Health & Welfare Plans Newsletter

April 12, 2018

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Jobs

401(k) Administrator
Duncan Financial Group
in PA, Telecommute

Retirement Plan Manager
Stoel Rives LLP
in OR

Life Insurance Supervisor
1199SEIU Benefit and Pension Funds
in NY

Retirement Plan Consultant
Benefit Plans Administrative Services, Inc. [BPAS]
Telecommute

Retirement Planning Consultant
Transamerica
in MI, Telecommute

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[Official Guidance]

Text of IRS FAQs on Section 45S: Employer Credit for Paid Family and Medical Leave
"Who may claim the employer credit for paid family and medical leave? ... Who is a qualifying employee? ... What is 'family and medical leave' for purposes of the paid family and medical leave credit? ... How is the paid family and medical leave credit calculated? ... How does the credit impact an employer's deduction for the wages paid to an employee while on family and medical leave or claim for any other general business credits?"
Internal Revenue Service [IRS]

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[Guidance Overview]

Unpacking the Final 2019 Payment Notice, Part 2
"[T]he final rule raises the default threshold for review of 'unreasonable' premium increases from the current 10 percent to 15 percent ... [S]tates with an effective rate review program must post proposed rate increases all together and final rate increases all together, and give CMS five days' notice before posting.... The final rule includes significant changes to current medical loss ratio (MLR) standards."
Katie Keith, in Health Affairs

[Guidance Overview]

IRS Clarifies Tax Treatment of Qualified Transportation Fringe Benefits
"The IRS has now clarified that an employer cannot deduct qualified transportation fringe benefit amounts, even if the benefit is withheld from an employee's paycheck. The withholding would still be pre-tax for the employee.... The good news is that it appears these benefits are still excluded from FICA and FUTA ... [S]ome cities ... require employers to offer commuting benefits to employees in those cities. In some cases, those ordinances require that the benefit be provided pre-tax."
HUB International

Incorrect TIN Error Message Problem Lingers, Causing Confusion -- Employers Can Continue to Ignore
"If an employer receives a TIN error message as a result of an incorrect TIN on a Form 1095-C, the employer can ignore the error message until the IRS provides a formal notice. [The authors] are unaware of the IRS providing formal notice to any employer as a result of filing the Forms 1095-C with an incorrect TIN. If an employer receives a TIN error message as a result of a missing TIN, the employer needs to follow the solicitation procedures outlined [in this article]."
Accord

Federal Enforcement Isn't the Only HIPAA Concern: States Flex Their Muscles
"Despite the lack of significant settlements for HIPAA enforcement by the federal Office of Civil Rights (OCR) so far in 2018, states have not hesitated to patrol privacy and security breach activity and take action against perceived violations.... Two recent settlements suggest that states are ramping up their enforcement activities."
McGuireWoods, LLP

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Online Learning Course: Family and Medical Leave Act (FMLA)

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Airlines Association Files Another Lawsuit Challenging Massachusetts Paid Sick Leave Law
"On behalf of its members, Airlines for America seeks declaratory and injunctive relief to invalidate Massachusetts' Earned Sick Time Law and to prohibit its enforcement with respect to flight crew and ground crew personnel. This is the second lawsuit filed by the airline association in recent months challenging paid sick leave laws."
Polsinelli PC

GOP Lawmakers Expected to Draft Bill to Expand Telehealth Services Under Medicare
"A broad coalition of health care stakeholders who are lobbying for the measure says it could save the government a lot of money while improving care for many Medicare beneficiaries. The bill has yet to be completed."
Morning Consult

Early Results Show Real-Time Data Nudges Prescribers Toward Cheaper Drugs
"[I]nitial data released by CVS ... shows prescribers that accessed the real-time information switched to a drug covered under the patients plan 85% of the time. Prescribers using the tools switched patients to a lower cost alternative 30% of the time, saving an average of $75 for each prescription."
FierceHealthcare

Executive Compensationand Nonqualified Plans

[Guidance Overview]

Tax-Exempt Executive Compensation Under Fire
"To which tax-exempt entities do the new taxes apply? ... Who is a covered employee? ... What is an 'Excess Parachute Payment' for purposes of the Parachute Tax? ... What is 'Remuneration' for purposes of the Excess Compensation Tax? ... Do the Excess Compensation Tax and the Parachute Tax apply to individuals providing services through another entity, a partnership, or in a capacity other than that of an employee? ... What should tax-exempt entities be doing at this time, and what, if any, planning opportunities are there to address these new taxes?"
Michael Best

Selected Discussionson the BenefitsLink Message Boards

Delinquent 5500 Needed for Sold-Off Division?
Real Estate Investment Company owned 3 businesses, seemingly unrelated (they are in different states and are different operations). Benefit plans are operated independently at each location. But there is common ownership. One of the 3 businesses was sold off 2 years ago. Company now realizes that it needed to file welfare plan 5500s, so it's going back in time under DFVC, combining the two current locations, with the intent to reduce the number of delinquent past filings. Moving forward they will file as one wrap plan. To what extent should they worry about the sold-off location for those years?
BenefitsLink Message Boards

Premium for Voluntary Life Insurance Increased Mid-Year Under Cafeteria Plan
Employer offers voluntary life insurance with premiums based on age bands. Without realizing it, they have been administering the plan such that salary reductions under the cafeteria plan automatically increased mid-year when the life insurance premiums went up (i.e., when a participant reached a new age band such as attaining his or her 40th birthday). Is such a practice consistent with 26 CFR 1.125-4(f)(2)(i) if the plan document allows? That section states: "(i) Automatic changes. If the cost of a qualified benefits plan increases (or decreases) during a period of coverage and, under the terms of the plan, employees are required to make a corresponding change in their payments, the cafeteria plan may, on a reasonable and consistent basis, automatically make a prospective increase (or decrease) in affected employees' elective contributions for the plan." Also, if the practice is OK under that reg but the cafeteria plan document is silent, could the document be amended retroactively to correct?
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Press Releases

DOL Investigation Results in Georgia Contractor Being Placed on Ineligible Bidders List Employee Benefits Security Administration [EBSA], U.S. Department of Labor

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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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