Health & Welfare Plans Newsletter

January 17, 2018

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Health Services & Benefit Administrators, Inc.
in CA

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Carlson Capital Management
in MN

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[Guidance Overview]

EEOC Wellness Rules to Go Away Next Year Unless Agency Takes Action
"The EEOC will need to act quickly if it intends to change its workplace EEOC wellness rules. The current rules will continue to apply for 2018 ... Employers may want to consider evaluating their wellness programs for 2019 in light of any new information, although it may come late in the year for some employers."
HUB International

[Advert.]

Now is the time to become a member of ECFC

Sponsored by ECFC [Employers Council on Flexible Compensation]

ECFC is dedicated to maintaining and expanding employee benefit programs on a tax-advantaged basis. Members include employers, TPAs, health plan providers, brokers, payers, providers, payment networks, processors, and financial institutions.


[Guidance Overview]

Tax Law Revises Treatment of Employee Benefits
"[The Tax Cuts and Jobs Act] did eliminate the tax-advantaged status of a number of fringe benefits.... The effective date of these changes leaves little time to revise payroll systems to address these matters. [A table provides] a high-level overview of the benefits that may be affected."
RSM US

[Guidance Overview]

Massachusetts to (Again) Require Health Care Reporting by Employers
"The form must be completed and submitted under oath annually by any employer with 6 or more employees in Massachusetts; and it must disclose whether the employer has offered to pay or arrange for the purchase of health care insurance. If so, the form must include information about premium costs, benefits offered, cost sharing details, eligibility criteria and other information that is 'deemed necessary by the division.' "
Mintz Levin

[Guidance Overview]

Association Health Plans: New Proposed Rule to Help Convert Small Businesses and Self Employed Individuals Into a Status Similar to Large Group (PDF)
"The proposed rule includes protections intended to remedy historical challenges with association health plans (e.g., requiring an AHP to be controlled by its members) in order to make AHPs an attractive opportunity and to prevent AHPs from discriminating against individuals based on health reasons.... This proposed rule reinterprets prior guidance more broadly and modifies some of the requirements."
Epstein Becker Green

DOL Proposes Dramatic Expansion of Association Health Plans
"If finalized as proposed, existing associations, such as trade groups, chambers of commerce, and similar organizations, could offer plans to their members. The rules would also allow the creation of new associations solely for the purpose of providing health coverage, an extreme departure from the past regulatory environment."
HUB International

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Is the Stop-Loss Market Finally Firming?
"Of the 10 largest carriers, the loss ratio position has increased by an astounding 10 basis points over the past five years. Carriers that were once enjoying the profitability of a 71% loss are now staring at a roughly 81% figure, to their dismay. As a frame of reference, typical desired loss ratios are between 60% and 70%."
Frenkel Benefits

Benefits in General

[Guidance Overview]

Disability Claims Regs Become Effective April 1, 2018
"To be subject to the final rule, the important inquiry is not how a plan is characterized (as either a welfare plan or a pension plan) but rather how the determination for disability is made under the terms of the plan.... [If] a claims adjudicator must make a determination of disability in order to decide a claim, the plan is subject to the final rule.... [If] the determination of a disability is made by a party other than the plan itself ... a claim for such benefits is not treated as a disability claim and is not subject to the final rule."
Morgan Lewis

Small Business Benefits Package: What You Need to Know
"79% of employees would prefer more benefits to a pay increase. With this in mind, and the fact that you might save money on taxes by adding to your small business benefits package, the benefits to you can be pretty significant. Offering a small business benefits package to your employees could help you stay competitive without raising everyone's salaries."
eHealth

Executive Compensationand Nonqualified Plans

[Guidance Overview]

Qualified Equity Grants by Private Companies Under New Section 83(i) (PDF)
"Private corporations with broad-based compensatory stock option or RSU programs should evaluate whether resulting shares are qualified stock for which notification requirement applies: If so, confirm that payroll systems and brokerage accounts properly handle differences in income tax and FICA tax timing, and that proper notice is provided to recipients. If not, determine what is necessary to fall within the qualified stock definition to confirm deferral opportunity for employees."
Deloitte

[Guidance Overview]

Impact of Section 162(m) Changes and Transition Relief on Excessive Compensation (PDF)
"[Deferred Tax Assets (DTA)] recognized in the financial statement as of the enactment date related to deferred compensation expense and share-based compensation expense should be evaluated to determine if the new Section 162(m) rules would impact the ability to claim a deduction in the future and adjusted accordingly. Going forward, a DTA should only be recognized for future compensation expense recognized for deferred compensation plans and share-based awards if a tax deduction is expected under the new rules, taking into account transition, when the deferred compensation is paid to the employee and when the share-based awards are exercised or vested."
Deloitte

Bringing Pay-for-Performance Into Focus Requires the Right Lens
"While performance can be measured many ways, the most common method is to use total shareholder return (TSR).... There are many definitions of pay, including reported, realized, and realizable pay. While each definition has its place, [the authors] believe reported and realized pay are less useful in pay-for-performance analyses.... [This] discussion brings the best measure into focus."
Meridian Compensation Partners, LLC

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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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