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2017 Health and Welfare Plan Year-End Action Items

The following is a list of action health and welfare plan action items that should be addressed by plan administrators for the end of 2017 and start of the 2018 plan year. Please note that for non-calendar year plans, the specific timing requirements described below may vary.

  • Employer shared responsibility provisions under the Affordable Care Act (ACA):
    • Determine applicable large employer/applicable large employer member status for 2018.
    • Determine whether any changes will be made to the measurement process for 2018 such as a change in method (e.g., monthly versus look-back), changes to period duration if the look-back measurement method is used, or other variations among permissible employee categories under the employer shared responsibility provisions. Update employer measurement policy as needed.
    • Ensure minimum essential coverage will be offered to at least 95 percent of ACA full-time employees for each month during 2018 to avoid potential Internal Revenue Code (IRC) Section 4980H(a) penalty (projected to be $2,320 per ACA full-time employee; 30 full-time employees may be excluded from the penalty calculation).
    • Complete Forms 1095-C and distribute to applicable employees by January 31, 2018. Provide Form 1095-C to other individuals if Form 1095-C is used in lieu of available alternative Form 1095-B (e.g., self-insured coverage provided to ex-spouse who was never an employee). For cause extensions are available for forms distributed to individuals.
    • Forms Series 1094/1095 must be filed with the IRS by April 2, 2018 for electronic filers (February 28, 2018 if filed by paper). Both automatic and for cause extensions are available for the IRS filings.
  • Issues potentially affecting plan design and/or written plan materials:
    • Reflect any changes in eligibility as a result of compliance with the ACA?ÇÖs employer shared responsibility provisions and employee measurement. The affordability safe harbor percentage has been reduced to 9.56 percent for 2018.
    • Under the ACA, large group insured and self-insured plans that have annual or lifetime dollar limits on benefits must define ?Ç£essential health benefits?Ç¥ in a manner consistent with one of the three largest Federal Employees Health Benefit Program options or a State benchmark plan. Employers may wish to review the 2017 State benchmark plans to help determine their best option(s) for 2018.
    • Non-grandfathered group health plans must incorporate additional preventive services including screening services for depression and tuberculosis, breastfeeding support, and statin medication. Additional Preventive Services Recommendations will apply to non-calendar year plans during 2018, as recommendations are generally effective for plan years beginning one year after the month that the recommendation is issued. Employers interested in claiming a full or partial exemption or accommodation from providing women?ÇÖs contraceptive services through a plan on religious or moral grounds should review the available guidance.
    • Plan administrators should review their wellness programs and revise as necessary to comply with applicable law, including the wellness rules under the Health Insurance Portability and Accountability Act, the Americans with Disabilities Act (ADA), and the Genetic Information Nondiscrimination Act (GINA). A federal court ordered the EEOC to review its ADA and GINA wellness rules, but the court did not suspend the rules which currently remain in effect. Please see our earlier alert discussing this order.
    • The U.S. Dept. of Labor continues to focus on parity issues related to non-quantitative treatment limitations under the Mental Health Parity and Addiction Equity Act (MHPAEA). Plan administrators should continue to review whether the group health plan?ÇÖs administrative procedures for receiving mental health/substance abuse benefits and services comply with the MHPAEA.
    • New disability claims and appeals regulations are scheduled to take effect for claims beginning on or after January 1, 2018, although the Department of Labor has proposed a delay until April 1, 2018. Please see our earlier discussion of plans that may be affected by these new rules.
    • Plan administrators must determine whether to amend the employee health care FSA contribution limit to $2,650 for 2018. The annual HSA contribution limits for self-only and family coverage also increase to $3,450 and $6,900, respectively. The HSA catch-up contribution limit remains at $1,000.
    • Plan administrators must ensure that non-grandfathered medical plan coverage satisfies the ACA?ÇÖs out-of-pocket maximum limit requirements for 2018 ($7,350 self-only/$14,700 family). Plan administrators must ensure that high deductible health plan coverage satisfies the out-of-pocket maximum limit requirements for 2018 ($6,650 self-only/$13,300 family).
    • Other amendments or revisions should be made as necessary to reflect changes in plan design, eligibility, and/or administration.
  • Complete and distribute Forms W-2 by January 31, 2018:
    • Ensure Forms W-2 correctly reflect appropriate cost of group health coverage for ACA purposes in Box 12 using Code DD.
    • Ensure Forms W-2 correctly reflect HSA contributions in Box 12 using Code W, if any.
  • Distribute Summary Annual Report(s) (assumes Form 5500 extension filed).
  • A revised Summary of Benefits and Coverage applies beginning with the first open enrollment period beginning on or after April 1, 2017.

In addition to the items listed above, please note that additional changes to health and welfare plans may be necessary as a result of ongoing changes to applicable law.

The lawyers of our Employee Benefits and Executive Compensation Practice Group are readily able to assist companies on a nationwide basis with implementing sophisticated benefit plans and providing answers to their most challenging compensation issues. Additionally, our lawyers are well aware of the daily employee benefits challenges facing companies of all sizes and are capable of helping in-house lawyers and human resources personnel with the day-to-day advice and guidance necessary to properly administer employee benefits plans.

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November 2017