As applicable large employers subject to the Employer Shared Responsibility Mandate (ALEs) prepare to comply with their reporting obligations for 2017 under the Affordable Care Act (ACA), the IRS is gearing up for employer shared responsibility enforcement. Earlier this month, the IRS issued FAQs 55 through 58 informing ALEs of the planned procedure to enforce the employer shared responsibility payment.

The general procedures that the IRS will use to propose and assess the employer shared responsibility payment are described in Letter 226J. Among other things, Letter 226J will include an employer shared responsibility payment summary table itemizing the proposed payment by month, a description of the actions an ALE should take if it agrees or disagrees with the proposed employer shared responsibility payment, and the name and contact information of a specific IRS employee that the ALE should contact with questions.

Check Out Our Events!

November 07, 2017

Join Morgan Lewis in November for these programs on a variety of topics in employee benefits and executive compensation:

ABA’s 28th Annual Philadelphia Tax Conference – Employee Benefits: Employment Tax Update| November 1 | Philadelphia | Seminar presented by Mary B. (Handy) Hevener

Joint Committee on Employee Benefits (JBC)—American Bar Association (ABA) Fiduciary Institute 2017 – Special Considerations in Investments Involved with 401(k) Plans | November 6 | Washington, DC | Presentation by Marla J. Kreindler

2017 TEI Mergers & Acquisitions Seminar – Employee Benefits & Compensation| November 7 | Boston | Seminar presented by Patrick Rehfield

TEI Federal Chapter Meeting: Executive Compensation Update | November 9 | New York | Seminar presented by Mary B. (Handy) Hevener, Rosina Barker, Jeanie Cogill, Gina Lauriero, and Jonathan Zimmerman   

Tax Reform: The Devil’s in the Details, Part III of our Morgan Lewis Tax Reform Discussion | November 10 | Webinar presented by Mary B. (Handy) Hevener, Alexander L. Reid, and Jonathan Zimmerman | To learn more about this series, access Part I and Part II

2017 Tennessee Federal Tax Conference – The Incredible Shrinking De Minimis Fringe Benefit | November 17 | Franklin | Seminar presented by Patrick Rehfield

We’d also encourage you to attend the firm’s Public Company Academy series: Morgan Lewis Public Company Academy - Shareholder Activism Defense: What You Need to Know About Advance Notice and Other Bylaw Provisions | November 8

Visit the Morgan Lewis events page for more of our latest programs. 

The San Francisco Office of Labor Standards Enforcement issued final revised rules on September 26 addressing the Health Care Security Ordinance (HCSO) Employer Spending Requirement. The rules are effective October 29.

The HCSO requires employers to spend a minimum amount on health coverage ($2.83 per hour in 2018 for large employers) for their San Francisco employees who regularly work eight or more hours per week.

The past few weeks have been filled with an increasing drumbeat of Affordable Care Act (ACA) developments.

From the US Senate’s second failure to pass a repeal and replace measure to contraceptive mandate revisions and last Thursday’s executive order directing agencies to modify parts of the ACA, and winding up with the end of cost sharing reduction payments to insurers, this has been the most consequential period of ACA developments in years.

While some of these developments may appear to only have an indirect impact on employer group health plans, all of them will play a part in 2018 and beyond in design decisions and administrative steps for employers.

Join us at our upcoming Affordable Care Act: Potential Changes, Likely Effects Webinar October 24 as we review these developments and place them into a framework that will help employers understand the near- and mid-term consequences for their group health plans.

To register for the Webinar, please click here.

On August 22, 2017, the District Court for the District of Columbia determined that recent Equal Employment Opportunity Commission (EEOC) regulations governing wellness program incentives are “arbitrary and capricious,” and remanded the regulations back to the EEOC for further consideration. The ruling is significant because the court determined that the EEOC regulations are too permissive. If the EEOC modifies the regulations, the new regulations will probably give employers less flexibility to provide wellness program incentives.

The EEOC may appeal the decision, and the regulations remain in effect for the time being. In fact, the court acknowledged that vacating the regulations would cause “potentially widespread disruption and confusion” because employers have already designed and implemented wellness incentives in reliance on the new regulations.

Join Morgan Lewis in October for these upcoming programs on a variety of employee benefits and executive compensation topics:

Disruption in Washington: Impact on Benefits and Compensation | October 3 | Philadelphia | Seminar presented by Morgan Lewis and The ERISA Industry Committee (ERIC) | Morgan Lewis panelist is John Ferreira

Morgan Lewis Public Company Academy – Equity Plans | October 4 | Webinar presented by Randall (Randy) McGeorge, Patrick Rehfield, and Mims Maynard Zabriskie

2017 Roundtable for Consultants & Institutional Investors – Successfully Navigating the DC Seas | October 5 | Chicago | Morgan Lewis panelist is Marla Kreindler

Pensions & Investments Annual West Coast Defined Contribution Conference – It’s Process, Process, Process . . . | October 10 | San Diego | Morgan Lewis moderator is Marla Kreindler

Visit the Morgan Lewis events page for more of our latest programs.

As Hurricane Harvey continues to inflict historic devastation in Texas, the Internal Revenue Service (IRS) and US Department of Labor (DOL) have issued guidance for employers, plans, service providers, and participants affected by the storm. Much of the relief outlined in the guidance comes in the form of filing and payment extensions, as well as a general stance on delayed, limited, or non-enforcement for certain compliance failures attributable to Hurricane Harvey.  

The guidance focuses on employee benefit plan compliance for those impacted by the hurricane. With respect to group health plans, the guidance indicates that the DOL’s enforcement approach will focus on compliance assistance and not the issuance of penalties where appropriate. The DOL recognizes that physical disruptions to an employer’s or plan administrator’s place of business may make compliance difficult or impossible for those entities.

On June 16, the US Departments of Labor, Health and Human Services, and Treasury (collectively, the “Departments”) released additional guidance under the Mental Health Parity and Addiction Equity Act (MHPAEA), as amended.

The guidance consists of a frequently asked question (FAQ) and a draft model form to help participants request information from health plans regarding nonquantitative treatment limitations that may affect their mental health or substance use disorder benefits or to obtain documentation to support an appeal after an adverse benefit determination involving such benefits.