Benefits In Brief

The Department of Labor has issued model notices for employers’ use in satisfying the Affordable Care Act requirement to provide employees with notice of coverage options available through a Health Insurance Marketplace.  Employers must distribute these notices to current employees no later than October 1, 2013, and beginning October 1, 2013, must distribute the notices to new employees within 14 days of hire.

Recently proposed IRS regulations provide guidance to employers wanting to know whether they may consider their HSA contributions, HRA credits, or wellness program incentives when testing their health plans for compliance with the “affordability” and “minimum value” requirements of the Affordable Care Act’s play-or-pay provisions.  The chart accompanying this article summarizes this guidance.

In Revenue Procedure 2013-25, the IRS has announced the 2014 inflation-adjusted amounts for health savings accounts (“HSAs”) and qualifying high deductible health plans (“HDHPs”), all as determined under Section 223 of the Internal Revenue Code.  The total annual out-of-pocket expense amounts will also apply to all “essential health benefits” offered under non-grandfathered health insurance plans and policies beginning in 2014.

The Supreme Court has handed down another important case in its line of decisions on enforcing the reimbursement provisions of self-funded ERISA welfare plans. The lesson in US Airways, Inc. v. McCutchen is, once again, the importance of an airtight reimbursement provision.

The Department of Labor (“DOL”) has released an informal set of tips for ERISA plan fiduciaries to consider when selecting and monitoring target date funds (“TDFs”) for their 401(k) plans. Fiduciaries that offer TDFs as an investment option under their 401(k) plans should review these tips and incorporate them into their investment review process.

The agencies charged with implementing the Affordable Care Act (“ACA”) have issued additional guidance on requirements taking effect in 2014.  Although much of the focus has been on the ACA’s “play or pay” requirement, this most recent guidance explains the 90-day limit on eligibility waiting periods and describes the types of plans that must comply with limits on deductibles and out-of-pocket expenses.

Many employers rely on seasonal workers – over the holidays, during the summer, or for a harvest season.  How does the Affordable Care Act (“ACA”) apply to these seasonal employees? For instance, should these employees be counted in determining whether an employer is large enough to be subject to the ACA’s “play or pay” mandate?  And assuming an employer is subject to this mandate, how do seasonal employees affect the penalties the employer might have to pay?

The IRS is now accepting applications for updated determination letters on behalf of individually designed retirement plans falling within “Cycle C” of the determination letter program. These include plans sponsored by employers having either a “3” or an “8” as the last digit of their employer identification number, as well as any governmental plan that does not elect to defer their application to Cycle E.

Noncitizen employees who are lawfully present in the United States are generally treated as U.S. citizens under the Affordable Care Act. They should therefore be considered in an employer’s efforts to comply with the ACA’s “shared responsibility” (or “play or pay”) requirement. However, employers should also be aware of certain exceptions, safe harbors, and transition rules that may apply to noncitizen employees – particularly those working on a seasonal basis.

Recent updates to the IRS’s Employee Plans Compliance Resolution System (“EPCRS”) will allow tax-exempt organizations and public schools that sponsor Section 403(b) retirement plans to correct additional compliance problems under those plans.  These changes, as reflected in Revenue Procedure 2013-12, are generally effective for corrections or submissions made on or after April 1, 2013, although they may also be applied immediately.