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The FAST Act – If You Blinked You May Have Missed It.

The FAST Act – If You Blinked You May Have Missed It.

January 7, 2016

Authored by: Denise Erwin

MovingDeadlinesOn December 3, 2015, the President signed into law the Fixing America’s Surface Transportation Act (the “FAST Act”) which provides for five years of funding for highway projects.  If you just skimmed the news on this one, you may not have noticed that the FAST Act included a repeal of the extension to the Form 5500 filing deadline that was provided under the stop-gap Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 that was passed in August.

As we reported in our previous blog post, the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 provided that, beginning in 2016, the automatic extension for the Form 5500 would be extended from 2½ months to 3½ months from the initial deadline.  Calendar year plans would be allowed to file as late as November 15th.

In response to a luke-warm reception to the extended deadline (which was apparently viewed by many as serving only to prolong misery), the FAST Act provides that the old October 15th automatic extension deadline has been restored.

Don’t get tripped up by this legislative game of “now-you-see-it-now-you-don’t.”  As we embark on the new year, mark your calendars for October 15th as the automatic extension due date for filing Form 5500.

 

Congress Engages in Some Holiday Spending on Benefits

Congress’s recent $1.8 trillion holiday shopping spree (aka The Consolidated Appropriations Act, 2016, which became law on December 18, 2015) included a few employee benefit packages. We recently unwrapped the packages. Here is what we found.

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1.   Cadillac Tax Delayed. The largest present under the employee benefits tree is a delay in the so-called “Cadillac” tax, which as originally enacted imposed a 40% nondeductible excise tax on insurers and self-funded health plans with respect to the cost of employer-sponsored health benefits exceeding statutory limits. The tax is now scheduled to take effect in 2020 rather than 2018. Once – or if – the delayed tax provision becomes effective, it will be deductible. The cost of this gift is $17.7 billion.

Since the Cadillac tax is basically unadministrable in its current form, we can’t imagine there is even one person at Treasury who would champion it. Expect a full repeal of the tax shortly after a new administration, whether Republican or Democrat, takes office in January 2017.

2.  Medical Device Excise Tax Suspended for 2016 and 2017 and Health Insurance Tax Suspended for 2017. The Affordable Care Act, as adopted in 2010, imposes an excise tax equal to 2.3% of the sales price of certain medical devices. Opponents of the medical device tax argued that it has been a drain on the economy and has halted investment in research and development for life-saving technologies. Many members of Congress agreed. Thus, a two-year

The Tax Man Cometh Not to ID Protection Recipients Either

The Tax Man Cometh Not to ID Protection Recipients Either

January 5, 2016

Authored by: Chris Rylands and Denise Erwin

ID TheftLate last year, while you were probably busy picking out which bubbly to pop at the stroke of midnight, the IRS gave us another reason to celebrate. You may remember (as we wrote previously) the IRS said it would not require identity theft victims to include the value of identity theft restoration and protection services in their income. But what about for employers or others who provide ID theft in advance of a breach?

Well, after receiving a total of only four comments, the IRS decided to broaden the nontaxability of ID theft protection services. In providing this relief, the IRS cited comments indicating that organizations are increasingly providing ID protection services before a data breach occurs as a strategy to help with early detection of a breach and to minimize the impact on operations.

Specifically, the IRS said, in Announcement 2016-02 that it will not require individuals to include in their taxable income the value of ID protection services provided by their employers (or other organization to whom they provide personal information) before a data breach occurs. It will also not assert violations if employers or other companies fail to report the amounts on Forms W-2 or Form 1099-MISC, for example. This relief still does not apply to cash in lieu of these services or proceeds received under an ID theft policy.

Interestingly, the IRS is not saying that

The Force Awakens on 2016

The Force Awakens on 2016

January 4, 2016

Authored by: benefitsbclp

ThinkstockPhotos-101346654The ball dropped on 2016, but don’t drop the ball on your benefit plan compliance.  As part of our annual tradition, we’re pleased to present this year’s Top Ten New Year’s Countdown for the reading pleasure of our fellow ERISA geeks.  You may remember last year’s Top Ten list was set to Pop Culture themes that dominated 2014?  Well, we’ve decided to embrace the Star Wars fever that currently has a firm grip on our society and devote our entire list to Star Wars’-themed tips.  Get your lightsabers ready…

  1. This epic space opera list starts just where you’d expect it:  A long time ago in a galaxy far, far away (called Congress)…there was born a law called the Patient Protection and Affordable Care Act. The law made it through infancy and even toddlerhood…but then it required reporting of a kind never seen before.  If you’re reading this article, you likely have made it through the data collection process and you’re poised and ready to issue/file your first 1094s and 1095s.  If not, hurry hurry as the deadlines are quickly approaching.  While Notice 2016-4 did “automatically” extend the deadlines relating to the 2015 plan year, further extensions are no longer available and penalties could be assessed for failure to timely comply.
  2. The determination letter program dies and the Force Awakens.  Yes, with the determination letter program all but gone, internal document compliance audits
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