Pension & Benefits NetNews – December 11, 2018

 

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Featured This Week

 

Employee Benefits Management News

  • City of Austin’s paid leave ordinance declared unconstitutional
  • IRS extends filing deadlines, penalty relief for Forms 1095-B and 1095-C
  • Department of Labor releases 2018 Form M-1 and top 10 filing tips
  • Midsize employers must utilize multiple strategies to be successful at controlling health care costs, expert says

Pension Plan Guide News

  • IRS issues proposed regs on hardship distributions from 401(k) plans
  • DOL issues proposed exemption related to auto portability of retirement account assets
  • IRS releases 2018-2019 Priority Guidance Plan

 

Employee Benefits Management News

 

City of Austin’s paid leave ordinance declared unconstitutional

Finding that a City of Austin ordinance requiring private employers to provide paid sick leave to their employees was inconsistent with the Texas Minimum Wage Act, a Texas Court of Appeals remanded the case for issuance of a temporary injunction barring enforcement of the ordinance. For details, see ¶2120T.

        (Read Intelliconnect) »

IRS extends filing deadlines, penalty relief for Forms 1095-B and 1095-C

Insurers, self-insuring employers, other coverage providers, and applicable large employers now have until March 4, 2019, to provide individuals with Forms 1095-B, Health Coverage, or Forms 1095-C, Employer-Provided Health Insurance Offer and Coverage. This is an extension from the original due date of January 31. For more information, see ¶2120W.

        (Read Intelliconnect) »

Department of Labor releases 2018 Form M-1 and top 10 filing tips

The Department of Labor’s Employee Benefits Security Administration (EBSA) today released the 2018 Form M-1 and related instructions. Administrators of Multiple Employer Welfare Arrangements (MEWAs) that provide medical benefits, including Association Health Plans (AHPs), must file the Form M-1 with the Department annually and following certain events, such as a MEWA’s expansion into a new state. For more information, see ¶2120Y.

        (Read Intelliconnect) »

Midsize employers must utilize multiple strategies to be successful at controlling health care costs, expert says

Employers that use multiple best practice strategies are the most successful at controlling health care costs, according to Elissa Rosenbaum, total health management strategist at Mercer. Speaking at a recent CFO.com and Mercer webinar, Reinventing Benefits Strategies for Midsize Businesses, Rosenbaum stressed that employers using the most best practice strategies consistently report lower cost trends. For more information see ¶2121A.

        (Read Intelliconnect) »

Pension Plan Guide News

 

IRS issues proposed regs on hardship distributions from 401(k) plans

The IRS is proposing to amend regulations on hardship distributions from 401(k) plans to reflect changes in the law. In particular, the proposed regulations would reflect changes in the Bipartisan Budget Act of 2018 (P.L. 115-123), the Tax Cuts and Jobs Act (P.L. 115-97), and the Pension Protection Act of 2006 (P.L. 109-280). The IRS is also proposing changes to reflect legislation concerning distributions for individuals serving in the armed services. For simpler administration, the regulations provide certain safe harbors that may be used to determine whether a distribution is made on account of an employee’s hardship. Specifically, IRS Reg. Sec. 1.401(k)-1(d)(3)(iii)(B) provides a safe harbor under which distributions for six types of expenses are deemed to be made on account of an immediate and heavy financial need. One of the six types is “expenses for the repair of damage to the employee’s principal residence that would qualify for the casualty deduction under section 165 (determined without regard to whether the loss exceeds 10% of adjusted gross income).” In addition, IRS Reg. Sec. 1.401(k)-1(d)(3)(iv)(E) provides a safe harbor under which a distribution is deemed necessary to satisfy an immediate and heavy financial need. Under that safe harbor, an employee must first obtain all currently available distributions, and nontaxable plan loans from the plan and any other plan maintained by the employer. Also, an employee’s ability to make elective contributions and employee contributions to the plan (and any other plan maintained by the employer) must be suspended for at least six months after receipt of the hardship distribution. For more information, see ¶20264x.

        (Read Intelliconnect) »

DOL issues proposed exemption related to auto portability of retirement account assets

The Department of Labor’s Employee Benefits Security Administration (EBSA) has issued a proposed individual exemption involving Retirement Clearinghouse, LLC (RCH) that concerns the consolidation of small retirement savings accounts in 401(k) plans and individual retirement accounts (IRAs) when workers change jobs. The Department of Labor (DOL) said that it is looking for innovation in the area of retirement asset portability, invites comments on the proposed exemption, and encourages additional proposals. EBSA has also released an advisory opinion addressing a request from RCH regarding the status of certain parties as “fiduciaries” as a result of actions undertaken as part of RCH’s proposed auto portability program. RCH’s auto portability program would seek to improve asset allocations by consolidating small retirement savings accounts, eliminate duplicative fees for small retirement savings accounts, and reduce leakage of retirement savings from the tax-deferred retirement saving system. Employees would be told that their 401(k) savings will be moved to tax-favored IRAs when they leave a job or if the plan is terminated, and that the employee’s savings in the IRA then would be automatically transferred to the 401(k) plan of the new employer when the employee finds a new job. For more information, see ¶ 161p.

        (Read Intelliconnect) »

IRS releases 2018-2019 Priority Guidance Plan

Numerous employee benefits projects are included in the IRS’s 2018-2019 Priority Guidance Plan. The Plan describes areas in which the IRS intends to issue final regulations, proposed regulations, and other guidance, including regularly scheduled guidance, such as interest rates and COLAs. The Plan also includes burden reduction projects. The IRS notes that it may update the Plan during the plan year to reflect additional items that have become priorities and guidance that the IRS has issued during the plan year. The plan continues to prioritize the implementation of the Tax Cuts and Jobs Act (P.L. 115-97) and to reflect the deregulatory policies and reforms described in Executive Orders 13789 and 13777. In the retirement benefits area, the IRS plans to deliver regulations on the application of the normal retirement age regulations under Code Sec. 401(a) to governmental plans; notice requirements under Code Sec. 411(a)(11); and life expectancy and distribution period tables for purposes of the required minimum distribution rules; among others. For more information, see ¶17203y35.

        (Read Intelliconnect) »

 

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