Benefits Law

Under the Affordable Care Act, group health plans for employers with fewer than 50 full-time employees must provide employees with a set of 10 essential benefits. Large employers don’t have to provide those benefits. Final regulations allow small employers to join in so-called association health plans and, in so doing, be treated as large employers.
The talent retention imperative can prompt HR to offer new benefits to induce employees to stay with the company. Now is the time to educate HR and the C-suite on the finer points of payroll taxation. If you don’t, those shiny new benefits will be taxable, which defeats the purpose of offering them in the first place.
As you evaluate your health insurance options for the upcoming benefits year, you may be considering whether to offer high-deductible health plans, coupled with health savings accounts. HDHP/HSAs are a combination that can save big bucks for employers and employees alike.
Under final regulations that become effective with the 2020 plan year, the designation of essential health benefits will become more flexible. The regs also revise some rules for small employers that want to enroll through the Small Business Health Options Programs.
The Tax Cuts and Jobs Act repeals the deduction for alimony for couples who divorce, beginning in 2019. That’s putting a lot of pressure on couples to get their ducks in a row this year. And it also means that you may be facing an onslaught of qualified domestic relations orders, or QDROs.
Glitches in the Tax Cuts and Jobs Act began bubbling to the surface almost the minute it was signed into law. Although there are higher priority items that need clarification and correction, one little-noticed provision may have an outsized impact on 401(k) plans that allow employees to take hardship distributions.

Final regulations now allow the Pension Benefit Guaranty Corporation to accept transfers made by terminating 401(k) plans if you can’t find former employees, but need to make distributions to them on account of the plan’s termination.

The IRS has now concluded that fixed indemnity plan benefits are fully taxable if the average amount employees receive predictably exceeds their after-tax contributions.

Qualified small employers that offer health reimbursement accounts, but no other major medical plan to employees, don’t have to worry about the Affordable Care Act’s excise tax on group plans that don’t meet the market reform provisions. But contributions may be taxable and subject to withholding.

What’s in a name? An awful lot if you use an off-the-shelf 401(k) plan. You don’t have to spend big bucks to design and maintain an individualized plan and the IRS doesn’t have to spend its limited time and resources auditing that plan.