Pension & Benefits NetNews — October 30, 2018

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Featured This Week

Employee Benefits Management News

  • Survey finds workers rank health care most important issue facing U.S
  • Employers turning away from shifting health care costs to employees in 2019, Aon says
  • HHS increases penalties for HIPAA noncompliance
  • Proposed rules would permit HRAs to reimburse individual health insurance costs; employees would own coverage

Pension Plan Guide News

  • EBSA proposed regs would clarify ERISA ’employer’ definition to expand access to association retirement plans
  • 2019 OASDI tax and earnings base increases to $132,900; COLA is 2.8%
  • PBGC updates premium rates for 2019
  • PBGC finalizes conforming changes to guaranteed benefits and asset allocation regs concerning owner-participants

Employee Benefits Management News

Survey finds workers rank health care most important issue facing U.S

Workers rank health care as the most critical issue in the country. A new Health and Workplace Benefits Survey conducted by the Employee Benefit Research Institute (EBRI) and Greenwald & Associates looked at workers’ satisfaction and confidence in the health care system as a whole, as well as attitudes toward benefits in the workplace. For details, see ¶2119S.

        (Read Intelliconnect) »

Employers turning away from shifting health care costs to employees in 2019, Aon says

The coming year is expected to usher in better news for U.S. workers when it comes to their health care costs, according to a new actuarial analysis by Aon. For more information, see ¶2119U.

        (Read Intelliconnect) »

HHS increases penalties for HIPAA noncompliance

The Department of Health and Human Services (HHS) has issued a final rule that includes the agency’s annual inflation-related adjustments to civil monetary penalties for certain violations of the Health Insurance Portability and Accountability Act (HIPAA). For more information, see ¶2119V.

        (Read Intelliconnect) »

Proposed rules would permit HRAs to reimburse individual health insurance costs; employees would own coverage

The Departments of Treasury, Health and Human Services, and Labor have released proposed rules that they said would expand access to “affordable, quality health care” through changes to regulations under the Public Health Service Act, the Employee Retirement Income Security Act, and the Internal Revenue Code (Code) that govern health reimbursement arrangements (HRAs) and other account-based group health plans. For more information see ¶2120A.

        (Read Intelliconnect) »

Pension Plan Guide News

EBSA proposed regs would clarify ERISA ’employer’ definition to expand access to association retirement plans

The Department of Labor’s Employee Benefits Security Administration (EBSA) has released proposed regulations intended to expand access to “affordable quality retirement saving options” by clarifying the circumstances under which an employer group or association, or a professional employer organization (PEO)—a human-resource company that contractually assumes certain employment responsibilities for its client employers—may sponsor a workplace retirement plan. The proposal would clarify that employer groups or associations and PEOs can, when satisfying certain criteria, be considered “employers” within the meaning of ERISA Sec. 3(5) for purposes of establishing or maintaining an individual account “employee pension benefit plan” within the meaning of ERISA Sec. 3(2). For more information, see ¶20539o.

        (Read Intelliconnect) »

2019 OASDI tax and earnings base increases to $132,900; COLA is 2.8%

The Social Security Administration (SSA) has announced that Social Security beneficiaries will see an increase in their monthly checks in 2019—2.8%. This cost-of-living adjustment, or COLA, will produce an estimated average monthly benefit of $1,461 for all retired workers in 2019, $39 a month more than in 2018. The COLA increase will be applied to this coming year’s benefits, beginning with benefits for December 2018, which are payable in January 2019. The amount of earnings subject to taxation under FICA and SECA, the “wage base,” is also going up in 2019. The 2019 wage base of $132,900 is $4,500 higher than the 2018 amount of $128,400. For more information, see ¶24023T.

        (Read Intelliconnect) »

PBGC updates premium rates for 2019

The Pension Benefit Guaranty Corporation (PBGC) has updated the premium rates for 2019. Specifically, the per-participant flat-rate premium rate for single-employer plans increases to $80 (up from $74 in 2018). For multiemployer plans, the rate is $29 (up from $28 in 2018). The Bipartisan Budget Act of 2015 (P.L. 114-74) provided the increase in the single-employer rate, according to the PBGC. The increase in the multiemployer rate is due to indexing. For plan years beginning in 2019, the variable rate premium for single-employer plans is $43 per $1,000 of unfunded vested benefits, which is an increase from the 2018 rate of $38. The PBGC explains that $4 of the increase was provided in The Bipartisan Budget Act of 2015 and $1 resulted from indexing. The variable-rate premium is capped for 2019 at $541 times the number of participants (up from the 2018 cap of $523). Note that small employer plans (generally fewer than 25 employees) may be subject to a lower cap. For more information, see ¶161d.

        (Read Intelliconnect) »

PBGC finalizes conforming changes to guaranteed benefits and asset allocation regs concerning owner-participants

The Pension Benefit Guaranty Corporation (PBGC) has issued final rules to conform its guaranteed benefits and asset allocation regulations to changes in the phase-in rules for owner-participants under the Pension Protection Act of 2006 (PPA). ERISA Secs. 4022 and 4044 cover the PBGC’s guarantee of plan benefits and allocation of plan assets, respectively, under terminated single-employer defined benefit plans. Special provisions within these sections apply to owner-participants, who have certain ownership interests in their plan sponsors. PPA made changes to these provisions, which the PBGC has been operating under since they became effective. With these final regulations, the PBGC expects to increase transparency into its operations and provide guidance for plan administrators on the impact of the statutory changes. The final regulations amend the PBGC’s benefit payment regulation by replacing the guarantee limitations applicable to substantial owners with a new limitation applicable to majority owners. In addition, the final regulations amend the PBGC’s asset allocation regulation by prioritizing funding of all other benefits in priority category 4 ahead of those benefits that would be guaranteed but for the new, owner-participant limitation. The final regulations also clarify that plan administrators may continue to use the simplified calculation in the existing rule to estimate benefits funded by plan assets and provide new examples to aid plan administrators in implementation. For more information, see ¶160w

        (Read Intelliconnect) »

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