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The GAO Would Like Greater Clarity for Pension Reporting and Disclosure (by Plan Sponsors AND the Government)

December 19, 2013

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On November 21, 2013, the U.S. Government Accountability Office (GAO) issued a report entitled “Clarity of Required Reports and Disclosures Could Be Improved,”addressing the resources currently allocated by Congress to the oversight of private sector pension plans under ERISA by the Department of Labor (DOL), the Internal Revenue Service (IRS) and Pension Benefit Guaranty Corporation (PBGC).  The report was commissioned to “look at how useful all the pension reporting and disclosure requirements are to sponsors, participants and government officials and determine whether there are ways to improve the system.”  As plan sponsors know, participants are inundated with a deluge of disclosure requirements and there are multiple reporting requirements to various government agencies, both of which the GAO report essentially confirms.

Some of the more interesting observations of the GAO include:

  • The GAO identified 70 different reports and 60 different disclosures arising from provisions of ERISA and the Internal Revenue Code.
  • The GAO evaluated the DOL and other ERISA agencies online resources and found them to be “not clear, comprehensive or up-to-date.”  Additionally, the GAO noted that the DOL’s guide listing required reports and disclosures had not been updated since October 2008 and did not include many of the IRS reports and disclosures and several of the reports and disclosures under the DOL’s and PBGC’s purview.  The GAO also stated that neither the PBGC or IRS sites provide comprehensive information regarding reporting and disclosure requirements and noted that the PBGC site does not

Before the Ball Drops for the New Year, Don’t Forget to Address These 2013 Employee Benefit Items!

Qualified Plans

  • If your plans are filed in “Cycle C” for determinations letters (i.e., plan sponsor’s EIN ends in 3 or 8), address items needed for the IRS filing before the end of the year. The filing deadline is January 31, 2014, but notices to “interested parties” must be distributed no later than 10 days before the filing. Set that filing date and prepare the plan restatement before the ball drops.
  • If your company did not timely adopt a written 403(b) plan document, you may qualify for a reduced compliance fee under the IRS’ correction program, but only if the filing is made before the ball drops.
  • Most defined benefit plans have been amended to incorporate the benefit accrual and distribution restrictions that apply if the plan’s funding drops below certain thresholds. These Code Section 436 rules must be added to your defined benefit plan by written amendment before the ball drops if you sponsor a calendar year plan.
  • More detailed information on the above items can be found here.
  • Have your payroll and benefit administration systems been updated to reflect the new qualified plan limits for 2014? The elective deferral pre-tax/Roth limit remains unchanged at $17,500. The limit on compensation taken into account for purposes of calculating maximum contributions and benefits will go from $255,000 to $260,000. The Social Security taxable wage base will go from $113,700 to $117,000.

The Defense of Marriage Act (“DOMA”) – Repeal of Section 3

  • Qualified retirement plans, 403(b) plans

Tell Us What You Think! Employee Benefits Group Communications Survey

October 3, 2013

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Over the last two years, the Bryan Cave Employee Benefits & Executive Compensation Group has been focusing on how to best communicate with you – our valued clients and friends. In addition to our traditional Client Alerts, we’re now reaching out in other ways by sending monthly compliance reminder emails, maintaining this active and vibrant blog (benefitsbrayncave.com) and utilizing a variety of social media platforms including Twitter and LinkedIn, to bolster our visibility and connect with more people.

We’d like to hear from you about what you like, don’t like and what mediums you think serve you the best in keeping up in today’s highly regulated environment. To that end, we’ve prepared a quick survey (it should take no more than 5 minutes to complete) where you can provide us feedback on our group’s communication platform. We sincerely value your opinion and hope that you’ll take a few minutes to give us your thoughts.

To access the anonymous survey, please click here.

If you have questions, please contact us. Thanks very much for your input!

 

Individual Mandate – Final Regulations Issued

Individual Mandate – Final Regulations Issued

September 4, 2013

Authored by: benefitsbclp

Putting to rest the speculation that the individual mandate may be delayed, yesterday the Treasury Department and IRS issued final regulations regarding the individual mandate under the Affordable Care Act (“ACA”). The individual mandate requires individuals to maintain health insurance (i.e. “minimum essential coverage”) or pay a penalty (i.e. a “shared responsibility payment”).

The final regulations made a few clarifications but largely left unchanged the proposed regulations (released Jan. 30th). Individuals should go into 2014 with the expectation that they will pay the shared responsibility penalty unless they have minimum essential health care coverage.

Changes include the following:

Definitions: • Specifically identifying the terms used in IRC § 5000A, which requires the shared responsibility payment, are the same terms otherwise used in the ACA (e.g. health insurance coverage, health insurance issuer, individual market, and state).

Minimum Essential Coverage: • Clarifying that eligible employer-sponsored plans include plans issued on behalf of an employer. • Modifying the definition of “self-insured group health plan” to be an eligible employer-sponsored plan, regardless of whether the plan could be offered in the large or small group market in a state. • Clarifying (i) that qualified health plans offered through Exchanges are plans in the individual market and (ii) that a plan offered to one specific individual is a plan in the individual market only if the plan is health insurance coverage under the ACA.

Exempt Individuals: • Clarifying that an individual eligible for continuation or retiree coverage because of a relationship to a former

Heads Up – SCOTUS Decision Tomorrow on Same-sex Marriage

Heads Up – SCOTUS Decision Tomorrow on Same-sex Marriage

June 25, 2013

Authored by: benefitsbclp

Tomorrow, Wednesday June 26th, the Supreme Court is expected to release two opinions related to same-sex marriage: Windsor v. United States – a constitutional challenge to Section 3 of DOMA and Hollingsworth v. Perry – a constitutional challenge to Prop 8.  [Additional background information may be found here.]

While same-sex marriage supporters wait anxiously for the rulings, employers are also waiting to see how these rulings may affect employee benefit offerings.  A broad ruling could mean that employers would need to provide benefits and protections to same-sex spouses immediately, though many commentators believe that the court will not rule broadly in either case (i.e. both cases could be dismissed for lack of standing).

If the court does overturn Section 3 of DOMA, many uncertainties for employers would still exist, such as what benefits and protections must be provided to same-sex spouses that married in one state but now live in a state that does not recognize same-sex marriage.  Due to Section 2 of DOMA (this section is not at issue in the current case), states are able to avoid recognizing same-sex marriages performed in other states under the Full Faith and Credit Clause.  If Section 3 is overturned, will Section 2 still be valid and enforceable? Will employers need to keep track of what states their employees were married in and what states they currently reside in and change benefits accordingly? We’ll just have to wait and see what SCOTUS says.

News & Notes – December 7, 2012

News & Notes – December 7, 2012

December 7, 2012

Authored by: Chris Rylands

Below is our most recent list of News & Notes from the week that was.  Let us know what you think.  Should we continue this feature?

  • Continuing with our unplanned New York theme, the New York Times recently reported how some non-traditional medical practitioners were lobbying to be included as “essential health benefits” under health care reform.  Is acupuncture essential?
  • Going completely to the other coast, CBS Los Angeles reported that LA County officials were scrambling to retain “paying patients” ahead of 2014.
  • Finally, can you imagine buying health insurance at the grocery store?  That may happen in the future, says this Kaiser Health News report.  Seeing the premium quotes might make us think twice about some of our purchases (Twinkies are healthy, right?).

Have a link that you’d like to share?  Leave us a comment below or send it to us at LinkedIn or Twitter.

 

News & Notes – November 16, 2012

News & Notes – November 16, 2012

November 16, 2012

Authored by: Chris Rylands

Just as we did last week, below, we share some recent benefits-related(ish) stories and other links.

  • Today would have been the deadline for states to submit their PPACA health insurance exchange blueprints, but HHS extended the deadline for the blueprints and then, a few days later, extended the deadline for states to tell HHS if they were starting an exchange.   As these reports from Kaiser show, some states are in and some states are out.  State Refor(u)m is keeping a list of state responses here.
  • The IRS released the latest edition of the Employee Plans News with some helpful information about plan administrative issues.
  • The New York Times recently featured one company that is offering income for life through its 401(k) plan.  Is this something you’re considering?
  • This Wall Street Journal article shares some innovative weight loss technologies employers are using to curb health care costs.

Have a link that you’d like

News & Notes – November 9, 2012

November 9, 2012

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News & Notes – November 9, 2012

November 9, 2012

Authored by: Chris Rylands

As a new feature here on benefitsbclp.com, we are going to regularly share some recent benefits-related(ish) stories and other links.

  • Get out your flotation devices because Politico is predicting a post-election flood of health care reform guidance.
  • Several states had PPACA measures on the ballot.  You can check out this list of the measures, and how they fared on election night.
  • Speaking of health care and elections, this Washington Post article says many employees are overwhelmed by open enrollment.
  • And just when you thought we were done with PPACA litigation, the Obama administration has said it does not have a problem with the Supreme Court allowing Liberty University’s challenge to PPACA to be reviewed at the Fourth Circuit.
  • A Plan Sponsor Council of America study showed that participant fee disclosure did not significantly change participant behavior, but it did change the behavior of some plan sponsors.
  • Do you think you know your facts about health care?  Take this short LA Times quiz and see how your score.

Have a link that you’d like to share?  Leave us a

Health Care Reform: What Are You Worried About? Tell Us!

We’re working on putting together a series of roundtables to help our clients and friends discuss their worries and strategies to deal with health reform/PPACA now that the Supreme Court has weighed in.  We want to make sure the program is helpful and impactful so we want to hear from YOU.  What are your biggest compliance concerns?  What do you want to hear more about?

  • Summaries of benefits and coverage,
  • Form W-2 reporting of the cost of health coverage,
  • $2,500 limit for health FSAs,
  • How to handle medical loss ratio rebates,
  • Preparing for the 2013 increase in Medicare tax,
  • 90-day limitations on waiting periods,
  • The “shared responsibility” (aka “play or pay”) penalties for employers,
  • Increased incentives for wellness programs,
  • Non-discrimination rules for insured health plans,
  • Automatic enrollment in health plans for employers with at least 200 employees,
  • Why employers need to consider the impact of the Supreme Court ruling on Medicaid expansion, or
  • Anything else?

What strategies have you heard about that you would like to discuss more?  Please leave us a comment below or drop a line to your Bryan Cave benefits contact and let us know your thoughts!

Other Health Care Reform Posts

Disclaimer/IRS Circular 230 Notice

 

How Will Taxmageddon Affect You?

June 20, 2012

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How Will Taxmageddon Affect You?

June 20, 2012

Authored by: Serena Yee

In the event the U.S. Supreme Court strikes down the entire 2010 health care reform bill, individual and married taxpayers with income in excess of $200,000 and $250,000 respectively will dodge the 0.9% Medicare surtax on earned income and 3.8% Medicare surtax on most investment income scheduled to take effect January 1, 2013.  But that’s not the end of the scheduled tax increases for 2013.

Assuming Congress takes no action and the Bush-era tax cuts expire at the end of 2012, the individual tax rates for 2013 will be as follows:

 

2012

2013

Ordinary Income Tax Rates andShort-Term Capital Gains Rates

35%

33%

28%

25%

15%

10%

39.6%

36.0%

31.0%

28.0%

15%

15%

Long-Term Capital Gains Rates

15% (35% income tax bracket)

15% (33% income tax bracket)

15% (28% income tax bracket)

15% (25% income tax bracket)

0% (15% income tax bracket)

0% (10% income tax bracket)

20% (39.6% income tax bracket)

20% (36% income tax bracket)

20% (31% income tax bracket)

20% (28% income tax bracket)

10% (15% income tax bracket)

Dividend Rates

15%

0%

Dividends will be taxed at ordinary income rates.

In addition, the following individual income tax limitations/phase-outs are scheduled to be reinstated in 2013:

  • The “Pease” limitations on certain itemized deductions for higher income taxpayers were temporarily repealed through 2012. The limitation reduces
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