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2016 Health and Welfare Plan Year-End Action Items

There are a number of health and welfare plan action items to address as 2016 closes and 2017 begins. In addition, many employers are wondering how these action items may be affected by the November election results. We have addressed these action items and the possible effects of the election results in our HB Health and Welfare blog here, including: Affordable Care Act (?Ç£ACA?Ç¥) reporting for 2016 (i.e. Forms 1094/1095) and related issues; Issues that may impact plan design and/or written materials, such as the ACA, recent wellness regulations, and federal agency enforcement activity; and Certain other reporting and communication requirements.

Cadillac Tax Delayed and Made Deductible

The President recently signed into law H.R. 2029, the Consolidated Appropriations Act, 2016 (the ?Ç£Act?Ç¥). Among the numerous changes made by the Act were significant modifications to the ?Ç£Cadillac Plan Tax,?Ç¥ which is a 40 percent excise tax on any excess benefit provided under a ?Ç£high cost?Ç¥ employer sponsored health plan. First, the implementation of this tax has been delayed by two years so that it will not become effective until tax years beginning after December 31, 2019. Second, the tax payment will now be permitted as a deductible business expense. The Act is available?áhere.

PBGC Issues 2016 Premium Payment Instructions

The Pension Benefit Guaranty Corporation (PBGC) recently issued premium payment instructions for 2016. The filing requirements are substantially similar to those required in 2015, but the following are notable changes: (i) for flat-rate premiums ?Çô the per participant flat-rate premium for single employer plans is up from $57 to $64, and for multiemployer plans is up from $26 to $27; (ii) for variable-rate premiums ?Çô the rate per $1,000 of unfunded vested benefits is up from $24 to $30; and (iii) the cap on variable-rate premiums is up from $418 times the number of participants to $500 times the number of participants. A copy of the instructions can be found?áhere.

IRS Releases 2016 Inflation Adjusted Amounts for HSAs and HDHPs

The IRS issued Revenue Procedure 2015-30, which sets the 2016 calendar year limits on (1) annual contributions that can be made to a health savings account (?Ç£HSA?Ç¥) and (2) annual deductibles and out-of-pocket maximums under a high deductible health plan (?Ç£HDHP?Ç¥). The 2016 limit on contributions to an HSA for an individual with self-only coverage under an HDHP remains unchanged at $3,350, whereas the limit for an individual with family coverage under an HDHP is increased from $6,650 to $6,750. The minimum annual deductibles for a plan to qualify as an HDHP in 2016 remain unchanged at $1,300 for self-only coverage and $2,600 for family coverage, whereas the annual out-of-pocket maximums under an HDHP are increased from $6,450 to $6,550 for self-only coverage and from $12,900 to $13,100 for family coverage. Revenue Procedure 2015-30 is available here.

November 2022