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Health & Welfare Plans Newsletter December 24, 2019 |
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Webcasts, Conferences HSAs - How Advisors Can Help Connect Health and Wealth
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Discussions |
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This Newsletter:
BenefitsLink Retirement Plans Newsletter:
Message Boards Digest:
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[Guidance Overview] Goodbye to 2019 -- and to the Parking and Public Transit Benefits Tax "Section 512(a)(7), enacted as part of the 2017 Tax Cuts and Jobs Act, required tax-exempt organizations to include in unrelated business taxable income their costs for providing 'qualified transportation fringe benefits' to their employees. The 2020 Act repeals section 512(a)(7) in its entirety and retroactive to the date of its enactment -- in other words, it is as if section 512(a)(7) never existed." Seyfarth Shaw LLP |
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New IRS Guidance for Tax-Exempt Entities Funding Employee Benefits "The final regulation clarifies that, for VEBAs and SUBs, investment income earned during the year is subject to unrelated business income tax to the extent it exceeds the IRC section 419A account limit for the year. This rule applies regardless of whether the investment income is spent on benefits during the year." Proskauer |
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Updated Medical Loss Ratio Methodology and Historical Results (PDF) 12 pages. "[F]ollowing the implementation of the MLR program beginning in 2011, there was a sharp decline in payouts as insurance companies that did not meet the threshold adjusted their premiums to reduce future rebate payments. Excluding the anomaly observed in 2011, the large group market has been the most stable with the smallest amount of year over year change observed. The small group market had some small disruptions but remained relatively stable over the years while also following some of the same industry-wide patterns." Society of Actuaries |
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Appeals Court Rules Individual Mandate Unconstitutional "Though the 5th Circuit found the individual mandate unconstitutional, there is no immediate impact on employers or their employees because Congress already reduced the penalty for those without health insurance coverage to $0. The more important question continues to be whether the courts conclude that other ACA provisions -- or all of the ACA -- are integral to the individual mandate and thus must also be invalidated." [Texas v. U.S., No. 19-10011 (5th Cir. Dec. 18, 2019)] Mercer |
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Fifth Circuit Holds the Individual Mandate Unconstitutional: Implications for Congress "The Fifth Circuit affirmed a district court ruling that Congress lacked the constitutional authority to enact the individual mandate ... but declined to resolve a broader issue: what happens now to the ACA's remaining provisions? ... [This article] provides background on [the case]; discusses the Fifth Circuit's decision; highlights potential effects of the decision and possible next steps for the case; and identifies legislative options for Congress." [CRS LSB10389; Dec. 23, 2019] [Texas v. U.S., No. 19-10011 (5th Cir. Dec. 18, 2019)] Congressional Research Service [CRS] |
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Some Political and Practical Aspects of Texas v. United States If ACA Is Overturned "Moving forward, we are likely to see states intervene. In fact, California Attorney General Xavier Becerra has already stated his intention to file a petition for certiorari with the Supreme Court. Other states are likely to respond in suit, joining either side in appeal or support. As a result, we are likely to see passionate amicus briefs on either side.... If the ACA is held unconstitutional as a whole, the decision will mean much more than simply removing the already inconsequential individual mandate." [Texas v. U.S., No. 19-10011 (5th Cir. Dec. 18, 2019)] Sheppard Mullin |
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Employers in Union-Related Group Health Plans Must Still Comply with ACA Reporting Requirements "Employers should not make the mistake of concluding that, because the plan has all the coverage information, only the plan is responsible for the ACA reporting requirements for union employees. Such a mistake could result in the IRS imposing penalties on an employer under Code sections 6721 and 6722 for failure to report (the 2019 reports are generally due in early-2020). To make the reporting easier for employers in multiemployer plans, the IRS has provided interim, simplified reporting rules." Jackson Lewis P.C. |
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Sens. Cruz, Braun Introduce Legislation to Expand HSAs "[The Personal Care Act (PCA)] decouples HSAs from high deductible health insurance plans (HDHP), and expands HSAs to Americans in all major medical health insurance plans and government health programs (Medicare, Medicaid, CHIP, etc.), as well those participating in other present and future innovative forms of healthcare financing, like healthcare sharing ministries, short-term limited-duration plans, and medical indemnity plans." U.S. Senator Ted Cruz [R-TX] |
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Washington PFML Alert: Required Notice and Online Benefits Calculator "The Employment Security Department (ESD) has released the required PFML notice ... Employers should post the PFML notice in a place customarily used to post other employment-related notices. The notice is available in multiple languages, but currently only available online in English.... Additionally, ESD has added an online calculator to estimate the weekly benefit for eligible employees." Davis Wright Tremaine LLP |
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Benefits in General |
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[Guidance Overview] SECURE Act In; Cadillac Tax Out -- The Spending Act Makes Serious Changes to Benefits Rules "[The SECURE Act] encourage employers to offer retirement plans, promote additional retirement savings, enhance retiree financial security, and ease administrative requirements of plans. Many of the provisions became effective either immediately or will become effective as of January 1, 2020.... The spending package also includes a full repeal of three [ACA] taxes -- the tax on high-cost health plans known as the 'Cadillac tax,' the health insurer tax, or 'HIT' tax, and the medical device tax." Ballard Spahr LLP |
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Selected Discussions |
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When Will Enrollment in Medicare Part D Cause a Participant to Lose Medical Coverage? [No answers have been contributed yet -- can you help?] "I am working with an employer that has a plan that covers eligible retired employees. If the coverage is considered creditable, would a retiree's enrollment in Medicare Part D result in the retiree's loss of coverage under the employer's medical plan? If the coverage is non-creditable and the employee enrolls in Medicare Part D, would this result in the retiree's loss of coverage under the employer's plan? Can you provide a citation to a U.S. Code provision or a regulation citation that supports your position?" BenefitsLink Message Boards |
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Press Releases |
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Most Popular Items in the Previous Issue |
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ACA Provisions In New Budget Bill
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Cadillac Tax Fully Repealed
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