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[Guidance Overview]

ACA Employer Mandate Assessments Coming
"Because transition relief during the 2015 plan year exempted employers with less than 100 full-time employees from the penalty in Code Section 4980H(a) and reduced the penalty threshold to 70% for larger employers, [the authors] anticipate that assessments this year will primarily be based on the smaller, individualized penalty set forth in Code Section 4980(b)."
Proskauer's ERISA Practice Center


New COBRA Audit Guidelines

Sponsored by Lorman and BenefitsLink

Nov. 28 webinar. In addition to general COBRA compliance, we'll review the IRS Audit guidelines, to help you identify and prepare for the areas of focus in an IRS COBRA audit. Discount for BenefitsLink readers.

[Guidance Overview]

Unwanted Holiday Gifts from the IRS: IRS to Issue Employer Mandate Penalty Notices in Late 2017
"[T]he potential employer mandate penalties for calendar year 2015 are ... $2,080 for every full-time employee (for employers who did not offer coverage to a sufficient percentage of its full-time employees); or $3,120 for full-time employees who received an exchange subsidy (for employers who offered coverage to full-time employees, but the coverage was either unaffordable or did not provide minimum value and at least one full-time employee received an exchange subsidy).... [T]he penalties are actually assessed on a monthly basis for penalties of $173.33 and $260 per month, respectively."
Maynard Cooper & Gale

ACA Assessment Letters Are Coming
"Your response will generally be due 30 days from the date of the letter. Given processing and mail time, you will likely have less than 30 days in which to respond. If the IRS does not receive a timely response, it will assess the full amount of the proposed payment in a demand letter. If you agree with the proposed payment, payment can be included with your response, using the enclosed response form (Form 14764). If you do not agree with the proposed payment, a response with a signed statement is required."

Court Considers Whether Employee Who Refused Drug Test Was Terminated for Gross Misconduct for Purposes of COBRA
"Because gross misconduct terminations tend to involve disputed facts, there is an increased risk of a court challenge, and the factual disputes often preclude either side from obtaining judgment without a costly trial. In addition, an employer that is wrong about gross misconduct can face not only an award of retroactive COBRA coverage but also an imposition of penalties of up to $110 per day for failure to provide the election notice that would otherwise be required." [Knight v. General Telecom, Inc., No. 16-218 (N.D. Ala. Sept. 27, 2017)]
Thomson Reuters / EBIA

Vacation: All They Ever Wanted
"90 percent of employees would choose extra vacation days (or a bonus) over a workplace holiday party.... [On] average, salaried employees in the U.S. with paid-time-off plans receive 17 days after one year of service, 22 days after five years, 25 days after 10 years of service and 28 days after 20 years (this includes vacation, sick days, etc.).... Most employers let workers carry over their paid leave time from one year to the next[.]"
HRE Daily


This is a critical time for employer-sponsored benefit plans.

Sponsored by American Benefits Council

From education to advocacy, the American Benefits Council offers the resources you need to stay informed and make a difference in the policy debate. Just in time, to celebrate our 50th anniversary, special membership opportunities are now available.

Tax Cuts and Jobs Act Passes House
"Dependent Care FSA eliminated as of 2023: The original version of the bill would have eliminated the Dependent Care FSA as of 2018. So this five-year delay is a small victory. Current Senate Bill: Does not eliminate the Dependent Care FSA.... The bill eliminates the ability for employers to provide tax-free adoption assistance to employees (up to $13,570 in 2017). Current Senate Bill: Does not eliminate Adoption Assistance Programs.... The bill eliminates only the Section 127 qualified program that does not require the employee's educational expenses be work-related. Employers would still be able to offer the separate Section 132 working condition fringe tax-free educational benefit for work-related educational expenses. Current Senate Bill: Does not eliminate Qualified Education Assistance Program."
ABD Insurance & Financial Services

Fifth Annual Transamerica Survey: Employers Hold Steady in Time of Uncertainty (PDF)
91 presentation slides. "Companies are less likely in 2016 (13 percent) and 2017 (13 percent) than they were in 2015 (18 percent) to say they stopped providing health insurance in the past year....31 percent of employers have made changes in the past 12 months to health benefits they offer.... [E]mployers report they changed plan options (29 percent) or implemented a wellness program (27 percent).... [O]ne in six (17 percent) say they reduced or eliminated company contribution to cover costs for healthcare benefits (other than health insurance) and 13 percent say they did the same to cover cost for health insurance.... [T]hree out of four employees say they are satisfied with the health insurance plan and other benefits their company offers."
Transamerica Center for Health Studies

Influence of Incentives and Incentive Design on Employee Participation and Satisfaction
"The low rate of outcome-based only and activity-based only approaches was notable, as were the findings that most employers were using participation-based incentives alone or in combination with other approaches and that 63% did not use any type of outcome-based component.... [F]inancial incentives were associated with higher participation rates for health assessments (54% participation) and biometric screenings (52% participation)[.]"

Improving Health Plan Quality, Satisfaction, and Lowering Costs: What's in Your Five-Year Plan?
"The top two won't be a surprise to anyone with responsibility for managing a health program: taking action to manage high-cost claims and spending on specialty drugs. But the third on the list -- with 70% of large employers citing it as important or very important -- was unexpected: a focused strategy for creating a culture of health."


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Keys to Successful Business and Community Health Collaboration (PDF)
"[A] growing number of business leaders are investing in the health of their employees, but they also increasingly recognize the importance of engaging in efforts to create a culture of health in the communities they serve and to address concerns such as community access to health care and healthy food, emotional health issues, obesity, and graduation rates -- all factors that contribute to community health."
Health Enhancement Research Organization [HERO]

Middle-Class Families Confront Soaring Health Insurance Costs
"With the deadline for a decision less than a month away, consumers are desperately weighing their options, dismayed at the choices they have under the [ACA] and convinced that political forces in Washington are toying with their health and well-being."
The New York Times; subscription may be required

Benefits in General

Senate Tax Bill Revisions Kill ACA Individual Mandate, Preserve Current Retirement and NQDC Contributions
"Unlike the House version, the Senate bill, as amended, would effectively repeal the [ACA's] individual mandate ... Like the House tax bill, the Senate version now keeps pretax retirement contributions to 401(k) and similar plans intact.... Senate Republicans added an employer credit for paid family and medical leave to the bill.... [By] Nov. 15 the NQDC provision was gone from the revised mark-up of the bill."
Society for Human Resource Management [SHRM]

2017 Global Benefits Attitudes Survey
"Employees ... with choice and flexibility today are twice as likely to feel their benefit program meets their needs.... More than one-fifth of employees expect to still be working at age 70 or later. Over 60% say their employer retirement plan is their primary means of saving for retirement. Employees look to their employers for support in improving their health and well-being, and becoming more financially secure. Although companies are responding with programs that support physical, emotional, financial and social well-being, ... [e]mployee engagement in well-being programs remains low. Employers could likely boost engagement by designing programs that leverage the workplace environment and promote the use of new technologies."
Willis Towers Watson

Executive Compensation
and Nonqualified Plans

Latest Senate Markup of the Tax Bill Strikes NQDC Provisions but Retains Revisions to 162(m) Limits on Executive Pay
"Adoption of Code section 409B would have literally been the end of elective nonqualified deferred compensation plans.... It appears support for overhauling the rules relating to nonqualified deferred compensation is losing steam.... At the same time, the latest markup of the Act by the Senate did not remove the provisions changing Code section 162(m)."
Trucker Huss

Tax Reform: The Shifting Landscape of Executive and Equity Compensation
"The House passed its [version of the] bill on November 16, 2017.... [On] November 15, 2017, the Senate Finance Committee released its current proposal which ... eliminated certain wide-sweeping amendments included in the initial Senate tax reform proposal.... [A table] summarizes key executive and equity compensation provisions of the House Bill and the Senate Proposal."
Pillsbury Winthrop Shaw Pittman LLP

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BenefitsLink Health & Welfare Plans Newsletter, ISSN no. 1536-9595. Copyright 2017, 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, 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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