Spencer’s Benefits Reports NetNews – January 22, 2016

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January 22, 2016


ERISA fiduciary cannot enforce equitable lien for spent settlement proceeds against participant’s general assets

Once an ERISA-plan participant wholly dissipates a third-party settlement on nontraceable items, the plan fiduciary cannot bring an ERISA Sec. 502(a)(3) suit against the participant’s general assets because the suit is, at that point, one for legal, not equitable relief, held the U.S. Supreme Court in a decision authored by Justice Thomas. The High Court reversed an unpublished Eleventh Circuit decision reasoning that a plan can always enforce an equitable lien once the lien attaches, and that dissipation of the specific fund to which the lien attached cannot destroy the underlying reimbursement obligation. The Court had granted certiorari in order to resolve conflict among the various circuits, which have been split with regard to whether an ERISA fiduciary can enforce an equitable lien against a participant’s general assets under the above circumstances….

(Read Intelliconnect) »

IRS issues notice of planned update to guidance on employee plans determination letter program

The IRS intends to update Rev. Proc. 2007-44 in anticipation of the elimination, effective January 1, 2017, of the five-year remedial amendment cycle system for individually designed plans under the Employee Plans (EP) determination letter program. The future guidance will provide that controlled groups and affiliated service groups that have previously made a Cycle A election are permitted to submit determination letter applications during the Cycle A submission period, which begins February 1, 2016, and ends January 31, 2017. The guidance also will provide that expiration dates on determination letters issued prior to January 4, 2016, are no longer operative. Finally, the period on or after January 1, 2016, during which certain employers may establish or adopt a defined contribution pre-approved plan and, if permissible, apply for a determination letter, will be extended from April 30, 2016 to April 30, 2017. Employers may rely on this notice until Rev. Proc. 2007-44 has been updated to reflect the changes described in the notice….

(Read Intelliconnect) »

January 21, 2016


Dependent coverage mandate reduces workers’ wages

The dependent coverage mandate in the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) is one of the most popular provisions of the law. However, recent research from the National Bureau of Economic Research (NBER) has found that workers at firms with employer-sponsored coverage—whether or not they have dependent children—experience an annual reduction in wages of approximately $1,200….

(Read Intelliconnect) »

IRS updates determination letter procedures, user fee program, among others

At the beginning of 2016, the IRS has been busy issuing several updates, such as to its user fee program for employee plan rulings, its determination letter procedures, among others….

(Read Intelliconnect) »

January 20, 2016


Health care surcharge for smokers leads to decreased smoking in the workplace, SHRM survey finds

Forty-five percent of employers who have health care surcharges in place for smokers say employee smoking in the workplace decreased since the policy was implemented, according to a Society for Human Resource Management (SHRM) survey. Approximately one-fifth of survey respondents (18 percent) impose smoking surcharges, which result in higher health care premiums for smokers. In addition, about one-half of respondents (54 percent) are providing smokers with wellness information on the benefits of a smoke-free lifestyle….

(Read Intelliconnect) »


Health insurance subsidies may come with unexpected costs for 1.4M taxpayers

Tax issues may be the cost of assistance with the price of health insurance for many Americans who took advantage of the health insurance subsidies made available by the Patient Protection and Affordable Care Act (ACA). IRS Commissioner John Koskinen highlighted the difficulties of the health law in a letter to Congress, as he reported on the outcome of the 2015 tax filing season, the first one in which taxpayers saw changes to their income tax returns related to the individual shared responsibility provision and the premium tax credit provision of the ACA….

(Read Intelliconnect) »

January 19, 2016


Employer-sponsored health insurance plan deductibles rising faster than premiums

The amount of premiums paid by individuals for employer-sponsored health insurance plans rose by 203 percent between 1999 and 2015, which outpaced inflation and workers’ earnings during that same time. However, premium growth for family coverage appeared to slow in recent years while deductibles continued to rise rapidly, as reflected in an infographic produced by a partnership between the Journal of the American Medical Association (JAMA) and the Kaiser Family Foundation that charted recent trends in employer-sponsored health insurance premiums….

(Read Intelliconnect) »

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) »


Whether injured engineer was ‘disabled’ and ‘qualified’ were triable issues under ADA’s amendments

Reversing summary judgment against a mechanical engineer’s ADA claims arising from the revocation of a job offer, the Fifth Circuit U.S. Court of Appeals found that the lower court erred by ignoring the expanded definitions and relaxed standards of the 2008 amendments to the Act. In the appellate court’s view, there was evidence that the plaintiff was substantially limited in performing major life activities due to a shoulder injury, that the employer regarded him as disabled, and that despite his limitations he could perform the essential functions of the position for which he applied….

(Read Intelliconnect) »


January 18, 2016


Webinar reveals mixed news for ACA forms and what to do about it

The good news for employers looking ahead to upcoming filing requirements is that deadlines for Forms 1094-B, 1094-C, 1095-B, and 1095-C have been extended. The less favorable news is that penalties for improperly completed and late forms have risen significantly. In a recent webinar, ADP, LLC explained what these recent changes mean for employers….

(Read Intelliconnect) »

PBGC issues February 2016 interest rates for valuing terminating pension plans

For single-employer pension plans terminating January through March 2016, and for multiemployer plans involved in a mass withdrawal, the interest rate established by the PBGC for calculating immediate annuities is 2.82 percent, up from the 2.46 percent rate that applied in October through December 2015. The interest rate for calculating immediate lump sums in February 2016 is 1.25 percent, the same rate that applied in January 2016….

(Read Intelliconnect) »


PBGC issues final regs providing application process, notice requirements for partitions of multiemployer DB plans

The Pension Benefit Guaranty Corporation (PBGC) has finalized previously issued interim final regulations that provide the application process and notice requirements for partitions of eligible multiemployer defined benefit (DB) plans under ERISA Title IV, as amended by the Multiemployer Pension Reform Act of 2014 (MPRA), Division O of the Consolidated and Further Continuing Appropriations Act (P.L. 113-235). The PBGC has made minor changes to the interim final regulations based on public comments received. The final regulations are effective January 22, 2016 and applicable to applications for partition submitted to the PBGC on or after January 22, 2016….

(Read Intelliconnect) »