Spencer’s Benefits Reports NetNews – December 20, 2013


About this Newsletter

The Spencer’s Benefits Reports is a summary of the week’s news items posted
in the WHAT’S NEW pages of Spencer’s Benefits Reports
For questions regarding this email service, contact Customer Service at (800)449-9525.

NetNews Subscription

Want to receive these Newsletters via E-mail?

hr.cch.com Resources

About Links in this Newsletter

To access the IntelliConnect™ full text documents you must be a subscriber
to the Spencer’s Benefits Reports IntelliConnect product
(depending on the link*).

Links within news stories display full text documents including legislation, regulations,
court decisions, rulings and government reports.

The first time you click on a link you will be taken to the IntelliConnect login page, where you will need to enter your ID and password. Subsequent links will take you directly to the desired document.


If you aren’t a subscriber call 800-449-9525, or let us contact you about,

Email Us

Contact us by sending an e-mail to


Featured This Week

New Reports

  • Analysis: Limited Tax Exclusion For Long Term Care Insurance, 12/13 (325.2.-1)

(Read Intelliconnect) »

  • Analysis: Sec. 415(c) Defined Contribution Limitations, 12/13 (109.2.-1)


(Read Intelliconnect) »

  • Analysis: Sec. 25B Provides “Saver’s Credit” Of Up To $2,000, 12/13 (101.5.-1)


(Read Intelliconnect) »

  • Survey: 2013 PBGC Interest Rates, 11/13 (619.5.-51)


(Read Intelliconnect) »

  • Analysis: General Rules For Sec. 125, 12/13 (351.-1)


(Read Intelliconnect) »


December 20, 2013

Text: IRS, Notice 2014-6, Transition Relief With Respect To The Tax Credit For Employee Health Insurance Expenses Of Certain Small Employers

(Read Intelliconnect) »

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 23 through January 1. Publication will resume on Jan. 2, 2014. Happy Holidays and Happy New Year to all of our subscribers.

(Read Intelliconnect) »

IRS Provides Transition Relief For Small Businesses Unable To Offer Qualified Health Plan In 2014

In Notice 2014-6, the Internal Revenue Service has issued transition relief allowing small businesses to take advantage of the employer health insurance credit under Code Sec. 45R, even though they are unable to offer a qualified health plan (QHP) in 2014 through a Small Business Health Options Program (SHOP) Exchange because there are no QHPs available in the county in which they have their primary business address. Sec. 45R offers a tax credit to certain small employers that provide health insurance coverage to their employees (eligible small employers). The credit generally is available for tax years beginning after 2009. The transition relief applies to periods after December 31, 2013…

(Read Intelliconnect) »

House Passes Budget Bill That Includes Provision To Increase PBGC Premiums

On December 12, the House passed the Bipartisan Budget Bill of 2013 (HJRes 59) which includes a provision that would increase both flat-rate premiums and variable-rate premiums to reduce the deficit of the Pension Benefit Guaranty Corporation (PBGC). The Senate is expected to consider the measure. The Obama Administration supports passage of the bill, which was negotiated by House Budget Committee Chairman Paul Ryan (R-OH) and Senate Budget Committee Chairman Patty Murray (D-WA)…

(Read Intelliconnect) »

Employees Are More Active In Managing Their Health After Enrolling In HSA

Employees who contribute to health savings accounts (HSAs) generally become more engaged in managing their health after enrolling, according to recent research from Buck Consultants. The survey found that 51 percent of respondents set aside more money for potential medical costs than before they had HSAs. In addition, 29 percent have more discussions with their doctors about the cost of care, and 13 percent more actively manage their chronic disease…

(Read Intelliconnect) »

December 19, 2013

Text: IRS, Notice 2014-1, Cafeteria Plans, FSAs, And HSAs—Elections And Reimbursements For Same-Sex Spouses Following Windsor Supreme Court Decision

(Read Intelliconnect) »

IRS Issues Guidance On Post-DOMA Benefits Issues

The Internal Revenue Service has updated its online frequently asked questions (FAQs) on the impact on employee benefits of the Supreme Court’s decision in
Windsor. In that case, the Supreme Court struck down Section 3 of the Defense of Marriage Act of 1993 (DOMA). The IRS also has issued Notice 2014-1, which amplifies the guidance provided by Rev. Rul. 2013-17, on the application of the rules under Sec. 125 relating to cafeteria plans, including health and dependent care flexible spending arrangements (FSAs), and Sec. 223 relating to health savings accounts (HSAs), to the participation by same-sex spouses in certain employee benefit plans. The guidance is in question-and-answer format and addresses such issues as midyear election changes, FSA reimbursements, and contribution limits for HSAs and dependent care assistance programs. The notice is effective as of Dec. 16, 2013…

(Read Intelliconnect) »

ERISA Plan’s Three-Year Limit On Filing Suit Is Enforceable Despite Its Start Before Exhaustion Of Internal Review Process

An ERISA plan’s three-year limitations period for judicial review of an adverse benefit determination is enforceable, the Supreme Court has ruled unanimously. The long-term disability plan’s limitations provision, which required that any lawsuit to recover benefits pursuant to the judicial review provision in ERISA Sec. 502(a)(1)(B) be filed within three years after “proof of loss” was due, was reasonable. In addition, there is no controlling statute that prevents the provision from taking effect. As such, the Court affirmed the Second Circuit’s decision that a plan participant’s claim for benefits was untimely because she filed her action outside the policy-prescribed, three-year statute-of-limitations period. The case is
Heimeshoff v. Hartford Life & Accident Insurance Co. (No. 12-729)…

(Read Intelliconnect) »

Democrats Introduce Federal Paid FMLA Leave Bill

Legislation that would create paid family and medical leave at the federal level was introduced on December 12 by Democrats in the House and Senate. The Family and Medical Insurance Leave (FAMILY) Act would establish a national paid family and medical leave insurance program, “ensuring that American workers would no longer have to choose between a paycheck and caring for themselves or a family member,” according to bill sponsors…

(Read Intelliconnect) »

December 18, 2013

Text: IRS, Notice 2013-74, In-Plan Rollovers To Designated Roth Accounts In Retirement Plans

(Read Intelliconnect) »

Text: HHS, Interim Final Rule, Maximizing Jan. 1, 2014 Coverage Opportunities

(Read Intelliconnect) »

Text: IRS, Notice 2013-84, 2013 Cumulative List Of Changes In Plan Qualification Requirements

(Read Intelliconnect) »

IRS Clarifies Rules Applicable To In-Plan Roth Rollovers

In Notice 2013-74, the Internal Revenue Service has clarified the rules governing in-plan rollovers to Roth accounts in 401(k), 403(b), and governmental 457(b) plans. The guidance addresses in-plan Roth rollovers of otherwise nondistributable amounts, as authorized by the American Taxpayer Relief Act of 2012, clarifying: amounts eligible for rollover; the distribution restrictions applicable to the rolled over amounts; the need for a 402(f) rollover notice; and the deadline for required plan amendments. The guidance also provides rules applicable to all in-plan Roth rollovers, indicating that a plan may restrict the type of contributions eligible for an in-plan Roth rollover and the frequency of such rollovers…

(Read Intelliconnect) »

Enrollment Deadline For January 1 Health Plan Coverage Extended To December 23

The Department of Health and Human Services (HHS) has issued an interim final rule amending the deadline for individuals to select qualified health plans (QHPs) through any health insurance exchange. The deadline for enrolling for a Jan. 1, 2014, effective date has been changed from Dec. 15, 2013, to December 23. The interim final rule was published in the December 17
Federal Register

(Read Intelliconnect) »

IRS Issues 2013 Cumulative List Of Changes In Plan Qualification Requirements

The Internal Revenue Service has issued its 2013 Cumulative List of Changes in Plan Qualification Requirements. The 2013 Cumulative List is to be used by plan sponsors and practitioners submitting determination letter applications for plans during the period beginning Feb. 1, 2014 and ending Jan. 31, 2015…

(Read Intelliconnect) »

Indiana And Schools Sue To Block Imposition Of Employer Mandate Penalty By IRS

Twenty-four school corporations have joined 15 others, along with the State of Indiana, in a lawsuit against the Internal Revenue Service, contending that final regulations issued by the IRS in May 2012 impermissibly expanded the definition of the word “Exchange,” for purposes of the health insurance premium tax credit, to include not just health care exchanges run by individual states, but also those run by the federal government. The employer mandate penalty is triggered when an employee purchases insurance through a federally-run or state-run exchange and receives a health insurance premium subsidy. The penalty is $2,000 per full-time employee, starting in 2015. A full-time employee, for purposes of the penalty, is one who works at least 30 hours per week. The case is
State of Indiana v. Internal Revenue Service (No. 1:13-cv-1612)…

(Read Intelliconnect) »

December 17, 2013

Benefits Were 30.9 Percent Of Total Compensation In September 2013, BLS Finds

Employer-provided benefits costs for civilian workers in private industry and state and local governments in September 2013 averaged $9.61 per hour worked, accounting for 30.9 percent of total compensation costs, which averaged $31.16 per hour worked. The cost of benefits as a percentage of compensation has risen in the past three years from 27.4 percent of total compensation, although that percentage has been relatively stable over the last three years. These are among the findings of the September 2013
Employer Costs for Employee Compensation report, produced quarterly by the Bureau of Labor Statistics (BLS)…

(Read Intelliconnect) »

Employers Are Taking Steps To Increase Employees’ Retirement Savings

A growing number of employers are placing greater emphasis on improving and institutionalizing their 401(k) investment lineups to boost participation returns and increase savings levels, according to a recent survey from consultant Aon Hewitt…

(Read Intelliconnect) »

December 16, 2013

Federal Interest Rates Announced For Pensions

The following interest rates have been announced for use in the operation and administration of qualified pension plans…

(Read Intelliconnect) »

PBGC Issues January 2014 Interest Rates For Valuing Terminating Pension Plans

For single-employer pension plans terminating January through March 2014, and for multiemployer plans involved in a mass withdrawal, the interest rate established by the PBGC for calculating immediate annuities is 3.35 percent up from the 3.0 percent rate that applied in October through December 2013…

(Read Intelliconnect) »

Plan Sponsors Need To Understand Differences Between Public And Private Exchanges

Over the last several years, the phrase “health care exchange” has become a prevalent part of the health care delivery system. The Patient Protection and Affordable Care Act (ACA) created public health insurance exchanges (or marketplaces), and many private companies are now offering employers of all sizes access to private exchanges. Both private and public exchanges offer a wide range of coverage options and serve as a portal to help individuals enroll in health care coverage. According to a recent health reform briefing paper from consultant Milliman, plan sponsors need to be aware of the purpose and mechanics of the different exchanges in order to evaluate whether they provide opportunities for better or more efficient health care delivery to their participants…

(Read Intelliconnect) »