Pension & Benefits NetNews – July 30, 2019

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Featured This Week

Employee Benefits Management News

  • DOL advisory opinion confirms Ace Hardware plan qualifies as an AHP and MEWA
  • IRS expands list of preventive care for HDHP participants to include care for chronic conditions
  • House approves bipartisan repeal of ACA’s Cadillac tax
  • IRS updates premium tax credit table, required contribution percentage

Pension Plan Guide News

  • PBGC issues proposed regs that correct, clarify, and improve several reporting and premium rate regs
  • IRS issues proposed regs providing exception to MEP unified plan rule
  • President appoints seven PBGC Advisory Committee members

Employee Benefits Management News

DOL advisory opinion confirms Ace Hardware plan qualifies as an AHP and MEWA

In DOL Advisory Opinion 2019-01A, the Department of Labor has confirmed that the proposed Ace Hardware Corporation Cooperative Group Health Plan would qualify as an association health plan (AHP) and a multiple employer welfare arrangement (MEWA) under ERISA, as long as the plan is adopted and operated as described to the DOL. For more information, see ¶2126D.

        (Read Cheetah) »

IRS expands list of preventive care for HDHP participants to include care for chronic conditions

In Notice 2019-45, the IRS has expanded the list of preventive care benefits that may be provided by a high deductible health plan (HDHP) to include certain care for chronic conditions. For more information, see ¶2126H.

        (Read Cheetah) »

House approves bipartisan repeal of ACA’s Cadillac tax

The House has approved a bipartisan repeal of the Affordable Care Act’s (ACA) so-called Cadillac excise tax on certain high-cost insurance plans. For more information see ¶2126J.

        (Read Cheetah) »

IRS updates premium tax credit table, required contribution percentage

The IRS has updated the applicable percentage table used to calculate an individual’s premium tax credit and required contribution percentage for plan years beginning after 2020. For more information see ¶2126L

        (Read Cheetah) »

Pension Plan Guide News

PBGC issues proposed regs that correct, clarify, and improve several reporting and premium rate regs

The Pension Benefit Guaranty Corporation (PBGC) has released proposed regulations that make technical corrections, clarifications, and improvements to regulations on reportable events notifications, annual financial and actuarial information reporting, standard terminations filing, and premium rates. The PBGC states that the changes being made result from its ongoing review of the effectiveness and clarity of its rules and from input from stakeholders. The proposed regulations are eliminating possible duplicative reporting of active participant reductions, clarifying when a liquidation occurs, and providing additional examples for active participant reduction, liquidation, and change in controlled group events. The PBGC is amending its regulations on annual financial and actuarial information reporting by removing a requirement to submit individual financial information for each controlled group member, adding a new reporting waiver and clarifying others, and providing guidance on assumptions for valuing benefit liabilities for cash balance plans. The PBGC is amending its regulations to expressly state that a plan does not qualify for the variable rate premium exemption for the year in which it completes a standard termination if it engages in a spinoff in the same year. However, the PBGC will make an exception when the spinoff is de minimis (i.e., generally less than 3 percent of the assets are spun off). For more information, see ¶20539r.

        (Read Cheetah) »

IRS issues proposed regs providing exception to MEP unified plan rule

The IRS has issued proposed regulations that would provide an exception to the unified plan rule for defined contribution multiple employer plans (MEPs), if certain conditions are met. The purpose is to reduce the risk of plan disqualification due to noncompliance by other participating employers. The regulations are proposed to apply on or after the publication date of final regulations in the Federal Register. They cannot be relied upon until then. Under current regulations for both MEPs and multiemployer plans, a qualification or operational failure by one employer can result in a total plan failure for all participating employers. By creating an exception to the unified plan rule, the proposed regulations would ensure that, in certain circumstances, compliant participating employers will continue to maintain a qualified plan. According to the IRS, the proposed regulations are expected to encourage the establishment of new defined contribution MEPs and increase the participation of employers in existing defined contribution MEPs. Under the proposed regulations, an eligible defined contribution MEP would qualify for an exception to the unified plan rule because of certain qualification failures due to actions or inaction by a participating employer, if certain conditions are met. The exception would be available if the participating employer is responsible for a qualification failure that it is unable or unwilling to correct. It would also be available if the participating employer is nonresponsive to the plan administrator’s reasonable and timely requests for information or for action. For more information, see ¶20264z.

        (Read Cheetah) »

President appoints seven PBGC Advisory Committee members

President Trump has appointed the following members to the Pension Benefit Guaranty Corporation (PBGC) Advisory Committee: Henry Charles Eickelberg of Florida (representing the interests of employers), Jeanmarie Grisi of New Jersey (representing the interests of employers), Babette Ann Ceccotti of New Jersey (representing the interests of employee organizations), Guy Pinkman of Nebraska (representing the interests of employee organizations), Donald J. Butt of Colorado (representing the interest of the general public), Regina T. Jefferson of the District of Columbia (representing the interest of the general public), and Jackson Miller of Florida (representing the interest of the general public). Eickelberg will also serve as the chair of the Advisory Committee. For more information, see ¶165y.

        (Read Cheetah) »

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