Updated deferred compensation and benefit limits for 2019
The IRS released the limits for 2019 on November 1, 2018, later than usual. Click here to see the table of benefits.
Relief for plan sponsors after recent hurricanes
The Department of Labor has issued some relief for plans in the wake of hurricanes Florence and Michael. Read the DOL’s press release and get more details here.
401(k) matching for student loan repayments.
In this private letter ruling, the IRS approved an innovative idea: allow employer nonelective 401(k) contributions to participants who do not defer any salary into their 401(k) but who do make student loan repayments. In its request, the company explained that it makes employer contributions of 5% to participants who elect to defer at least 2% of their salary to their 401(k). It proposed to amend its plan to allow the same 5% employer contributions for participants who make student loan repayments of at least 2% – even if those participants do not defer any salary under the 401(k) plan. This could be a great way for employers to help employees address burdensome student loan debt and prepare for retirement at the same time. As always, the devil is in the details, so be sure to talk to your benefits counsel before making a change.
Updated limits for deferred compensation and certain welfare plans.
The IRS has updated some important limits related to employee benefits. Click here to read more and see the table of benefits.
Expanded EMAC payments.
Massachusetts employers face an increased tax and the possibility of additional assessments if their employees sign up for MassHealth or subsidized ConnectorCare coverage. Read our summary here.
Department of Labor further delays implementation of the fiduciary rule.
The DOL has finalized new regulations that significantly delay the full implementation of its new fiduciary rule. The fiduciary rule went into effect on June 9, 2017, and includes a transition period to phase in some of the rule’s effects. Under the new final regulations, this transition period – originally scheduled to end on January 1, 2018 – will instead end 18 months later, on July 1, 2019. The delay affects the Best Interest Contract Exemption (“BIC Exemption”), the Principal Transactions Exemption and certain amendments to the Prohibited Transaction Exemption 84-24. (You can read about the delayed rules here.)
Final disability claims regulations delayed 90 days.
The Department of Labor is putting a 90-day hold on the applicability date of the new claims procedures for ERISA plans, through April 1, 2018. This delay affects the final regulations that were published on December 19, 2016, which required plans to, among other things, provide claimants an opportunity to review and respond to any new information or rationales before a final decision is made and to expand on the information provided to claimants. The delay means the DOL may be considering revising – or perhaps even revoking – the new regulations.
You can read the announcement here.
ACA tax updates: the IRS is preparing to enforce employer shared-responsibility penalties.
Check out this newly-updated IRS Q&A– questions 55 through 58 – and this form IRS letter. By the end of 2017, the IRS plans to send out letters to employers who may owe 2015 “pay or play” penalties. The letter (what the IRS is labeling “letter 226J”) will indicate the assessment amount the IRS proposes, and will include a list of any employees who qualified for a tax credit on the ACA exchange and who did not receive an offer of “affordable” coverage, month by month. Employers will generally have 30 days to respond. If you receive this letter, get in touch with your benefits counsel immediately! If you do not timely respond to the letter, the IRS will assess the penalty and issue a demand for payment.