Health & Welfare Plans Newsletter

January 3, 2018

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Employee Benefits Associate
Wiggin and Dana LLP
in CT

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Alpha Pension Group
in MA, Telecommute

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Bloomberg BNA
in VA

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[Guidance Overview]

New Tax Rules for Transportation Fringe Benefits
"Many employers will elect to maintain their current policies ... But other employers may decide that retaining the tax deduction (or avoiding the UBIT) is sufficient justification to convert their transportation assistance programs into after-tax arrangements.... [T]he tax rules applicable to employees have not changed (other than for biking-related assistance), so maintaining the status quo would also carry the advantage of allowing time for the dust to settle before any employee communications are needed."
Spencer Fane

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Employer Health Care Cost & Quality Congress | Washington DC

Sponsored by World Congress

4/29-5/2/2018 in Washington DC. This event brings together Employers, Brokers, and TPAs. Qualified HR & Benefits Professionals may attend as our guest ? See website for details/restrictions & to apply.


[Guidance Overview]

Tax Law Changes to Employee Fringe Benefits
"The changes are somewhat arbitrary and sporadic. Basically, employer payment or reimbursement of an employee's business expenses (so-called working condition fringe benefits) will continue to be tax-free to the employee and tax deductible by the employer. But certain fringe benefits that still can be provided tax-free to an employee will no longer be tax deductible by the employer. On the other hand, if an employer chooses to provide the affected fringe benefits on a taxable basis to the employee (i.e., as W-2 wages), the employer will be able claim a tax deduction for the taxable benefits."
Jackson Lewis P.C.

[Guidance Overview]

Overview of Dependent Care Nondiscrimination Testing
"To reduce the likelihood of failure, an employer may consider capping HCE DCAP elections at an amount below the $5,000 maximum. Some employers cap HCE elections during open enrollment, before the plan year starts, to help pass the test. Others wait to cap HCEs until tests are conducted during the plan year.... If the plan is at risk of failing the eligibility test, the group eligible for the plan would need to be expanded. Use of the excludable employee categories can also help test results."
Conduent

Wellness Compliance: The Plot Thickens
"H.R. 1313, the Preserving Employee Wellness Programs Act , was recently discharged by several Congressional Committees and recommended for approval by the House of Representatives. If it passes, wellness compliance would largely be defined by the nondiscrimination rules under [HIPAA], as modified by the [ACA], thus rendering the ADA and GINA rules extraneous."
healthstat

Employee Access to Wellness Programs in 2017
"In private industry, access to wellness programs ranged from 22 percent of workers in service occupations to 55 percent of workers in professional and related occupations. In state and local government, 59 percent of workers in service occupations had access to wellness programs, as did 66 percent of workers in production, transportation, and material moving occupations."
U.S. Bureau of Labor Statistics [BLS]

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Drugmakers Raise 2018 Prices by More Than Inflation Rate But Stay Within Self-Imposed 10 Percent Limit
"Allergan Inc raised prices on 18 different drugs, including dry eye treatment Restasis and irritable bowel syndrome drug Linzess, by 9.5 percent ... Amgen raised the price on its blockbuster rheumatoid arthritis and psoriasis drug Enbrel by 9.7 percent and Teva increased prices on its ProAir HFA and ProAir RespiClick asthma inhalers by 6 and 3 percent, respectively."
Reuters

Why the U.S. Spends So Much More Than Other Nations on Health Care
"American personal health spending grew by about $930 billion between 1996 and 2013, from $1.2 trillion to $2.1 trillion (amounts adjusted for inflation).... After accounting for those kinds of demographic factors, which we can do very little about, health spending still grew by about $574 billion from 1996 to 2013.... Did we do more for patients in each health visit or inpatient stay? Did we charge more? The JAMA study found that, together, these accounted for 63 percent of the increase in spending from 1996 to 2013."
The New York Times; subscription may be required

[Opinion]

The Frustration of Fraudulent Claims
"Despite all its quirky billing and procedure codes that add huge administrative burden ... the carrier payment system based upon thousands of CPT codes and 'modifiers' continues to be too provider-friendly. The complexity of the system has enabled unfair gamesmanship and misbehavior to the detriment of the payers (carriers and clients alike). We need a simpler and more responsive payment system."
Frenkel Benefits

Benefits in General

Five Plan Sponsor Resolutions for 2018
"[1] I will review the documents sent by my vendor before we send them out.... [2] I will understand the provisions of my plan.... [3] I will consult advisers when I need them.... [4] I will know the deadlines for taking important actions ... [5] I will document our plan decisions."
Cohen & Buckmann, P.C.

Executive Compensationand Nonqualified Plans

[Guidance Overview]

Immediate Action Needed Due to Reduction in Maximum Tax Withholding on Equity Compensation
"As a result of conflicting language between existing Treasury regulations and the revised rates in the Act, it is not clear whether the new withholding rate for wages under $1 million will be 22% or 28%.... Under the financial accounting rules, if shares are withheld in an amount in excess of the maximum statutory rate in the applicable jurisdiction, the award must be classified and accounted for as a liability, resulting in mark-to-market accounting."
Morgan Lewis

[Guidance Overview]

New Opportunity to Defer Tax on Certain Equity Awards and Repeal of Performance-Based Exception to 162(m)
"The Tax Bill creates a new Section 83(i) of the tax code, which allows certain employees of private companies to defer taxation on the exercise of certain stock options or the settlement of restricted stock units for up to 5 years.... Because Section 83(i) requires that 80% of all U.S. employees to be participants, it is likely that only early stage corporations will be able to utilize this deferral opportunity."
Mintz Levin

[Guidance Overview]

Executive Compensation Arrangements for Tax-Exempt Organizations
"This practice note sets out important legal and tax considerations when developing executive compensation arrangements for tax-exempt organizations. It provides guidance on practical steps for attorneys advising their tax-exempt clients on various aspects of executive total compensation packages, including deferred compensation, incentive compensation, severance, vacation, and fringe benefits."
Venable LLP

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BenefitsLink Health & Welfare Plans Newsletter, ISSN no. 1536-9595. Copyright 2018 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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