Late in the afternoon on Friday, December 14, Federal US District Judge Reed O’Connor struck down the Affordable Care Act (ACA) in its entirety, a feat that was, for the past few years, unsuccessfully attempted by the Republican-led Congress. O’Connor reasoned that if the individual mandate is no longer valid, the entire ACA must also be scrapped, because the rest of the ACA is “inseverable” from the individual mandate. The opinion is likely to be appealed, and the final decision may ultimately lay with the US Supreme Court. Despite the ruling, Centers for Medicare & Medicaid (CMS) has stated that the exchanges remain open and 2018 and 2019 coverage will not be impacted.
On November 6, 2018 the European Court of Justice (ECJ) passed judgment on two German cases (Max-Planck-Gesellschaft zur Förderung der Wissenschaften eV v Shimizu [C-684/16] and Kreuziger v Land Berlin [C-619/16]) concerning untaken paid annual leave entitlement. The ECJ ruled that accrued annual leave entitlements cannot be automatically forfeited if the worker does not place a request for holiday, and also applies to compensation claims at the termination of employment. These entitlements only cease if the employer has given workers ample opportunity to take the leave in question on time.
Sponsors and fiduciaries of health and welfare plans should be aware of a recently filed class-action lawsuit against alleged fiduciaries of a health plan. It challenges health-plan fiduciary oversight and reasonableness of fees similar to actions against fiduciaries of defined-contribution retirement plans. The action highlights the importance of establishing and documenting prudent fiduciary processes for making decisions on behalf of health and welfare plans.
Given the rise of the #MeToo movement, companies are having to deal with many issues when drafting employee agreement contracts. In a presentation, Evan Belosa discussed these issues, including triggering events, nondisclosure agreements and restrictive covenant changes. He also addressed latest trends in state and local law affecting hiring and management of the workforce.
Join us Friday, December 7 for our monthly Fridays With Benefits webinar. New proposed rules make the HRA an interesting option for employers beginning in 2020. Join McDermott lawyers for an interactive discussion regarding the “Integrated HRA” the “Excepted Benefit HRA” and the medical plan design opportunities they present.
Join our lively 45-minute discussion while we tackle the following items:
- Can we really get out of the medical coverage game?
- How does the Integrated HRA work?
- What are the next steps?
Friday, December 7, 2018
10:00 – 10:45 am PDT
11:00 – 11:45 am MDT
12:00 – 12:45 pm CDT
1:00 – 1:45 pm EDT
Yesterday, the IRS released Notice 2018-94. This notice extends the due date for furnishing to individuals the 2018 Form 1095-B, Health Coverage, and the 2018 Form 1095-C, Employer-Provided Health Insurance Offer and Coverage from January 31, 2019 to March 4, 2019. Note that the 1095-C reporting to the IRS has not been extended. The deadline for filing to the IRS is February 28, 2019 (if not filing electronically) or April 1, 2019, if filing electronically. This notice also extends good-faith transition relief from reporting penalties for 2018.
The Employee Retirement Income Security Act of 1974 (ERISA) has long been a source of complex and often-expensive litigation for employers. However, as the number of actions brought by employees under ERISA have surged, employer-defendants have often relied on the so-called top-hat exemption to dismiss certain claims involving executives. Now, several federal courts of appeals have addressed the disputed contention that the presence of employee bargaining power is required for a plan to fall under the top-hat exemption. In this article, Elizabeth Rowe, J. Christian Nemeth and Joseph Urwitz look at recent appeals court decisions and their effects on this exemption.
Originally published in Benefits Law Journal, Autumn 2018
The IRS recently issued proposed amendments to regulations concerning 401(k) plan hardship distributions. The proposed regulations address changes to hardship distribution rules from the Bipartisan Budget Act of 2018 and other legislation.
Though the regulations are only proposed, 401(k) plan sponsors should promptly consider these changes because decisions should be made on applying certain optional changes, which generally can be effective for plan years beginning after December 31, 2018.
Any employer who has six or more employees in Massachusetts in any calendar month after November 2017 is required to complete a Health Insurance Responsibility Disclosure (HIRD) form by November 30, 2018. The HIRD form is used by MassHealth to collect information about employer-sponsored insurance offerings. The Massachusetts Department of Revenue recently published a set of FAQs stating that the HIRD form:
- Is filed by an employer through the employer’s MassTaxConnect web portal (the employer clicks the “File health insurance responsibility disclosure” link to access the form);
- May be filed by an employer’s third-party payroll provider on the employer’s behalf, though it is the employer’s responsibility to make sure the form is timely filed;
- Will not be used to impose fines or penalties related to the employer’s insurance offerings;
- Must be filed annually by November 30 in future years; and
- Does not require employees to complete a separate form. Employers may recall that a prior version of the HIRD form which was discontinued in 2014 required both the employer and the employee to complete forms.
The FAQs do not specifically establish a penalty for failing to meet the annual November 30 deadline. There is also a possibility that a court could determine that the Employee Retirement Income Security Act of 1974 preempts the HIRD requirement, meaning that employers would no longer be required to file the form if the requirement were challenged in court. However, we recommend employers submit the HIRD form by the fast-approaching deadline on November 30, 2018.
Yesterday, November 15, 2018, the Internal Revenue Service (IRS) increased the annual maximum salary reduction limit for contributions to a health flexible spending account to $2,700. The 2019 contribution limit was published in Rev. Proc. 2018-57. The 2018 contribution limit was $2,650, resulting in an increase of $50 for 2019. An employer may use the increased limit for both health flexible spending accounts and limited purposed health flexible spending accounts that it maintains for its employees.