May 7 Compliance Update
Health savings accounts. The limit on deductible health savings account (HSA) contributions for 2018 is now back to $6,900 for individuals with family coverage under a high deductible health plan (HDHP). In March, this amount was reduced by $50 (to $6,850) due to a change in the inflation adjustment calculations enacted under the Tax Cuts and Jobs Act of 2017. However, after receiving complaints that the reduction would impose administrative and financial burdens on stakeholders, the IRS determined that it is in the best interest of sound and efficient tax administration to revert back to the original amount of $6,900. According to the latest guidance, an individual who receives a distribution from an HSA of an excess contribution (with earnings) based on the $6,850 deduction limit may repay the distribution to the HSA and treat the distribution as the result of a mistake of fact due to reasonable cause. Alternatively, an individual who does not repay the distribution to the HSA may treat it as an excess contribution returned before the due date of the return.
Health care reform. The IRS is providing relief that helps employers that first claim the Small Business Health Care Tax Credit for all or part of 2016 (or a later taxable year) for coverage offered through a Small Business Health Options Program (SHOP) marketplace, but don’t have SHOP plans to offer employees for all or part of the remainder of the credit period because the counties where the employers are located have no SHOP marketplace plans. The relief, allows these employers to claim the credit for health insurance coverage provided outside of a SHOP marketplace for the remainder of the credit period if that coverage would have qualified under the rules that applied before January 1, 2014.
Mental health benefits. The U.S. Departments of Labor (DOL), Health and Human Services (HHS), and the Treasury have issued proposed frequently asked questions (FAQs) regarding nonquantitative treatment limitations (NQTLs) and disclosure requirements in connection with the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA). The guidance was developed pursuant to Sec. 13001(b) of the 21st Century Cures Act.
Also released was a revised draft model form that participants, enrollees, or their authorized representatives could — but would not be required to — use to request information from their health plan or issuer regarding NQTLs that may affect their mental health/substance use disorder benefits, or to obtain documentation after an adverse benefit determination to support an appeal. The revision incorporates feedback received on the original draft form, which was issued last June.
Additionally, a self-compliance tool was released that can help group health plans, plan sponsors, plan administrators, group and individual market health insurance issuers, state regulators, and other parties determine whether a group health plan or health insurance issuer complies with the MHPAEA and related requirements applicable to ERISA group health plans.
Paid sick leave. New Jersey Governor Phil Murphy has signed expansive legislation that will allow employees to accrue one hour of earned sick leave for every 30 hours worked, up to 40 hours each year. The law, which takes effect on October 29, 2018, allows paid sick leave to be used for the following reasons:
Diagnosis, treatment, or recovery from a mental or physical illness or injury, or preventive care, for the employee or a family member;
Obtaining services if the employee or a family member is a victim of domestic or sexual violence;
Circumstances arising from a public health emergency; and
A school-related meeting or event with regard to the employee’s child.
New Jersey was added to the list of states that mandate paid sick leave.
Employment costs. The U.S. Bureau of Labor Statistics (BLS) released the Employment Cost Index for the first quarter of 2018. Compensation costs for civilian workers increased 0.8 percent, seasonally adjusted, from January to March. Wages and salaries (which make up about 70 percent of compensation costs) rose 0.9 percent, while benefits (which comprise the remaining 30 percent of compensation costs) increased 0.7 percent.
EEO reporting. The deadline for filing the 2017 EEO-1 Report has been extended to June 1, 2018, according to a notice posted on the Equal Employment Opportunity Commission (EEOC) website; the original deadline was March 31, 2018. All employers in the private sector with 100 or more employees, and federal contractors and subcontractors with 50 or more employees and a federal contract or subcontract amounting to $50,000 or more, must file the EEO-1 Report annually with the Joint Reporting Committee. Covered employers are required to provide workforce profiles by race, ethnicity, sex, and job category. The preferred method for completing the EEO-1 Report is the web-based online filing system.
Workforce trends. Most companies (94 percent) have innovation on their core agenda this year, and 96 percent are planning organization design changes, according to a global talent survey from Mercer. At the same time, employees are seeking control of their personal and professional lives, with more than half asking for more flexible work options