Pension & Benefits NetNews – November 28, 2017

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Featured This Week

Employee Benefits Management News

  • IRS issues sample shared employer responsibility payment letter
  • MEWA has $26M in unpaid claims, so DOL issues first Sec. 521 cease and desist order, court grants TRO
  • Free health insurance for former employee relieved employer of liability for COBRA violation
  • Annual survey reveals highest rate of employers offering healthcare benefits since 2013 despite concerns about looming changes

Pension Plan Guide News

  • PBGC updates premium rates for 2018
  • PBGC creates new pilot program for mediation of certain Termination Liability Collection and Early Warning Program cases
  • IRS releases 2017-2018 Priority Guidance Plan

Employee Benefits Management News

IRS issues sample shared employer responsibility payment letter

The IRS has issued a sample of Letter 226J, which an applicable large employer (ALE) is likely to receive if the IRS determines that, for at least one month in the year, one or more of the ALE’s full-time employees was enrolled in a qualified health plan for which a premium tax credit was allowed. For more information, see ¶2111B.

        (Read Intelliconnect) »

MEWA has $26M in unpaid claims, so DOL issues first Sec. 521 cease and desist order, court grants TRO

In a first-of-its-kind move, the Department of Labor has used its authority under Section 521 of ERISA to issue ex parte cease and desist orders to prevent further marketing of a plan for which the defendants have failed to pay out more than $26 million for participants’ health benefit claims in the AEU Holdings LLC Employee Benefit Plan, a Multiple Employer Welfare Arrangement (MEWA). For more information, see ¶2111D.

        (Read Intelliconnect) »

Free health insurance for former employee relieved employer of liability for COBRA violation

Despite the fact that a software company failed to notify an employee of his COBRA benefits immediately following his termination, it was not liable for statutory penalties because he suffered no prejudice as a result of the COBRA violation, a U.S. District Court for the Southern District of Florida has ruled. For more information, see ¶2111F.

        (Read Intelliconnect) »

Annual survey reveals highest rate of employers offering healthcare benefits since 2013 despite concerns about looming changes

A new survey from the national non-profit Transamerica Center for Health Studies (TCHS) shows that nearly two in three employers (66 percent) say their company is extremely/very aware of the potential changes to healthcare policy coming out of Washington D.C., and more than a quarter (26 percent) of employers report that the most common fear among their employees is losing healthcare due to a pre-existing condition. For more information see ¶2111I.

        (Read Intelliconnect) »

Pension Plan Guide News

PBGC updates premium rates for 2018

The per-participant flat premium rate for plan years beginning in 2018 is $74 for single-employer plans (up from a 2017 rate of $69) and $28 for multiemployer plans (no change from 2017). The increase in the single-employer rate was provided in The Bipartisan Budget Act of 2015. For plan years beginning in 2018, the variable-rate premium (VRP) for single-employer plans is $38 per $1,000 of unfunded vested benefits (UVBs), up from a 2017 rate of $34. This $4 increase was provided in The Bipartisan Budget Act of 2015 (BBA 2015). Although the VRP rate is subject to indexing in addition to the BBA 2015 increase, indexing had no effect for 2018. For 2018, the VRP is capped at $523 times the number of participants (up from a 2017 cap of $517). Plans sponsored by small employers (generally fewer than 25 employees) may be subject to a lower cap. For more information, see ¶154f.

        (Read Intelliconnect) »

PBGC creates new pilot program for mediation of certain Termination Liability Collection and Early Warning Program cases

The Pension Benefit Guaranty Corporation announced a new pilot program to offer mediation in certain Termination Liability Collection and Early Warning Program cases. PBGC’s Pilot Mediation Project will allow parties to resolve cases with the assistance of a skilled, neutral and independent dispute resolution professional in a timely and cost-effective manner. The mediation project is part of the agency’s ongoing efforts to make it easier for sponsors to maintain their pension plans. “We want our customers to know we’re listening to them and we want to improve their experience in working with us,” said PBGC Director Tom Reeder. “By providing an alternative dispute resolution option for employers who sponsor ongoing and terminated plans, we expect to save time and money for both the government and our stakeholders.” For more information, see ¶154d.

        (Read Intelliconnect) »

IRS releases 2017-2018 Priority Guidance Plan

Numerous employee benefits projects are included in the IRS’s 2017-2018 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, as in the past, it intends to update the Plan on a quarterly basis, and that it will be guided by burden-reducing principles and policies. For more information, see ¶17203y34.

        (Read Intelliconnect) »

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