Many employers have contacted us over the years asking whether they may offer an “employer–payment plan” rather than offer a traditional group health insurance plan. An employer-payment plan is a type of account-based plan that provides an employee reimbursement for all or a portion of the premium expense for individual health insurance coverage or other non-employer hospital or medical insurance.
Articles Discussing General Topics In Employee Benefits.
The aging of the baby boomer generation has increased the level of scrutiny with which the Department of Labor, Employee Benefits Security Administration (“EBSA”) will review the efforts of pension plans to locate missing plan participants who did not receive reported benefits. The focus of the EBSA which began with a review of the efforts of defined benefit plans to find and pay benefits to participants has now expanded to include defined contribution plans.
On May 31, the IRS issued a proposed regulation — presented in Q & A format — concerning income tax withholding obligations on non-rollover distributions from employer-sponsored plans — including pension, annuity, profit sharing, stock bonus and any other deferred compensation plan — to destinations outside the U.S. Unlike U.S. payees, non-U.S. payees cannot elect to forego income tax withholding on such distributions.
Believe it or not, it may be time to distribute a new Summary Plan Description (SPD) to include all changes made since the last issuance or a Summary of Material Modifications (SMM) for any amendments adopted during the 2018 plan year.
On May 1, 2019, the IRS issued Revenue Procedure 2019-20, which reopens the determination letter program in a limited manner for individually designed plans that are merged plans or statutory hybrid plans, such as cash balance plans. The new IRS guidance provides that sponsors of merged plans may request determination letters going forward, while sponsors of statutory hybrid plans may request determination letters only during a limited window of time. The effective date of the new guidance is September 1, 2019.
Worksite medical clinics, some offering round-the-clock access to medical providers via telemedicine, seem to be growing in popularity. Promoters tout cost savings resulting from what would otherwise be lost productivity (employees whiling away afternoons waiting to see their private doctors or having to drive long distances to have blood drawn for routine laboratory work) and expenses otherwise borne by self-insured group health plans at a far higher cost per service. Some worksite clinics have existed for decades for reasons other than cost-savings – for example, to ensure immediate treatment is available to employees if work-related injuries or illnesses occur or as part of a workplace well-being program.
The Tax Cuts and Jobs Act (the “Tax Act”) significantly changed the federal income tax rules. Several of these changes impact income tax withholding, including changes to the tax rates and brackets, increasing the standard deduction, and eliminating personal exemptions.
Long on the wish list of practitioners and plan sponsors alike, self-correction of certain common plan document issues and loan failures is finally an option under the Internal Revenue Service’s Employee Plans Compliance Resolution System (“EPCRS”), newly minted via Rev. Proc. 2019-19.
On January 15, 2019, the federal Eighth Circuit Court of Appeals issued its decision in Peterson v. UnitedHealth Group, Inc., 913 F.3d, 769 (8th Cir. 2019), in which the Court upheld the federal district court’s holding that UnitedHealth Group, Inc. (“United”) was not authorized to reduce (or “offset”) payments to medical providers under ERISA group health plans for which United was the third-party administrator (or “TPA”) by the amounts United determined had been previously overpaid to the same providers under completely different group health plans also administered by United. This practice is known as “cross-plan offsetting.”
Dear Littler: My company recently hired a new employee who is giving our human resources department some pushback on submitting his W-4. The HR manager says the employee mentioned something about not being subject to income tax? Is this possible? How should we direct HR to respond?
Over the past several years, sponsors of defined benefit pension plans have examined and implemented ways to reduce their pension liabilities. This is sometimes referred to as “de-risking.” One de-risking option is for a plan to offer a limited-duration window where participants who normally do not have the option to do so can elect to receive the value of their benefits in a lump sum (rather than a stream of payments over an extended time-period).
In 2008, the IRS established a voluntary correction program aimed at plan sponsors and administrators to encourage resolution of plan document or operational failures as soon as they are discovered. The Employee Plans Compliance Resolution System, or “EPCRS” as it is most often called, stresses the importance of established administrative practices and procedures to avoid Internal Revenue Code failures that may arise from a lack of such practices and procedures. EPCRS consists of three programs, Self-Correction Program (SCP), Voluntary Correction Program (VCP), and the Audit Closing Agreement Program (Audit CAP). Each of the correction principles and methodologies in EPCRS apply to all three programs.
The Pension Benefit Guaranty Corporation (PBGC) recently proposed amendments to the regulations that govern how multiemployer plans calculate withdrawal liability. The PBGC has invited comment on these proposed regulations through April 8, 2019.
In Notice 2018-99, the Internal Revenue Service sets forth interim guidance for taxpayers to determine parking expenses for qualified transportation fringes (QTFs) that are nondeductible and for tax-exempt organizations to determine the increase in unrelated business taxable income (UBTI) attributable to nondeductible parking expenses. The Tax Cuts and Jobs Act (Act) amended these tax provisions effective for amounts paid or incurred after December 31, 2017.
As tax time rapidly approaches, taxpayers in states with high state and local income taxes (such as New York) are about to learn, up close and personal, just how much the loss of the deduction for state and local taxes (SALT) will affect their personal tax liability. A little-publicized provision of the New York Tax Law, however, may take away some of the sting of losing the SALT deduction.