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Cadillac Tax Still on the Assembly Line

August 18, 2015

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Assembly LineRecently, the IRS issued Notice 2015-52 requesting additional input on the yet-to-be-proposed Cadillac Tax rules.  For those unaware, the Cadillac Tax imposes a 40%, non-deductible excise tax on the cost of health coverage that is over a certain threshold.  This deceptively simple description does not begin to uncover the myriad of potential issues, such as…

Who pays the tax?

Well, the “coverage provider” pays the tax.  For insured plans, that’s easy: it’s the insurer.  For HSAs or Archer MSAs, it’s the employer.  But what about a self-funded plan?  The statute says it’s the “person that administers the plan benefits.”  That phrase is undefined in the statute or really anywhere else.

The IRS is looking at two possible approaches for defining this term.  One is to look at a self-funded plan’s third party administrator/ASO provider.  That sounds easy, until you remember that many plans have carved out pharmacy benefit management with a separate provider or have otherwise divided up the administration.  Regardless, this tax is still getting passed back through to employers anyway.

The second approach is looking at the person with ultimate authority for the plan administration (the relatively pithy ERISA name for this person is the “plan administrator”).  Of course, sometimes the plan administrator is a committee of people and not really an individual or entity.  (I guess they could divide the tax among them?)  The IRS also says that it

New Law Uses Benefits to Pay for Buses and Veterans Health Care

When you were last pondering what creative name Congress will use on its next benefits-related bill (and, really, who does not do that in moments of abject despair, after a few glasses of wine, while bowling from time to time), surely the “Surface Transportation and Veterans Health Care Choice Improvement Act of 2015” was near the top of your mind, wasn’t it?  No?  Really?

Well, SURPRISE! Because that’s the name of your latest benefits bill.  In truth, it does have some provisions about transportation and the VA, but there are also benefits changes buried in various corners of the new law:

  1. Beginning next year, the automatic extension for the Form 5500 has been, well, extended from 2 ½ months to 3 ½ months from the initial deadline.   This will allow plan administrators of calendar year plans more time to prepare for Halloween, but may cut in on their Thanksgiving preparations.
  2. The law extended for four years (until the end of 2025) the ability to transfer excess pension assets to retiree health and life insurance accounts. Of the four provisions, this is the only one likely to result in an increase in federal revenues. The Joint Committee on Taxation estimates that it will raise $172 million in revenue over 10 years.
  3. It also amends the ACAplay or pay” mandate to exclude employees receiving coverage under TRICARE or through the VA from the employee count when determining if an employer is an “applicable large

New Final Regulations on Contraceptive Mandate Accommodation

August 3, 2015

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New Final Regulations on Contraceptive Mandate Accommodation

August 3, 2015

Authored by: benefitsbclp

ACA Blue HighlightThe Departments of Health and Human Services, Labor and Treasury (the “Agencies”) recently issued the latest set of final regulations that purport to provide an accommodation for certain entities with religious objections to the ACA’s requirement that non-grandfathered group health plans provide contraceptive services.  The regulations, which were published in the Federal Register on July 14, 2015, finalize the interim final regulations published on August 27, 2014.   The regulations provide an alternative procedure for a so-called “eligible organization” to give notice of its objection to some or all contraceptive coverage and add a definition of “closely-held for profit entity” to the definition of eligible organization.

Alternative Notice Procedure.

In the wake of the U.S. Supreme Court’s order in Wheaton College v. Burwell, that indicated that written notice of  religious objection to certain contraceptive services would be sufficient for an organization to avail itself of the accommodation, the Agencies issued interim final regulations that added the written notice procedure an alternative to using EBSA Form 700.  The final regulations adopt the alternative process without change.  Instead of using Form 700, an eligible organization can give notice of its objection to some or all mandated contraceptive services by sending a letter to HHS.  The letter must include the following information:

  • Name of the eligible organization and the basis on which it qualifies for an accommodation,
  • Its objection
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