With all the national press coverage about tax savings, tax cuts and company bonus payments associated with the Tax Cuts and Jobs Act of 2017 (the “Tax Act”), it is easy to miss the changes in federal tax laws that impose substantial negative tax consequences on employers that pay certain executives an amount of compensation that Congress has deemed “excessive.” In this particular area, the changes brought about by the Tax Act do not cut taxes. Rather, for many for-profit and non-profit corporations, the Tax Act creates new taxes.
Articles Discussing General Topics In Employee Benefits.
This week, the Internal Revenue Service (IRS) issued FAQ guidance regarding the employer tax credit for paid family and medical leave. As a reminder, the Tax Cuts and Jobs Act of 2017 (the Act) provides a tax credit to employers that voluntarily offer paid family and/or medical leave to employees. The FAQs clarify some of the requirements in Section 45S of the Act that an employer’s paid family and/or medical leave policy must include. The FAQs also clarify other details, such as the basis for the credit and the tax credit’s impact on an employer’s deduction for wages paid to an employee who is on a qualifying leave.
It is well-established under the Employee Retirement Income Security Act of 1974 (“ERISA”) that when an employee benefit plan grants the plan administrator discretion to decide questions of eligibility for benefits or to construe plan terms, judicial review of the plan administrator’s denial of benefits is generally limited to the deferential abuse of discretion standard — pursuant to which a plan administrator’s decision is affirmed if it is reasonable, i.e., a reasonable person could have reached a similar decision given the evidence. Earlier this year, the United States Court of Appeals for the Eighth Circuit, in Boyd v. ConAgra Foods, Inc., 879 F.3d 314 (8th Cir. 2018), clarified when a less deferential standard of review might nonetheless apply in the review of denial of plan benefits under ERISA Section 502(a)(1)(B).
As we move into the second quarter of 2018, now is a good time to remind employers about the significant impact of the Tax Cuts and Jobs Act (TCJA) on employee benefits. While some of these issues may not affect the taxation of employee benefits directly, the new tax treatment of certain employer-provided benefits may limit the provision of those benefits. Like any change in law, the new legislation has brought with it a number of questions.
View from Jackson Lewis: The Curious Odyssey of the Multiemployer Defined Benefit Pension Fund. A review of the state of multiemployer funds.
Each year, hundreds of retirement plans are examined by the Internal Revenue Service (IRS) and Department of Labor (DOL). The agencies also examine other kinds of employee benefit plans for compliance with statutes and regulations with respect to which they have enforcement authority. In particular, the DOL has increased its examinations of group health plans in recent years in connection with the Employee Benefit Security Administration’s Health Benefits Security Project. The agencies are particularly focused on compliance issues that pose the greatest potential risk to the largest numbers of employees.
Nary a week goes by without news of a data breach by a healthcare provider…while there are certainly a good number of breaches resulting from a breach of cybersecurity defenses or from the wrongful exploitation of system security weaknesses, there is still a risk to healthcare providers resulting from the internal operations of the healthcare provider. There are frequent reports of these “internal” breaches: loss of equipment (e.g., laptops that were not secured and unencrypted USB drives), employee wrongdoing (e.g., theft of records or improper access to records to satisfy personal curiosity), and then those unfortunate “oops” moments (e.g., sending personal health information (“PHI”) to administrative vendors without a proper business associate agreement (“BAA”) in place, or a spontaneous conversation in a waiting room disclosing PHI).
Benefit plan practitioners returned to their desks after the holidays to the surprising news that the Internal Revenue Service issued guidance that made sweeping changes to the user fees for the Internal Revenue Service’s Voluntary Correction Program (“VCP”). (And notably more than one IRS agent has informally indicated they were surprised by the changes, which were almost immediately effective, as well!)
Under the Internal Revenue Code of 1986, as amended (the “Code”), businesses are entitled to a general business credit which is made up of several component credits, including the Work Opportunity Credit, the Indian Employment Credit, credits for employing and housing employees affected by Hurricane Katrina, and a number of others. The recently-enacted Tax Cuts and Jobs Act (“TCJA” or the “Act”) added a new component credit for businesses that qualify – the Paid Family and Medical Leave Credit (“FML Credit”).
This is the sixth article in our series covering the various tax and employee benefits-related changes contained in the Tax Cuts and Jobs Act signed by the President on December 22, 2017.
This is the fifth article in our series covering the various employee benefits-related changes contained in the Tax Cuts and Jobs Act signed by the President on December 22, 2017.
This is the fourth article in our series covering the various employee benefits-related changes contained in the Tax Cuts and Jobs Act signed by the President on December 22, 2017.
Below is the third article in our series covering the employee benefits-related changes contained in the Tax Cuts and Jobs Act signed by the President on December 22, 2017.
The Department of Labor has issue a proposed rule providing direction for sole proprietors and businesses to set up Association Health Plans (AHPs). This rulemaking stems from President Trump’s October 12, 2017 Executive Order 13813, “Promoting Healthcare Choice and Competition Across the United States,” which seeks to expand healthcare choice by modifying certain insurance regulations. A key component of this order is the promotion of AHPs, which allow individuals and employers to collectively purchase insurance.
Below is the second article in our series covering the employee benefits-related changes contained in the Tax Cuts and Jobs Act signed by the President on December 22, 2017.