In light of the recent economic developments stemming from the COVID-19 pandemic, many employers are evaluating their employee benefit plans and how employee and employer costs will be impacted. The following summary provides a list of questions we have been receiving from clients over the past week, along with action items to help employers address these issues. Health and Welfare Plans and Fringe Benefits Should benefits coverage continue while an employee is on an unpaid furlough? If so, how would the employee pay the employee?ÇÖs portion of the premium? Could the employee elect to drop coverage due to the reduction in hours of active service? Could the employer pay for coverage for some or all of its furloughed employees? Continued eligibility for benefits will depend on whether the employer treats the furlough as a termination of employment or as an unpaid leave of absence. The terms of the plan, including… Continue Reading
The IRS recently issued Revenue Procedure 2019-25, which sets the 2020 calendar year limits on (i) annual contributions that can be made to a health savings account (?Ç£HSA?Ç¥) and (ii) annual deductibles and out-of-pocket maximums under a high deductible health plan (?Ç£HDHP?Ç¥). The 2020 limits are as follows: Annual HSA contribution limits: $3,550 for self-only coverage ($50 increase from 2019); $7,100 for family coverage ($100 increase from 2019) Minimum HDHP deductibles: $1,400 for self-only coverage ($50 increase from 2019); $2,800 for family coverage ($100 increase from 2019) HDHP out-of-pocket maximum limits: $6,900 for self-only coverage ($150 increase from 2019); $13,800 for family coverage ($300 increase from 2019) View Rev. Proc. 2019-25.
The DOL?ÇÖs final fiduciary rule (the ?Ç£Final Rule?Ç¥) went into effect on June 9, 2017 after several delays. The Final Rule clarifies when a person who provides investment advice becomes a fiduciary to a plan for purposes of ERISA and the Internal Revenue Code. Under the Final Rule, the term ?Ç£plan?Ç¥ explicitly includes health savings accounts (?Ç£HSAs?Ç¥). While employers typically have little direct HSA involvement beyond engaging an HSA service provider (e.g., a trustee or custodian) and forwarding payroll contributions, the Final Rule does raise issues for employers to consider: Employers should review the products and services offered by their HSA service provider to HSA participants and determine if the service provider is a fiduciary as defined in the Final Rule. If applicable, the employer should consider including an affirmative acknowledgement in its HSA provider services agreement to the effect that such provider is a fiduciary under the Final Rule… Continue Reading
The IRS announced the 2017 inflation adjusted amounts for a high deductible health plan (?Ç£HDHP?Ç¥) and health savings account (?Ç£HSA?Ç¥) contribution limits in Revenue Procedure 2016-28, as follows: Minimum HDHP deductibles ?Çô $1,300 self-only; $2,600 family (no changes from 2016) HDHP out-of-pocket maximum limits ?Çô $6,550 self-only; $13,100 family (no changes from 2016) Annual HSA contribution limits ?Çô $3,400 self-only; $6,750 family ($50 increase for self-only; no change to family contribution limit from 2016) Revenue Procedure 2016-28 is available here.