Spencer’s Benefits Reports NetNews – February 12, 2016

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February 12, 2016


Participants are contributing more to, taking out less from workplace retirement plans

Defined contribution (DC) plans have recovered and adapted, after the market decline in 2008, during which many DC plan participants saw their retirement savings accounts drop significantly, according to PSCA’s 58th Annual Survey, which reflects the 2014 plan-year experience of 592 DC plan sponsors. Critics of DC plans used the 2008 decline to attack the private, employer-sponsored system….

(Read Intelliconnect) »

IRS provides guidance on mid-year changes to safe harbor plans and notices

The IRS has issued guidance that provides that a mid-year change either to a safe harbor plan or to a plan’s safe harbor notice does not violate the safe harbor rules merely because it is a mid-year change, provided that applicable notice and election opportunity conditions are satisfied and the mid-year change is not a prohibited mid-year change. The guidance is effective for mid-year changes made on and after January 29, 2016. Comments are requested that may be submitted in writing no later than April 28, 2016….

(Read Intelliconnect) »

Obama outlines path to greater retirement savings and portability

President Obama has sketched a plan to improve the retirement landscape for American workers, who no longer “spend their entire career with one company that will provide them a pension in retirement,” as he noted. The plan detailed by the President in a fact sheet will be further fleshed out in his fiscal year 2017 budget proposal….

(Read Intelliconnect) »

February 11, 2016


Plan sponsors should start now if planning on implementing private exchange in 2017

According to Arthur Hall, senior vice president and national practice leader, employee benefits at USI, plan sponsors should start planning now if they are thinking of implementing a private exchange for the 2017 plan year. There are many facets to manage when implementing private exchange coverage, such as “an administrative component, and carrier management and employee management components,” he noted at a recent webinar sponsored by ADP, Inc….

(Read Intelliconnect) »

IRS proposed regs provide nondiscrimination testing changes including relief for closed DB plans

The IRS has issued proposed regulations modifying a number of provisions in the existing nondiscrimination regulations to address situations and plan designs, including nondiscrimination relief for certain closed defined benefit (DB) plans and formulas….

(Read Intelliconnect) »

Voters more concerned about terrorism, personal health costs than ACA

This election cycle, voters are more concerned about their own health care and insurance costs, rather than the reforms brought under the Patient Protection and Affordable Care Act (ACA). The Kaiser Family Foundation (KFF) found, through polling, that the ACA ranks eighth on a list of issues, and 23 percent of respondents said that the legislation is extremely important to their vote. Terrorism ranked first on the list at 38 percent, with the economy coming in second….

(Read Intelliconnect) »

February 10, 2016


IRS provides 2016 maximum vehicle values for cents-per-mile and fleet-average valuation rules

The IRS has released the maximum allowable value of certain employer-provided automobiles, including trucks and vans that are first made available to employees for personal use during calendar year 2016. The maximum value of vehicles for which the cents-per-mile valuation rule of Reg. §1.61-21(e) may apply is $15,900 for a passenger automobile and $17,700 for a truck or van. The maximum value for vehicles for which the fleet-average valuation rule of Reg. §1.61- 21(d) may apply is $21,200 for a passenger automobile and $23,100 for a truck or van….

(Read Intelliconnect) »


Accountable care proposal would rework benchmarks, make regional adjustments

A proposed rule released by CMS would change the way the agency calculates benchmarks for accountable care organizations (ACOs) that continue to participate in the Medicare Shared Savings Program (MSSP) after an initial three-year agreement period, in part by basing benchmarks on regional, as opposed to national, trends. It would also make changes to the program to encourage MSSP participants to accept more risk and establish polices allowing the agency to reopen payment determinations to make corrections regarding shared savings and losses. Comments on the rule are due no later than March 28, 2016….

(Read Intelliconnect) »

Fiduciaries allowed to rely on market price and detailed review process to maintain investment in company stock

ESOP fiduciaries may rely on market price, absent special circumstances, in determining the prudence of maintaining an investment in company stock, according to the Sixth Circuit U.S. Court of Appeals. Evidence of a prudent process for monitoring and evaluating the investment, the court advised would effectively foreclose the special circumstances needed for a claim of imprudence to survive a motion to dismiss….

(Read Intelliconnect) »

February 9, 2016


Student health plans that might violate ACA given time to comply

The Departments of the Treasury, Labor, and Health and Human Services (Departments) have issued guidance on the application of certain provisions of the Patient Protection and Affordable Care Act (ACA) to premium reduction arrangements offered in connection with student health plans. The guidance also provides a transition period for these arrangements….

(Read Intelliconnect) »

EBSA obtains $1.1M consent judgment to restore fund losses to ESOP

Under a consent judgment obtained by the DOL, Gruber Systems and its CEO have been ordered to return $1.1 million to the company’s employee stock ownership plan to cover losses sustained by plan participants when the defendants allegedly caused the ESOP to purchase company stock for significantly more than fair market value. The judgment also requires the Valencia, California-based employer and its CEO to pay $220,000 in civil money penalties and orders the newly appointed plan trustees to distribute the plan’s assets to the participants and beneficiaries, and terminate the plan….

(Read Intelliconnect) »


February 8, 2016


Why averaging full-time and full-time equivalent employees matters to the IRS

For purposes of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), employers average their number of employees across the months in the year to see whether they will be an applicable large employer (ALE). According to a recently-issued tax tip from the iRS, this is important to do because two provisions of the health care law apply only to ALEs and are now in effect. These are the employer shared responsibility provision and the employer information reporting provision for offers of minimum essential coverage. In addition, self-insured ALEs – that is, employers who sponsor self-insured group health plans – have additional provider information reporting requirements….

(Read Intelliconnect) »

1095 confusion: Prepare answers to employee questions ahead of time

Even though the IRS has provided transitional relief from the Patient Protection and Affordable Care Act’s (ACA) (P.L. 111-148) information reporting requirements, many employers have completed their 1095 forms and have them ready to go out to employees. The International Foundation of Employee Benefit Plans (IFEBP) cautions that when employees receive these forms, there will be plenty of questions. Employers should prepare answers to some basic employee questions before the 1095 forms are sent to employees….

(Read Intelliconnect) »