the notification and collection procedures or whether these new Q&As fulfill that role."
Mintz Levin

[Advert.]

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Sponsored by WEB - Worldwide Employee Benefits Network

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[Guidance Overview]

IRS Provides 2017 ACA Employer Reporting Forms and Instructions (PDF)
8 pages. "Applicable Large Employers (ALEs) must complete the 1094-C and 1095-C forms ... 2017 forms will be due as follows: Forms to employees -- January 31, 2018; Forms to IRS -- February 28, 2018, (on paper) or April 2, 2018, (electronically)... The forms can be mailed or hand-delivered to employees.... [E]mployees must specifically consent to receive this form electronically under the same rules that apply to providing the W-2 electronically."
Marsh & McLennan Agency LLC

[Guidance Overview]

Goodbye to the Transitional Reinsurance Fee (Almost): Final Scheduled Payment Due Nov. 15
"For employers who chose to pay the 2016 fee in two installments, the second installment of the fee is coming due.... [T]he only way to make the TRF payment is through the Federal Reserve's automated clearinghouse service. This is sometimes referred to as a 'pull' transaction, meaning [CMS] will collect the TRF by debiting the employer's designated bank account on the date selected."
Lockton

Train Your Managers on the FMLA, or You're Courting Trouble
"[T]he jury ... [found] that the employer grossly violated the FMLA when it refused to allow Grace's son to report her absences on her behalf and then terminated Grace immediately after her time in the hospital and without inquiring further.... Because the court found that the employer willfully violated the FMLA, it awarded Grace liquidated damages, which doubled Grace's back pay award." [Boadi v. Center for Human Development, Inc., No. 14-30162 (D. Mass. Sept. 21, 2017)]
Society for Human Resource Management [SHRM]

Premiums Rise 6.6% on Employer-Sponsored Health Plans, Up from Five-Year Trend
"[T]wo states saw record premium increases for employer-sponsored programs in 2017: 24% in Connecticut ... and 14% in New York ... Employee premiums for all employer-sponsored plans rose from an average $509 in 2016 for single coverage to $532 in 2017 and from $1,236 to $1,272 for family coverage (a 4.5% and 3% increase respectively). The average annual total costs per employee increased from $9,727 in 2016 to $9,935 in 2017."
HealthLeaders Media

[Advert.]

Online Learning Course: COBRA

Sponsored by International Foundation of Employee Benefit Plans [IFEBP]

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Reference-Based Pricing -- Not Just for Large Groups Anymore
"The objective is to motivate participants to search for the most cost-effective provider of care since the member is responsible for charges above the set reference-based pricing level.... For small employers, this could be viewed as an improvement over traditional plans since members can visit any medical provider."
Frenkel Benefits

Value-Based Care Growing as a Way to Reduce Employer and Employee Health Costs
"Providers, namely hospitals and large regional health care systems, are increasingly being asked by payers to accept at-risk reimbursement, where payment is heavily influenced by the quality and outcome of patient care."
PLANSPONSOR

Factors Associated with Increases in U.S. Health Care Spending, 1996-2013
"Increases in U.S. health care spending from 1996 through 2013 were largely related to increases in health care service price and intensity but were also positively associated with population growth and aging and negatively associated with disease prevalence or incidence. Understanding these factors and their variability across health conditions and types of care may inform policy efforts to contain health care spending."
The JAMA Network

ERIC Files Amicus Brief with the Supreme Court in Critical Retiree Health Case
"ERIC's brief lays out two reasons the Court should review the case: The Sixth Circuit's decision violates the Supreme Court standard set by the M&G Polymers v. Tackett case regarding how the duration of a retiree health benefit should be interpreted, and The Sixth Circuit's decision was reached by applying a test which the Supreme Court had affirmatively thrown out in Tackett."
The ERISA Industry Committee [ERIC]

GAO Report on FEHBP: Enrollment Remains Concentrated Despite More Plan Offerings and Effects of Adding Plan Types Are Uncertain
"[D]espite more available plan offerings in recent years [under the Federal Employees Health Benefits Program], enrollment has become more concentrated within the largest health insurance carrier in a county. Specifically, the median share of enrollment held by the largest carrier in a county increased from 58 percent in 2000 to 72 percent in 2015. Further, one carrier -- the Blue Cross Blue Shield Association -- was the largest carrier in 93 percent of counties in 2000 and 98 percent of counties in 2015." [GAO-18-52, published Oct. 5, 2017, released Nov. 6, 2017]
U.S. Government Accountability Office [GAO]

Benefits in General

Employee Benefit Provisions in the Proposed House Tax Bill
"The [proposed] rules raise many issues. For example, how do you tax nonqualified deferred compensation that has vested, but whose value is wholly contingent on future events? Will there be a reconciliation of the taxes that are paid when deferred compensation vests with the amount (including earnings) that is eventually paid? Special complications apply to existing awards granted before 2018 but that will not vest until after 2017."
Nixon Peabody LLP

Executive Compensation
and Nonqualified Plans

House Draft of Tax Reform Bill Contains Opportunities and Surprises for Stock Compensation
"Among those who receive grants of incentive stock options (ISOs), much rejoicing would occur if the AMT were repealed. Companies might then use incentive stock options more frequently.... Stock options and stock appreciation rights could get caught up in the definition of NQDC, at least in the House draft legislation. If so, that could lead to taxation at vesting! However, considering the way in which stock options and SARs were initially penalized in the early versions of the Section 409A regulations, we would expect that if this provision continues it will be amended to apply only to discounted grants."
myStockOptions.com

Proposed Tax Bill Changes Are Worse Than We First Reported
"The Bill would essentially end the deferral of compensation, supplemental executive retirement plans, and excess plans, as we know them by replacing Code Sections 409A and 457A with a new Code Section 409B, effective for services performed after December 31, 2017.... The Transition rules provide that all deferred compensation amounts and accrued benefits as of December 31, 2017 will be grandfathered under the rules of 409A until 2025. In 2025, those amounts when the will recognized as income, unless they remain subject to a substantial risk of forfeiture.... Supposedly another version of the Tax Bill is expected this week, so everything in here may be superseded."
Winston & Strawn LLP

Proposed Tax Bill Would Make Big Changes to (and Create New Opportunities for) Executive Compensation
"[T]ax-exempt and governmental employers have been dealing with these rules for decades, and these employers still manage to provide deferred compensation to their executives. In some ways, tax-exempt employers have less flexibility to design these types of plans than for-profit employers, but in other ways, tax-exempt employers think quite clearly and strategically about the mix of incentive-based pay and supplemental retirement benefits. Second, the Proposed Act will not be the final word on these types of arrangements. Even if the Proposed Act's terms remain in a final bill that becomes enacted (a big 'if'), the Proposed Act directs the Treasury Department to issue regulations that define certain terms and carve out exceptions."
Porter Wright Morris & Arthur LLP

Companies Can Safeguard Pay Data, with Limits, SEC Staff Says
"[SEC staff] responded to an inquiry about investor disclosures under 1933 Securities Act Rule 701(e). The regulation allows companies to use unregistered securities as part of a compensatory benefit plan. The plan must be delivered to investors, electronically or otherwise. The staff said it understands that companies using electronic delivery are concerned about the possible disclosure of sensitive corporation information, and that standard safeguards, such as log-in requirements, are permissible. However, the safeguards can't be unduly burdensome, according to the staff."
Bloomberg BNA

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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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