Benefits Update – June 2016

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.

Hot Topics in Employee Benefits Management:

The ins and outs of the look-back measurement method, Employee Benefits Management Directions, Issue No. 611, May 3, 2016 — Among employers, large and small, it is now common knowledge that the Patient Protection and Affordable Care Act (ACA) imposes tax penalties on applicable large employers (ALEs) both that do and do not offer health care coverage to full-time employees (FTEs) and their dependents. As specified in IRS Notice 2012-58, there are only two methods for determining an employee’s status as full-time: the monthly measurement method and the look-back measurement method. The notice provides complicated details about how an employer should implement the look-back measurement method. Recently, Wolters Kluwer spoke with Ryan Moulder, Partner at Health Care Attorneys, to discuss the ins and outs of the look-back-measurement method.

 Guidance in new FAQs addresses coverage for preventive and mental health services, Employee Benefits Management Directions, Issue No. 611, May 3, 2016 — The Labor Department, the IRS, and the HHS have issued Frequently Asked Questions (FAQs) on health market reform topics that include coverage of preventive services, mental health parity implementation, and implementation of the Women’s Health and Cancer Rights Act.

Benefits consulting group advises what to do if you receive a marketplace notice, Employee Benefits Management Directions, Issue No. 612, May 17, 2016 — Starting soon, some applicable large employers (ALEs) will receive unwelcome news from the IRS, in the form of a marketplace notice, telling them that they are being assessed a nondeductible penalty because at least one of their full-time employees received subsidized coverage from the health care exchange. An update from the benefits consulting firm of Cherry Bekaert advises how to deal with these notices, and why the notices may come as a surprise for some employers.

What steps are employers taking as they aim for small health care cost increases?, Employee Benefits Management Directions, Issue No. 612, May 17, 2016 — Nearly four in five employers (78%) project moderate to significant changes in their health plan designs and vendor strategies over the next four years, according to a survey of employers by Willis Towers Watson. These changes are intended to manage health care costs and improve plan value.

                                                                           

What’s New in Employee Benefits Management:

ACA FAQs — The guidance in the most recent ACA-related FAQs (see story above) is discussed at ¶10,100 (rescissions), ¶10,140 (preventive services) and ¶10,345 (clinical trials).

Mental health parity — The recent FAQs also addressed mental health parity implementation. See ¶10,065 for more information.

2017 HSA amounts — The IRS has issued inflation adjusted amounts under Code Sec. 223 for health savings accounts (HSAs) for 2017. For the amounts, see ¶39,067 and ¶152,365.

FMLA poster — The Department of Labor has announced there is a new version of the FMLA poster. The new poster offers little in the way of substantive changes—thus, employers can still use the current poster if they so choose—but the revised version has been reorganized for clarity. The new version is at ¶225,995.

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

IRS issues 2017 inflation-adjusted amounts for HSAs. The IRS has issued inflation adjusted amounts for health savings accounts (HSAs) for 2017. For calendar year 2017, the annual limitation on deductions for an individual with self-only coverage under a high deductible health plan is $3,400. For calendar year 2017, the limitation on deductions for an individual with family coverage under a high deductible health plan is $6,750. More information about the inflation-adjusted amounts can be found at ¶23,700, ¶23,715, and ¶23,740.

Guidance in new FAQs addresses coverage for preventive and mental health services

The Labor Department, the IRS, and the HHS have issued Frequently Asked Questions (FAQs) on health market reform topics that include coverage of preventive services and mental health parity implementation. An overview of the FAQs can be found at ¶20,051 and ¶21,860.

IRS issues final regs and revised procedures for multiemployer plans in critical and declining status seeking benefit reductions. The IRS has issued final regulations and revised procedures regarding applications for a suspension of benefits for participants and beneficiaries of a multiemployer defined benefit pension plan in critical and declining status. The final regulations were effective April 28, 2016. To find out more about the new rules, see ¶14,610.

Benefits consulting group advises what to do if you receive a marketplace notice. Starting soon, some applicable large employers (ALEs) will receive unwelcome news from the IRS, in the form of a marketplace notice, telling them that they are being assessed a nondeductible penalty because at least one of their full-time employees received subsidized coverage from the health care exchange. An update from the benefits consulting firm of Cherry Bekaert advises how to deal with these notices, and why the notices may come as a surprise for some employers. Find out more about how to deal with a marketplace notice at ¶50,380.

 

What’s New in Spencer’s Benefits Reports:

Flex contributions. This report discusses IRS guidance that clarifies how employer flex contributions to a cafeteria plan are taking into account for purposes of determining whether a large employer has made an offer of coverage (Report 550.1.-13).

ERISA reporting. This report is a quick reference guide for basic ERISA reporting and disclosure requirements (Report 601.-1).

CDHPs. This report describes the different types of consumer-driven health plans (Report 356.-1).

SBCs. Group health plans must provide participants with a summary of benefits and coverage (SBC). This report outlines the final rules on SBCs (Report 522.1.-1).

Market reforms. The ACA prohibits preexisting condition exclusions, lifetime or annual coverage limits, and rescissions. This report reviews significant elements of the final regulations (Report 513.1.-1).