Health & Welfare Plans Newsletter

February 24, 2020

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[Guidance Overview]

Editor's Pick IRS Says ACA Large Employer Tax Liability is Forever

"Applicable Large Employers have advocated that Form 1094-C and attached employee statements are returns that, when filed, trigger the three-year statute of limitations under Code Section 6501.... [CCM 20200801F] concludes that this is not the case, because the data disclosed on Forms 1094-C and 1095-C is insufficient to calculate tax liability ... Applicable Large Employers ... now have an added incentive, in the form of minimizing open ended potential tax liability, to ensure that they are offering affordable, minimum value or higher coverage to their full-time employees for so long as the ACA's ESRP provisions remain in place."

E is for ERISA

[Guidance Overview]

NJ Mandates Severance Pay Under NJ WARN Act Changes

"The NJ WARN Act will now apply to all employers with 100 or more employees, regardless of their tenure or the number of hours they work each week.... The notice period will now move from 60 days to 90 days.... [E]mployers will be required to pay severance to all affected employees, regardless of whether advance notice is given. The required severance amount is equal to 1 week of pay for each full year of employment."

Withum Smith+Brown, PC

[Guidance Overview]

Puerto Rico Department of Treasury Grants Tax Exemptions for Employer-Provided Payments and Certain Benefits to Employees and Independent Contractors Related to the Recent Earthquakes

"[Circular Letter No. 20-08 provides that] payments ... subject to tax-free treatment ... must comply with the following requirements: [1] Payments must be provided to the individual from February 1, 2020 through April 30, 2020 ... [2] The total amount paid must be in addition to the compensation ordinarily received by the employee; [3] Employers cannot discriminate in favor of 'highly compensated employees'.... Payments must be limited to a maximum of $2,000 per month ... [4] The total amount of 'qualified payment' made to employees or independent contractors during the eligible period may not exceed $4,000 per worker.... [E]mployer-provided interest-free loans to employees or independent contractors to cover reasonable and necessary expenses for themselves or their families, and expenses for the construction or repair of the employee's or independent contractor's principal residence incurred as a consequence of the recent earthquakes, will not be considered taxable income if [1] they are provided from February 1 through April 30, 2020; and [2] the amount of the loan does not exceed $20,000 per worker."

Littler

Don't Get Caught in the 'Low-Hanging Fruit' HIPAA Harvest

"The Director of the Office for Civil Rights at HHS, Roger Severino, recently ... noted, 'for enforcement purposes, there's still a lot of low-hanging fruit.' ... Severino warned he 'expect[s] that the number of cases brought to enforcement will also be fairly substantial this year.'.... [1] [M]ake sure you have conducted (and documented) a thorough risk analysis.... [2] Reviewing OCR's audit protocol provides good insight into the types of questions you'll be asked in the event of a HIPAA audit.... [3] Make sure your workforce receives HIPAA training[.]"

Seyfarth

A Summary of the Health Care Cost Institute's 2020 Annual Cost and Utilization Report (PDF)

"Overall allowed medical costs increased from 2017 to 201 8 by 4.4% in this study population. This trend is slightly higher than that observed in 2017, but very close to the 4-year average of 4.3% from 2014-2018 for the populations measured.... [F]rom 2013-2017 utilization trends showed an overall decline of 0.2%. However, in 2018, utilization trends were on the rise again with a 1.8% year over year increase. Average prices similarly grew by 2.6%, which was one of the lowest increases in recent years."

Society of Actuaries

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Why Health Plans Remain Cautious About Giving Quality Data to Enrollees

"Available quality data still is unable to tell patients how individual clinicians rank in performing specific procedures. Health plans worry a proposed federal rate-transparency requirement will sideline their more advanced initiatives. Price transparency lessons learned by one plan included the need to provide specific patient costs instead of estimates."

Healthcare Financial Management Association [HFMA]

[Opinion]

The Promise and Perils of Public Options

"[Is] there a genuine case to be made for the ideal of the government providing goods and services alongside private alternatives? ... [Two] law professors ... argue that there is -- citing the postal service, public defense attorneys, and municipal golf courses as examples ... [T]heir argument for establishing or expanding various 'public options' in a number of policy areas is most convincing as a critique of voucher-based government spending."

Charles Blahous, Manhattan Institute for Policy Research

Benefits in General

[Official Guidance]

Text of IRS Proposed Regs: Meals and Entertainment Expenses under Section 274

45 pages. "[T]he proposed regulations address the elimination of the deduction under section 274 for expenditures related to entertainment, amusement, or recreation activities, and provide guidance to determine whether an activity is of a type generally considered to be entertainment. The proposed regulations also address the limitation on the deduction of food and beverage expenses under section 274(k) and (n), including the applicability of the exceptions under section 274(e)(2), (3), (4), (7), (8), and (9).... This document also provides notice of a public hearing on these proposed regulations."

Internal Revenue Service [IRS]

[Guidance Overview]

SECURE Act Update: Penalties for Late Filings

"The IRS penalty for a late Form 5500 filing is $250 per day, with a maximum of $150,000 per plan (per plan year missed). Previously the penalty was $25 per day, up to a maximum of $15,000. The IRS penalty for a late Form 8955-SSA filing is $10 per participant per day with a maximum of $50,000. Previously the penalty was $1 per participant per day with a maximum of $5,000. The DOL can assess a penalty of $2,330 per day with no maximum for a late Form 5500 filing. [That] dollar amount is adjusted for inflation but was not changed by the Act."

The Retirement Advantage

Press Releases

Upcoming Events About Health & Welfare Plans

Feb. 25
Webcast
Reference-Based Pricing "Myths and Realities"
ISCEBS - Pacific NW Chapter
Feb. 25
Webcast
Effectively Managing Pharmacy Benefits: 5 Must Haves
Midwest Business Group on Health
Feb. 25
Texas
Employer's New Perk: Help Repaying Student Loan Debt
Worldwide Employee Benefits Network [WEB] - Dallas Chapter
Fee is required
Feb. 26
Webcast
Cost Differences for Oncology Medicines Based on Site of Treatment
EBRI [Employee Benefit Research Institute]
Feb. 27
Alabama
Regional Benefits Forum
Southeast Benefits Education Network [SBEN]
Fee is required

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BenefitsLink Health & Welfare Plans Newsletter, ISSN no. 1536-9595. Copyright 2020 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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