Benefits Update – March 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:

ERISA fiduciary cannot enforce equitable lien for spent settlement proceeds against participant’s general assets, Employee Benefits Management Directions, Issue No. 605, February 2, 2016 — Once an ERISA-plan participant wholly dissipates a third-party settlement on nontraceable items, the plan fiduciary cannot bring a Code 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.

Webinar reveals mixed news for ACA forms and what to do about it, Employee Benefits Management Directions, Issue No. 605, February 2, 2016 — 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.

IRS issues guidance on expatriate health plans for 2016 fee year, Employee Benefits Management Directions, Issue No. 606, February 16, 2016 — The IRS has provided guidance that excludes expatriate health plans from the annual fee imposed on insurers of U.S. health risks for the 2016 fee year. The fee is imposed by section 9010 of the Patient Protection and Affordable Care Act.

Student health plans that might violate ACA given time to comply, Employee Benefits Management Directions, Issue No. 606, February 16, 2016 — The Departments of the Treasury, Labor, and Health and Human Services have issued guidance on the application of certain provisions of the Patient Protection and Affordable Care Act to premium reduction arrangements offered in connection with student health plans. The guidance also provides a transition period for these arrangements.


What’s New in Employee Benefits Management:

Subrogation — The Supreme Court’s decision in Montanile v. Board of Trustees of the National Elevator Industry Health Benefit Plan (see story above) is discussed at ¶10,055.

ACA market reforms — IRS Notice 2015-87 clarifies certain aspects of the employer shared-responsibility provisions under Code Sec. 4980H. The notice is discussed at ¶10,500.

User fees — The IRS has issued the 2016 schedule of employee plan user fees. See ¶6020 for the new fee schedule.

IRAs — The Consolidated Appropriations Act, 2016, permanently extends the provision for individuals age 70½ and older to be allowed to make tax-free distributions from individual retirement accounts (IRAs) to a qualified charitable organization. The treatment continues to be capped at a maximum of $100,000 per taxpayer each year. For more information, see ¶152,453.


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

Fact sheet lays out joint employer responsibilities under FMLA. The Department of Labor has issued sub-regulatory guidance on the joint employment relationship and the corresponding responsibilities of primary and secondary employers under the Family and Medical Leave Act (FMLA). The guidance includes both an example and a chart to illustrate the specific responsibilities of primary and secondary employers under the FMLA. To find out more about the fact sheet, see ¶31,300.

VOI is a marker of wellness program success. According to a new report by the International Foundation of Employee Benefit Plans (IFEBP), when it comes to measuring wellness program success, employers are not necessarily just focusing on the financial bottom line. Twenty-eight percent of the employers included in the IFEBP report use traditional return on investment (ROI) numbers, which typically measure the financial success of an employer’s wellness program by comparing the money spent on it to money saved, when determining the worth of their wellness programs. Find out more about saving money with wellness plans at ¶81,570.

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) 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. More information about the questions employees might ask can be found at ¶40,405.

IRS provides 2016 maximum values for employer-provided vehicles. The IRS has provided the maximum value of employer-provided vehicles first made available to employees for personal use in calendar year 2016. An overview of the maximum values can be found at ¶70,590.


What’s New in Spencer’s Benefits Reports:

Bona fide wellness. This report summarizes the final regulations regarding bona fide wellness programs, as well as changes made by the ACA (Report 326.-3).

Form 5500. Most employee benefit plans are required to file an annual report with the federal government. Over the past 35 years, Form 5500 has gone through several overhauls. This report describes the type of information required on the Form 5500 (Report 603.1.-3).

Temporary disability. Temporary disability benefits are regulated only in five states (California, Hawaii, New Jersey, New York and Rhode Island) and in Puerto Rico. This report describes these plans, with updated information for 2016 (Report 323.-5).

Cadillac tax strategies. In 2020, the ACA will impose an excise tax on high-cost health plans. This report includes strategies that employers can use over the next few years to avoid being subject to the ACA’s excise tax (Report 563.-5).

Same-sex marriage. This report discusses the court’s rulings in United States v. Windsor. Hollingsworth v. Perry, and Obergefell v. Hodges; and also IRS guidance issued since those rulings (Report 327.4.-15).