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IRS Issues Guidance Regarding Retroactive Increase in Excludible Transit Benefits

The recently enacted Consolidated Appropriations Act, 2016 retroactively increased the 2015 limit on the monthly exclusion from income for employer-provided transit and vanpooling benefits under Section 132(f)(2)(A) of the Internal Revenue Code from $130 to $250. The IRS published Notice 2016-6 on January 11, 2016, to (1) clarify how the retroactive increase applies for 2015 and (2) provide a special administrative procedure for employers who over-withheld income taxes and FICA taxes on transit benefits provided during any quarter of 2015 and who want to make corrections on the fourth-quarter 2015 Form 941 (Employer?ÇÖs Quarterly Federal Tax Return) (which is due February 1, 2016). Notice 2016-6 is available?áhere.

Court Rules Against EEOC in Wellness Case Brought under the ADA

The EEOC brought civil actions against three separate employers (Orion Energy Systems, Inc.; Flambeau, Inc.; and Honeywell International, Inc.) in 2014 for alleged violations of the Americans with Disabilities Act (?Ç£ADA?Ç¥) by their wellness programs. On December 30, 2015, a federal district court in Wisconsin ruled in EEOC v. Flambeau, Inc. that Flambeau?ÇÖs requirement for employees to complete a health risk assessment and biometric screening in order to be eligible to enroll in the employer?ÇÖs group medical plan fit within the ADA?ÇÖs bona fide benefit plan safe harbor because it was a term of the plan for purposes of underwriting, classifying, and administering risk. The court determined the wellness program could be construed as part of the plan since it was a condition of enrollment, despite the fact that the wellness program was not described in the plan?ÇÖs summary plan description. The application of the safe harbor was similar to… Continue Reading

Additional Guidance Regarding Determination Letter Program Changes

Effective January 1, 2017, the five-year remedial amendment cycle for individually designed plans under the IRS determination letter program will be eliminated. The IRS recently announced additional revisions to the determination letter program in anticipation of this elimination. Controlled groups and affiliated service groups that previously made a Cycle A election are permitted to submit determination letter applications during the Cycle A submission period ending January 31, 2017; expiration dates on determination letters issued prior to January 4, 2016 are no longer operative; and employers that want to convert an existing individually designed plan into a defined contribution pre-approved plan and apply, if otherwise permissible, for a determination letter may do so between January 1, 2016 and April 30, 2017. Notice 2016-03 can be found?áhere.

IRS Extends Affordable Care Act Reporting Deadlines

The IRS recently released Notice 2016-4, which extends the deadlines for filing certain information reporting returns required under the Affordable Care Act. In particular, the due date for employers to furnish Forms 1095-C to individuals to report employer-provided minimum essential coverage (and offers of such coverage) has been extended from February 1, 2016 to March 31, 2016. Similarly, the deadline for insurers (and self-insured employers with fewer than 50 full-time employees) to provide Forms 1095-B to individuals receiving minimum essential coverage has been extended to March 31, 2016. Furthermore, the deadline for submitting the required transmittal forms to the IRS (i.e., Form 1094-C for employers and Form 1094-B for insurers and small self-insured employers) has been extended from March 31, 2016 to June 30, 2016 (if filing electronically) and from February 29, 2016 to May 31, 2016 (if not filing electronically). Notice 2016-4 is available?áhere.

Recovering Insurance Proceeds for Tornado Loss and Damage: Five Tips for Maximizing Coverage

On December 26, 2015, a series of tornadoes and severe storms caused significant injuries and property damage across seven states, including Texas. In Garland and Rowlett, northeast of Dallas, wreckage from businesses and homes, trees, power lines, cars and other debris litter the streets for miles. Apart from the personal devastation felt by affected individuals, the economic cost of these storms, measured in lost revenue and replacement expense, may collectively amount to billions of dollars.?áFor those unfamiliar with pursuing significant insurance claims, it is important to seek professional advice before having substantive discussions with insurance carriers and adjusters. The terms of individual commercial or residential policies may contain complicated provisions, and coverage may be compromised by a failure to understand or comply with policy terms. In particular, as communities seek to recover from these destructive storms, commercial and residential policyholders should be familiar with the terms of their individual policies… Continue Reading

January 2016