Health & Welfare Plans Newsletter

December 8, 2017

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Account Manager
Beneco
in AZ

Defined Benefit Administrator
OneAmerica Financial Partners, Inc
in IN, Telecommute

Retirement Plan Consultant
BPAS
in NY, PA, TX, Telecommute

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[Guidance Overview]

IRS Updates Employer Shared Responsibility Payment Information
"How will an Applicable Large Employer (ALE) know that it owes a shared responsibility payment? ... Does an ALE who receives a letter 226J have an opportunity to respond to the IRS about the proposed shared responsibility payment? ... How does an ALE make a shared responsibility payment? ... When does the IRS plan to notify ALEs of potential shared responsibility payments?"
Ropes & Gray LLP

[Advert.]

Now is a great time to join Worldwide Employee Benefits Network (WEB)

Sponsored by WEB - Worldwide Employee Benefits Network

WEB members represent more than 25 professions and 30 areas of expertise within the pension and benefits industry -- administrators, consultants, attorneys, accountants, investment managers, communications experts and benefits managers. Join today.


[Guidance Overview]

Watch Out for IRS Letters: IRS Begins Enforcing Employer Mandate
"Some notices have been issued based on incorrectly reported information ... There have also been notices received apparently because an item was left blank.... [T]here is no reason for incurring a penalty for something that you didn't do -- especially if it is the result of a mistake that can be remedied. Even with special rules that applied for 2015, some of which had the effect of reducing the calculated payments, the ESRP can be a significant amount of money."
FordHarrison

CMS Memorandum Addresses Notice Requirements Relating to Exemptions from Contraceptive Coverage Mandate
"Plan sponsors wishing to reduce or eliminate contraceptive coverage must ensure that all applicable disclosure requirements are met. The 60-day method allows plans to reduce or eliminate benefits midyear, while the general method allows a change only at the beginning of a plan year. In addition to the notice described in the [CMS memorandum], plans should also take into consideration other plan documentation and disclosure rules, including an updated summary plan description."
Thomson Reuters / EBIA

For Some, HSAs Offer a 'Quadfecta' of Tax Benefits
"[In] the payroll deduction scenario, ... [the] employer is also able to avoid payment of [FICA] taxes on any contributions that it makes on behalf of the account holder. This is especially valuable to any HSA-contributing employer because, unlike the Social Security/disability 6.20% tax which is withheld on compensation only up to a 2017 wage base of $128,700 ($128,400 in 2018), the Medicare 1.45% tax has no such limit."
Morningstar

Mega-Deals Show How Insurers Are Taking Over Access to Care
"The nation's largest insurer, UnitedHealth Group, announced [Dec. 6] that it would buy a network of 300 primary care and specialist clinics from dialysis giant DaVita for $4.9 billion ... The deal ... comes days after CVS Health agreed to buy health insurer Aetna for $69 billion.... The two deals represent companies exploring new ways to rein in costs -- and the diversity in approaches shows that no one yet knows what will work."
InsuranceNewsNet.com

[Advert.]

ACA Repeal and Replace - Where to Go From Here

Sponsored by Lorman and BenefitsLink

Dec. 19 webinar will summarize a history of the repeal efforts and the current state of the Affordable Care Act as it relates to Employer Reporting Requirements. BenefitsLink discount.


CBO's Record of Projecting Subsidies for Health Insurance Under the ACA: 2014 to 2016
"This document compares projections and subsequent outcomes for health care subsidies that account for the majority of such costs ... The agencies' estimates of those subsidies proved to be close to actual amounts for 2014 and 2015 but were much too high for 2016, and [in] general, other organizations' estimates of health care subsidies produced around the time of the ACA's enactment were much too high for all three years."
Congressional Budget Office [CBO]

[Opinion]

Will the Urge to Merge Help Healthcare?
"CVS-Aetna would be able to deliver more across the healthcare delivery spectrum. Pharmacy costs represent 25% of total spend and this is growing.... [T]his cost is full of margin begging to be squeezed out. And with the CVS MinuteClinics, CVS-Aetna would have the potential to take over costly, and previously difficult-to-control, primary care costs.... But the market is skeptical that this transaction will clear the antitrust regulators."
Frenkel Benefits

Benefits in General

Americans' Views on Employee Benefits: Results of National Poll
21 presentation slides. "Tax benefits for employer-sponsored retirement savings and health insurance coverage are highly important [to Americans]. They prefer compensation packages that emphasize more, higher-quality benefits over more take-home pay. Health and retirement benefits rank higher than vacation and leave. Working Americans trust employers most as a source for high-quality health care coverage."
American Benefits Council

Executive Compensation
and Nonqualified Plans

[Official Guidance]

Text of IRS Notice 2017-75: Guidance Under Section 409A for Pre-2009 Section 457A Deferrals (PDF)
"This notice provides guidance on the application of Internal Revenue Code section 409A with respect to amounts that are includible in income pursuant to section 801(d)(2) of the Tax Extenders and Alternative Minimum Tax Relief Act of 2008 ... Section 801(a) of TEAMTRA added section 457A to the Code. Section 457A generally applies to deferred amounts that are attributable to services performed after December 31, 2008. However, if section 457A does not apply to a deferred amount solely because the amount is attributable to services performed before 2009, section 801(d)(2) of TEAMTRA provides that the amount is includible in gross income in the later of the last taxable year beginning before 2018 or the taxable year of vesting. This guidance provides that a nonqualified deferred compensation plan that is subject to the provisions of Code section 409A will not fail to meet the requirements of section 409A solely because payments of deferred amounts under the plan are accelerated to pay income taxes on the amounts includible in income pursuant to section 801(d)(2) of TEAMTRA."
Internal Revenue Service [IRS]

Tax Reform Includes Major Changes to Executive Comp for Both Tax-Exempts and Public Companies
"Both the House Bill and the Senate Bill would: [1] Repeal the exception for performance-based compensation (thus effectively imposing a 'hard' tax-deductible compensation limit of $1 million for covered employees), [2] Expand the group of covered employees to include a company's chief financial officer, [3] Provide that the limitation will continue to apply even after the individual ceases to be a covered employee, and [4] Expand Code Section 162(m) to cover additional corporations not previously covered."
Jackson Lewis P.C.

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If you have an existing account on the Message Boards (i.e., you've registered), you have a user name that appears next to any message you post. Your user name might be your real name (which generally is a very good idea for reputation and hence marketing purposes). But you also might want to set up a second account on the Message Boards so that you can post a message (i.e., start a topic or post a reply to an existing topic) without revealing any information about yourself. Think of a second account as an "anonymous" account. [For helpful instructions, please click on the title above.]
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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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