Benefits Update – November 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:

Educate employees, reinforce value of benefits offerings during open enrollment expert advises, Employee Benefits Management Directions, Issue No. 573, October 7, 2014 — The smell of pumpkin spice everything is in the air. And employers and employees alike know what that means — open enrollment is just around the corner. Planning for this year’s open enrollment season will bring new challenges for employers, especially those who are subject to the Patient Protection and Affordable Care Act’s (ACA) employer mandate. To learn more about this year’s open enrollment season, Wolters Kluwer reached out to Jennifer Benz, founder and CEO of Benz Communications.

Cafeteria plans may allow revocations of health plan elections to purchase Exchange coverage, Employee Benefits Management Directions, Issue No. 573, October 7, 2014 — Effective September 18, 2014, the IRS is allowing employers to expand the application of the permitted change rules for health coverage to accommodate certain situations arising from the Patient Protection and Affordable Care Act.

Solicitor General to SCOTUS: ACA subsidy review ‘unwarranted,’ there is no conflict, Employee Benefits Management Directions, Issue No. 574, October 21, 2014 —  Following the U.S. Court of Appeals for the Fourth Circuit’s decision in King v. Burwell, Virginia residents who do not want to purchase comprehensive health insurance filed a petition for writ of certiorari with the United States Supreme Court.

IRS, HHS, and Labor Department clarify “reasonable method” for reference-based pricing, Employee Benefits Management Directions, Issue No. 574, October 21, 2014 — 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). This latest in a series of frequently-asked questions (FAQs) addresses obligations with regard to reference-based pricing.

What’s New in Employee Benefits Management:

Revocation of elections — The IRS guidance on the new situations where cafeteria plans may allow revocations of elections (see story above), is discussed at ¶38,035.

Look-back method — The IRS has proposed an approach for applying the look-back method to determine full-time employees for the ACA mandate. The guidance, in Notice 2014-49, is discussed at ¶10,097.

PCORI fee — In Notice 2014-56, the IRS has provided the adjusted applicable dollar amount to be multiplied by the average number of covered lives for purposes of the fee imposed by Code Secs. 4375 and 4376 on the issuer of a specified health insurance policy for policy years and plan years that end on or after Oct. 1, 2014, and before Oct. 1, 2015. The fee helps to fund the Patient-Centered Outcomes Research Institute (PCORI). For the fee amount, see ¶10,505.

Deduction limitation for health insurance providers — The IRS has released final regulations on the application of the $500,000 deduction limitation for remuneration provided by certain health insurance providers under Code Sec. 162(m)(6), which was added by the Patient Protection and Affordable Care Act (ACA). For details, see ¶100,050.

2015 Medicare amounts — Secretary of Health and Human Services Sylvia Burwell has announced that next year’s standard Medicare Part B monthly premium and deductible will remain the same as the last two years. For the amounts, see ¶53,140.

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

Cafeteria plans may allow revocations of health plan elections to purchase Exchange coverage. Effective September 18, 2014, the IRS is allowing employers to expand the application of the permitted change rules for health coverage to accommodate certain situations arising from the Patient Protection and Affordable Care Act. The guidance will remain in effect until the IRS changes its cafeteria plan regulations to conform to the new guidance. A cafeteria plan may allow an employee to prospectively revoke an election of coverage under a group health plan that is not a health FSA and that provides minimum essential coverage provided certain conditions are met. More information about midyear election changes can be found at ¶70,420.

Departments finalize excepted benefits rules for dental and vision benefits, EAPs. The Departments of Labor, Health and Human Services (HHS) and the Treasury (Departments) have jointly issued final regulations that address the treatment of dental and vision benefits and employee assistance programs (EAP) as limited excepted benefits, which are generally exempt from the Patient Protection and Affordable Care Act’s market reform requirements. The rules apply to group health plans and group health insurance issuers for plan years starting in 2015. An overview of the final regulations can be found at ¶20,061.

Guidance issued on the effect of HATFA on PBGC premiums. The PBGC has issued a technical update providing guidance on the effect of the Highway and Transportation Funding Act of 2014 (HATFA) on PBGC premiums. The PBGC noted that its guidance supersedes any inconsistent guidance in the PBGC’s 2014 premium instructions but does not affect guidance in PBGC Technical Update 12-1, dealing with the effect of the Moving Ahead for Progress in the 21st Century Act (MAP-21), which continues to apply for plan years to which HATFA applies. See the discussion at ¶12,420 for more information about the impact of HAFTA on PBGC premiums.

IRS issues final regs that require filing certain retirement plan returns on magnetic media. The IRS has issued final regulations that require the filing of certain retirement plan statements, returns, and reports under Code Secs. 6057, 6058, and 6059 (i.e., Form 8955-SSA, Form 5500 series, and Schedules SB and MB) on magnetic media. The term “magnetic media” includes electronic filing, as well as other magnetic media specifically permitted under applicable regulations, revenue procedures, publications, forms, instructions, or other guidance on the IRS website. The final regulations are effective September 29, 2014. To find out more about the regulations, see ¶10,170.

IRS issues 2015 per diem rates for travel expense reimbursements. The IRS has provided the 2014-2015 special per diem rates for taxpayers to use to substantiate ordinary and necessary business expenses incurred while traveling away from home. The guidance provides the special transportation industry meal and incidental expenses rates (M&IE), the rate for the incidental expenses only deduction, and the rates and list of high-cost localities for purposes of the high-low substantiation method. Find out more about the per diem rates at ¶81,400.

What’s New in Spencer’s Benefits Reports:

Midyear election changes. Plan participants are only allowed to make midyear election changes in certain circumstances. Recently, the IRS expanded the application of the permitted change rules for health coverage to accommodate certain situations arising from the ACA. This report analyzes the new guidance (Report 351.-15).

 

Nursing mother provision. The ACA requires that employers provide a reasonable break time and a private place for an employee to express breast milk for her nursing child for one year after the child’s birth. This report provides answers for employers about the nursing mother provision (Report 402.1.-21).

 

Employer mandate. The ACA will begin assessing payments on certain large employers beginning in 2015. This report reviews the rules regarding the employer mandate (Report 550.-1).

 

Exchange plans. Under the ACA, states were required to establish state-based health benefit Exchanges. This report describes the basic Exchange provisions (Report 540.-1).

 

Nondiscrimination under HIPAA. This report analyzes regulations regarding how employer group health plans can comply with the nondiscrimination provisions in HIPAA (Report 501.-31).