Benefits Update – December 2014

From the editors of Wolters Kluwer’s benefits products, here are hot topics from recent Employee Benefits Management Directions newsletters as well as recent explanatory updates in Employee Benefits Management. Also included are recent explanatory updates to the Benefits Answers Now product and Spencer’s Research Reports.

If you have any comments/suggestions concerning the information provided or the format used, we’d like to hear from you. Please contact me at Tulay.Turan@wolterskluwer.com.

 

Hot Topics in Employee Benefits Management:

Artist asks full D.C. Court to review origination clause challenge, Employee Benefits Management Directions, Issue No. 575, November 4, 2014 —The Pacific Legal Foundation (PLF), on behalf of Matt Sissel, has asked the full U.S. Court of Appeals for the District of Columbia Circuit to hear PLF’s Origination Clause challenge to the Patient Protection and Affordable Care Act (ACA).

Quarter of employers still have not determined impact of excise tax on health plans, Employee Benefits Management Directions, Issue No. 575, November 4, 2014 — A quarter of employers said that they still have not determined the impact of the Patient Protection and Affordable Care Act’s (ACA) excise tax on high cost health plans, according to recent research from Aon Hewitt. In addition, more than one-third of employers reported that their executive leadership and finance teams have limited or no knowledge of the implications of the tax for their organizations.

Skinny plans that pass value test might need to fatten up in future, Employee Benefits Management Directions, Issue No. 576, November 18, 2014 — Over the past several months, employee benefits brokers have been offering employers “skinny plans” as a way to minimize exposure to assessable payments under the employer shared responsibility provisions of the Patient Protection and Affordable Care Act (ACA), by offering full-time employees low-cost coverage. For example, a skinny plan might cover first-dollar preventive care and provide a wellness benefit, but would not cover inpatient hospital treatment or physician services. Some

experts praise skinny plans as the remedy to the employer and individual shared responsibility provisions of the ACA, especially for low-paid workers, while others revile skinny plans as merely “mini-med” plans reimagined, which will cost both employers and employees more money in the long run. Wolters Kluwer recently spoke with Jim Borah, senior benefits consultant with benefits advisory firm Cornerstone Group, about skinny plans.

Supreme Court agrees to hear challenge to health insurance subsidies, Employee Benefits Management Directions, Issue No. 576, November 18, 2014 — The U.S. Supreme Court has issued an order granting review of whether tax credits used to offset the cost of insurance policies purchased on Exchanges under the Patient Protection and Affordable Care Act (ACA) apply only in the consumer marketplaces set up by 16 states, and not at federally-run sites in 34 states.

 

What’s New in Employee Benefits Management:

2015 COLAs — The IRS has announced the 2015 cost-of-living adjustments (COLAs) to dollar limitations on benefits and contributions, annual compensation limits, the threshold amount for determining excess distributions, compensation amounts for SEPs, and other dollar limitations applicable to retirement plans. The COLAs have been reflected throughout the explanations, including at ¶2070, ¶2086, ¶5020, ¶5030, ¶75,490, ¶76,980, and ¶77,115.

2015 PBGC premiums — The 2015 PBGC monthly premiums have been updated at ¶82,025, ¶132,750 and ¶132,760.

2015 FSA contributions limit — The IRS has issued the dollar limitation under Code Sec. 125(i) on voluntary employee salary reductions for contributions to health flexible spending arrangements. For the amount, see ¶38,090.

Cost sharing —The Departments of Labor, Health and Human Services and the Treasury have issued guidance setting forth factors that they will consider when determining if a non-grandfathered group health plan has met its obligations under PHSA Sec. 2707(b) regarding maximum out-of-pocket costs. For more information, see ¶10,140.

Voting leave — The chart at ¶70,070 regarding time off to vote has been updated.

 

What’s New in Benefits Answers Now (BAN):

IRS announces pension plan limitations for 2015. The IRS has announced the 2015 cost-of-living adjustments (COLAs) to dollar limitations on benefits and contributions, annual compensation limits, the threshold amount for determining excess distributions, compensation amounts for SEPs, and other dollar limitations applicable to retirement plans. More information about the pension plan limits for 2015 can be found at ¶10,080, ¶10,660, ¶10,700, ¶10,760, ¶10,800, ¶11,190, ¶11,220, ¶11,230, ¶11,350, ¶11,930, ¶12,120, ¶12,240, ¶14,860, ¶14,990, and ¶15,100.

IRS issues 2015 adjusted limits for various health and welfare benefits. The IRS has issued a number of cost-of-living adjustments (COLAs) to various types of benefits, including cafeteria plans, transportation fringe benefits, long-term care insurance contracts, adoption assistance, and medical savings accounts (MSAs). To find out more about the adjusted limits for 2015, see ¶20,350, ¶70,050, ¶72,990, ¶73,040, ¶74,330, ¶81,290, ¶81,300, and ¶81,310.

PBGC increases maximum monthly guarantee for 2015. The Pension Benefit Guaranty Corporation (PBGC) has announced that the maximum insurance benefit for participants in underfunded pension plans terminating in 2015 is $5,011.36 per month or $60,136.32 per year for those who retire at age 65. Find out more about the PBGC’s role in plan terminations at ¶14,400.

Employer plans that do not provide inpatient hospital coverage do not provide minimum value. Employer plans that do not provide coverage for inpatient hospitalization services or physician services (or for both) do not provide minimum value under the rules of the Patient Protection and Affordable Care Act (ACA), according to the IRS. The IRS notes that the Department of Health and Human Services (HHS) will shortly propose regulations on this issue and finalize them in 2015, making them applicable upon finalization. For any employers that have already entered into a binding written commitment to adopt, or have begun enrolling employees in, a plan that does not provide inpatient hospital coverage or physician services, prior to November 4, 2014, the IRS and HHS anticipate that final regulations, when issued, will not be applicable under the ACA rules with respect to the plan before the end of the plan year, if the plan year begins no later than March 1, 2015. See the discussion at ¶20,030 for more information about minimum value in employer-sponsored health plans.

 

What’s New in Spencer’s Benefits Reports:

Electronic SPD Distribution. Certain employee benefit plan information can be disclosed through electronic media. This report analyzes the applicable regulations and includes a step-by-step summary of the steps required to comply with these rules (Report 602.11.-37).

Important Facts And Figures. This report has been updated to reflect the 2015 amounts allowed for 401(k) plans, highly compensated employees and PBGC premiums (Report 100.-1).

Medicare. This report describes the basic provisions of the four Medicare sections, updated with the 2015 income-based monthly premiums for Part B (Report 324.4.-1).

IRAs. This report describes the features, limitations, and tax treatment of each of the five types of IRAS, including the updated cost-of-living adjustments for 2015 (Report 105.1.-1).

HIPAA Q&As. Since HIPAA was enacted in 1997, a variety of questions have arisen regarding HIPAA compliance. This report provides answers to some of those common questions (Report 501.-41).