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DISCLAIMER: This blog is published for general information only - it is not intended to constitute legal advice and cannot be relied upon by any person as legal advice.  U.S. Treasury Regulations require us to notify you that any tax-related material in this blog (including links and attachments) is not intended or written to be used, and cannot be used, for the purpose of avoiding tax penalties, and may not be referred to in any marketing or promotional materials.  While we welcome you to contact our authors, the submission of a comment or question does not create an attorney-client relationship between the Firm and you. 

Entries in Plan Administration (54)

Thursday
Mar152018

Time is Running Out – New Disability Claims Procedures Take Effect April 2, 2018

It has been a long time coming, but the Department of Labor’s final rule regarding disability benefit claims procedures (the “Final Rule”) will finally take effect on April 2, 2018.  Employers need to determine which of their ERISA plans will be subject to the Final Rule and implement the changes necessary to comply by April 2, 2018.  Any benefit plan that is subject to ERISA and allows a claims administrator to exercise discretion in determining whether a participant is disabled (rather than relying on an independent determination from the Social Security Administration for example) must take steps to comply with the Final Rule. 

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Thursday
Mar152018

IRS Reduces 2018 HSA Family Contribution Limit

The IRS has lowered the dollar limit on deductible contributions to health savings accounts (HSAs) for individuals with family coverage under a high deductible health plan.  The new limit for 2018 is $6,850, down from the $6,900 limit announced last fall.

Rev. Proc. 2018-18, issued on March 5, 2018, adjusted the limit to account for changes resulting from the tax reform bill passed in December.  The limit for individuals with self-only coverage remains $3,450.  There is no change to deductible and out-of-pocket expense limits for a plan to qualify as an HDHP.

Employers who have already contributed the maximum amount to employees’ HSAs for 2018 based on the higher limit should correct the contribution as necessary, and employers offering HDHPs may wish to notify employees that may be affected by the change.

Rev. Proc. 2018-18 announces inflation adjustments and modifies a variety of tax-related limitations, including limits on excludable amounts under adoption assistance programs.  The limit for benefits that may be excluded from income under an adoption assistance program is now $13,810, down from $13,840 as previously announced.  The income phase-out for this exclusion now begins at $207,140 and fully phases out at $247,140, down from $207,580 and $247,580.

Tuesday
Feb202018

Controlled Group Rules for Tax Exempt Organizations: A Brief Review

Corporate entities under common control are generally treated as a single employer for purposes of applying the core rules that govern employee benefit plans and executive compensation arrangements.  For that reason, a complete and accurate controlled group analysis can be critical in determining and monitoring the legal compliance status of a benefit plan.  For example, subject to a couple of exceptions, nondiscrimination testing typically must be performed on a controlled group basis.  A controlled group analysis is needed to determine whether a retirement plan covering more than one employer is a single employer plan or a multiple employer, and whether a group health plan that covers more than one employer is a single employer plan or a multiple employer welfare arrangement (or MEWA).  A controlled group analysis is also critical to identify which members of a group of related entities can be held jointly and severally liable for pension plan underfunding liabilities. 

The controlled group rules should be considered any time there have been (or are expected to be) changes in the composition of the group, particularly if a new member organization is added.  The rules that govern the determination of control relationships among organizations exempt from tax under Code Section 501(a) – “tax-exempt organizations” – are found in Treasury Regulations Section 1.414(c)-5.  Given the pace of change in the tax-exempt world, particularly among local and regional health systems, we think these rules worth revisiting. 

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Tuesday
Nov282017

Practical Guidance for Required Minimum Distributions and Missing Participants

Retirement plan administrators often run into this problem:  a participant has reached his or her required beginning date – the date on which distributions must commence under the required minimum distribution (RMD) rules of Code Section 401(a)(9) – and the participant cannot be located.  A recent IRS Field Memorandum provides guidance to IRS examiners that plan administrators should find helpful.  The Memorandum, dated October 19, 2017, states that field examiners “shall not challenge” a qualified plan as failing to satisfy the RMD rules in situations where a distribution to a participant or beneficiary has not been made and the plan has:

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Thursday
Aug102017

Sound Process and Good Recordkeeping Demonstrate Compliance with COBRA Notice Requirements

Earlier this year the Eleventh Circuit Court of Appeals provided a reminder of how important it is for an employer to establish and follow proper COBRA notice procedures and preserve some type of evidence that the procedures are followed.  Employers who do those things will find that their efforts are rewarded if a COBRA beneficiary claims the employer failed to comply with COBRA's notice requirements.

In DeBene v. BayCare Health System, Inc., the Eleventh Circuit upheld a summary judgment issued against Paul DeBene, a former employee of BayCare Health Systems.  Among other claims, DeBene alleged that he did not receive the required COBRA notice after terminating employment.  In ruling for BayCare the court cited BayCare’s notice procedures, evidence that those procedures were followed, and evidence that other notices sent on the same day successfully reached their intended recipients.  The court determined that such evidence was sufficient to show that BayCare met its obligations under COBRA, regardless of whether DeBene actually received the notice.

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