Spencer’s Benefits NetNews – December 22, 2017

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Featured This Week

New Reports

  • Analysis: Defined benefit limitations, 12/17 (109.1.-1)

    (Read Intelliconnect) »

  • Analysis: IRC Sec. 25B saver’s credit, 12/17 (101.5.-1)

    (Read Intelliconnect) »

  • Analysis: Qualified transportation benefits rules, 11/17 (355.-5)

    (Read Intelliconnect) »

  • Analysis: Long term care insurance, 11/17 (325.2.-1)

    (Read Intelliconnect) »

  • News

    December 22, 2017

    A brief break at Spencer’s Benefits Reports

    Spencer’s Benefits Reports is taking a brief break. Spencer’s news and reports will not be issued December 25 through January 1. Publication will resume on January 2, 2018. Happy Holidays and Happy New Year to all of our subscribers….

            (Read Intelliconnect) »

    Analysis on impact of behaviors that delay retirement for 401(k) savers is released

    Dipping into retirement savings early, suspending contributions to 401(k) plans or both is projected to reduce workers’ retirement savings on average by 14 percent, delaying retirements and costing employers more for salaries and benefits as their workforce ages, according to Massachusetts Mutual Life Insurance Co. (MassMutual), using what it said were new analytic capabilities. MassMutual adds that behaviors that interrupt retirement savings, including taking loans or hardship withdrawals, suspending salary deferrals, or opting out of behavioral finance initiatives such as automatic enrollment or automatic deferral can push back retirements by years, necessitating that workers stay on the job long after the traditional retirement age of 65….

            (Read Intelliconnect) »

    Global medical costs expected to increase in 2018 as local rates of inflation rise

    Global inflation rates are projected to rise around the world in 2018, and cost increases for employer-sponsored medical plans are likely to follow suit, according to a recent report from Aon. Global average cost increases are projected to be 8.4 percent in 2018—nearly three times the projected rate of inflation of 3.1 percent. Aon’s report reflects the medical trend expectations of employer-sponsored medical plans in 99 countries based on reported data from Aon professionals, clients and carriers represented in the portfolio of Aon medical plan business in each country….

            (Read Intelliconnect) »

    Fee-sharing arrangement did not subject non-fiduciary plan trustees to ERISA liability

    Plan trustees did not violate the fiduciary responsibility and prohibited transaction provisions of ERISA by maintaining a fee sharing arrangement with an investment manager or selecting high cost mutual fund shares that produced greater revenue sharing, according to a federal trial court in Massachusetts. The trustees were not fiduciaries, as they had no discretionary authority over the selection of the plan’s investment options, the hiring of the investment manager, or the determination of their compensation….

            (Read Intelliconnect) »

    December 21, 2017

    Tax reform adds paid family leave credit, changes qualified transportation fringe benefits

    The Tax Cuts and Jobs Act (HR 1) passed the Senate in the early morning hours of December 20, with a vote of 51-48. After a procedural hurdle, the House voted on the bill for the second time in the morning on December 20, and it passed with a vote of 224-201. The measure now heads to President Donald Trump, who is expected to sign the legislation quickly. The new law includes several provisions that impact employee benefits plans, such as a new employer credit for paid family and medical leave. Also under the law, employers can no longer deduct expenses for qualified transportation fringe benefits, effective for tax years beginning after December 31, 2017….

            (Read Intelliconnect) »

    Enforcement details of Mental Health Parity and Equity Act come to light

    Since the start of 2016, five non-federal governmental plans have been reviewed by CMS to ensure compliance with the Mental Health Parity and Addiction Equity Act (MPHAEA), according to an enforcement report released by Department of Health and Human Services (HHS). The report also details CMS’ efforts to ensure compliance in four states that either elected not to enforce the MPHAEA, or have failed to substantially enforce it….

            (Read Intelliconnect) »

    Majority of employers have implemented auto 401k enrollment

    Over 60 percent of all defined contribution plans have implemented automatic enrollment, but the majority of those are larger plans, according to a recent survey from the Defined Contribution Institutional Investment Association. The DCIIA Fourth Biennial Plan Sponsor Survey noted that two-thirds of larger plans (those with over $200 million) have implemented auto enrollment, while only 51 percent of small plans (under $200 million)….

            (Read Intelliconnect) »

    December 20, 2017

    Court grants preliminary injunction against Trump’s religious and moral exemptions rules

    The U.S. District Court for the Eastern District of Pennsylvania granted a preliminary injunction enjoining the government from enforcing two new interim Final rules, referred to as the Moral Exemption Rule (82 FR 47792) and the Religious Exemption Rule (82 FR 47838), modifying the Patient Protection and Affordable Care Act (ACA). The court held that the Commonwealth of Pennsylvania had standing to challenge a regulatory action that affected its interest in protecting its women residents. The court further held that the Commonwealth showed a likelihood of success in its claims that the rules were issued in violation of the Administrative Procedure Act (APA) and that they are arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law….

            (Read Intelliconnect) »

    IRS issues January 2018 AFRs

    The January 2018 short-term, mid-term, and long-term applicable federal interest rates (AFRs) have been issued by the IRS. The January mid-term 175 percent AFR (Annual) rate, used to calculate interest charged to the funding standard account for underpayments of quarterly contributions under Code Sec. 412(m), is 3.84 percent….

            (Read Intelliconnect) »

    IRS issues 2017 required amendments list for individually designed plans

    The IRS has released the 2017 Required Amendments List for individually designed qualified retirement plans. The list identifies certain changes in qualification requirements that became effective in 2017 that may require a retirement plan to be amended in order to remain qualified….

            (Read Intelliconnect) »

    December 19, 2017

    2018 standard mileage rates released

    The IRS has released the 2018 optional standard mileage rates that employees, self-employed individuals, and other taxpayers can use to compute deductible costs of operating automobiles (including vans, pickups and panel trucks) for business, medical, moving and charitable purposes….

            (Read Intelliconnect) »

    Reviewing the challenges facing health care quality in the U.S.

    Despite the growing use of quality measures, progress has been slow in improving health care quality in the U.S., and many deficiencies in quality persist. Although incentive programs, improvements to measuring metrics, and other considerations have helped, Congressional Budget Office (CBO) researchers noted in a working paper that many challenges remain. Using initiatives developed and implemented through the Medicare program to illustrate the key issues and challenges that arise in measuring and improving the quality of providers, the CBO examined the state of health care quality in the U.S….

            (Read Intelliconnect) »

    December 18, 2017

    American Benefits Council commends legislation delaying Cadillac Tax

    Ways and Means Republican members unveiled H.R. 4616 on December 12, 2017, which provides relief from the Affordable Care Act’s (ACA’s) employer “pay or play” requirement for 2015 through 2018 and delays the 40 percent excise tax on high-cost employer-sponsored coverage, or “Cadillac Tax,” for one additional year. The bill was introduced by Representatives Mike Kelly (R-PA) and Devin Nunes (R-CA)….

            (Read Intelliconnect) »

    PBGC issues January 2018 interest rates for valuing terminating pension plans

    For single-employer pension plans terminating January through March 2018, and for multiemployer plans involved in a mass withdrawal, the interest rate established by the PBGC for calculating immediate annuities is 2.39 percent, up from the 2.34 percent rate that applied in October through December 2017. The interest rate for calculating immediate lump sums in 2018 is .75 percent, the same rate that applied in December 2017….

            (Read Intelliconnect) »

    Most Americans do not have long term care insurance

    The majority of Americans (75 percent) say they do not currently have long term care (LTC) insurance, according to a recent survey from OneAmerica. Most (53 percent) say they do not have LTC insurance because it is too expensive….

            (Read Intelliconnect) »