Health Care Reform Updates

 

Articles:

 

New IRS DOMA Guidance for Retirement Plans

Recent IRS Notice 2014-19, along with website FAQs, provide additional anticipated guidance (in Q&A format) on the impact of United States v. Windsor for qualified plans. Importantly, the guidance clarifies the impact of the change, the effective date of the change, and the need for (and timing of) plan amendments. The related FAQs also provide examples of the impact of the Windsor decision and appropriate corrective action, including for plans described in section 403(b) of the Internal Revenue Code (“Code”). Please see the attached article for further information.

View the Memo

This article has been posted with permission from Groom Law Group, Chartered. Groom Law Group is a Washington, DC-based law firm of 60 attorneys that focuses exclusively on employee benefits issues. More information about the firm and its attorneys can be found at www.groom.com
 
 

IRS Final Regulations Impose Complex Information Reporting Requirements on Insurers, Employers and Other Entities Who Provide Health Coverage

Beginning in 2016 (for information on 2015), insurers and self-funded plans will be required to report information about health coverage provided during the prior year to all enrollees, including Taxpayer Identification Numbers of all covered individuals and the specific dates that such individuals had such health coverage, as required by Code section 6055.

In addition, employers with 50 or more full-time equivalent employees will be required to report information about health coverage offered during the prior year to full-time employees, including information about the lowest cost option offered and whether the minimum value requirements were satisfied, as required by Code section 6056. In March, the IRS published long-awaited final regulations outlining these two new reporting requirements, which largely track proposed regulations issued on September 9, 2013. 79 Fed. Reg. 13231 (March 10, 2014); 79 Fed. Reg. 13220 (March 10, 2014).

The regulations specify that the information will be reported on new IRS Forms 1094 and 1095, which have not yet been released, and not on Form W-2, as many had hoped. The proposed regulations were modified in a few respects in response to comments, but the reporting requirements generally remain complex. Please see the attached article for further information.

View the Memo

This article has been posted with permission from Groom Law Group, Chartered. Groom Law Group is a Washington, DC-based law firm of 60 attorneys that focuses exclusively on employee benefits issues. More information about the firm and its attorneys can be found at www.groom.com
 
 

Recent IRS Developments Affecting VEBAs and Group Term Life Insurance Plans

The IRS recently released two pieces of guidance that address issues you may have struggled with if your company funds retiree medical benefits through a VEBA (voluntary employees’ beneficiary association described in Section 501(c)(9) of the Internal Revenue Code of 1986 (“Code”)) or provides optional employee-pay-all group term life insurance. In both areas, the rules are quite arcane and non-intuitive – we make an effort to cut through the complexity in the attached memo.

View the Memo

This article has been posted with permission from Groom Law Group, Chartered. Groom Law Group is a Washington, DC-based law firm of 60 attorneys that focuses exclusively on employee benefits issues. More information about the firm and its attorneys can be found at www.groom.com

 
 

Guidance Permits Carryover of Up to $500 of Unused Health FSA Balances

On October 31, the IRS and the Treasury modified the “use or lose” rule that applies to health flexible spending arrangements (“FSAs”) with Notice 2013-71. Employers may now allow employees to carryover up to $500 of unused FSA balances to the next plan year. The Notice permits employers to adopt the carryover provision as early as the current 2013 plan year.

The Notice also clarifies the transition relief provided in earlier proposed regulations so that employers of all sizes can permit certain changes in salary reduction elections for their non-calendar year cafeteria plans. Please see the attached memo for further information.

View the Memo

This article has been posted with permission from Groom Law Group, Chartered. Groom Law Group is a Washington, DC-based law firm of 60 attorneys that focuses exclusively on employee benefits issues. More information about the firm and its attorneys can be found at www.groom.com
 
 

Guidance Eliminates Use of Stand-Alone HRA or Cafeteria Plan to Purchase Individual Health Policies But Provides Helpful Exemption for Employee Assistance Programs

On Friday, September 13, 2013, Treasury published Notice 2013-54 (“Notice”), which eliminates an employer’s ability to use a stand-alone health reimbursement arrangement (“HRA”) or other tax-favored arrangement, such as a cafeteria plan, to help employees pay for individual health insurance policies on a tax-free basis.The Notice does this by pointing out that such arrangements would fail to satisfy the Affordable Care Act’s (“ACA’s”) annual dollar limit and preventive health services “market reform” provisions.

The Notice also discusses a long-standing exemption from certain group health plan requirements for health flexible spending arrangements (“health FSAs”) that meet the definition of an excepted benefit, and provides a new exemption for Employee Assistance Programs (“EAPs”) that do not provide significant benefits in the nature of medical care or treatment.

The Notice applies for plan years beginning on or after January 1, 2014, but taxpayers may apply the guidance for prior periods. In the attached memo, we discuss the types of arrangements that will and will not be legally permissible after the Notice takes effect.

View the Memo

This article has been posted with permission from Groom Law Group, Chartered. Groom Law Group is a Washington, DC-based law firm of 60 attorneys that focuses exclusively on employee benefits issues. More information about the firm and its attorneys can be found at www.groom.com
 
 

IRS “Place of Celebration” Rule For Same-Sex Marriages Expands Rights and Simplifies Plan Administration

On August 29, the IRS and Treasury issued their first wave of guidance regarding the impact of United States v. Windsor – in which the Supreme Court declared section 3 of the Defense of Marriage Act (“DOMA”) unconstitutional – under the Internal Revenue Code. Revenue Ruling 2013-17 (the “Ruling,”), along with two sets of “Frequently Asked Questions,” provide important guidance on two key open issues – the definition of “spouse,” and the effective date of the decision, for Federal tax purposes.

Click here to read more.

IRS Announces That All Legal Same-Sex Marriages Will Be Recognized For Federal Tax Purposes

The U.S. Department of Treasury and the Internal Revenue Service today announced that in response to the Supreme Court decision holding the federal Defense of Marriage Act (“DOMA”) is unconstitutional, they will adopt a “place of celebration” rule that will treat same-sex couples who are legally married in a state that recognizes such marriages as married for purposes of all federal tax laws – including tax laws relating to employee benefits.

Put simply, for purposes of federal tax laws, it will not matter if a married same-sex couple resides in a state where such marriages are not recognized; all that matters is whether they were married in a state where such marriages are recognized. The new rules are set forth in Revenue Ruling 2013-17. The ruling also addresses how employees can file claims for refunds for income tax that was previously imputed to them based on the extension of health and welfare benefits to a same-sex spouse.

Click here to read more.

 
 

Dissecting Health Reform On a Company Level – Report on PPACA Impact And Potential Mitigation of Costs (White Paper)
Reprinted with permission.

This white paper is designed to provide information and provoke a thought process for the top legal minds, top employee benefit organizations, insurance companies, contracted administrators and employers with the emphasis on helping the American people and the American businesses / employers in mitigation of the additional mandated fees, taxes and costs associated on PPACA (The Patient Protection and Affordable Care Act) from the review of the language in Public Law 111-148. 

 
 

Treasury Delays Employer Responsibility and Information Reporting Requirements Until 2015

This evening, Treasury made an announcement in the “Treasury Notes” blog that it is delaying the implementation of the Code section 6055 and 6056 information reporting provisions until 2015. This news was expected since no reporting guidance has been issued to date. Surprisingly, however, Treasury also announced its decision to delay the effective date for the employer shared responsibility liability itself until 2015.

The announcement states that Treasury recognizes that the Code section 4980H employer shared responsibility provisions could not be enforced without information reporting, and so Treasury is also delaying the application of the Code section 4980H employer shared responsibility provisions until 2015. This is welcome news given the fact that the employer shared responsibility proposed regulations, which were published on January 2, 2013, leave several questions unanswered

(see http://www.groom.com/resources-734.html). Formal guidance setting forth the details of this transition relief is expected shortly.

This article has been posted with permission from Groom Law Group, Chartered. Groom Law Group is a Washington, DC-based law firm of 60 attorneys that focuses exclusively on employee benefits issues. More information about the firm and its attorneys can be found at www.groom.com
 
 

 

These articles have been posted with permission from Groom Law Group, Chartered. Groom Law Group is a Washington, DC-based law firm of 60 attorneys that focuses exclusively on employee benefits issues. More information about the firm and its attorneys can be found at www.groom.com.