United States: Benefits Counselor January 2017

Upcoming Health Plan Compliance Deadlines and Reminders

  1. ACA Information Reporting
    1. Furnish Forms 1095 B and 1095 C to Participants. Plan sponsors of self funded health plans and applicable large employers ("ALEs") must provide copies of the Form 1095 B or 1095 C to participants or employees by March 2, 2017. Internal Revenue Service ("IRS") Notice 2016 70 automatically extended this deadline from the general January 31 deadline. According to its updated Questions and Answers about Information Reporting by Employers on Form 1094 C and Form 1095 C, the IRS does not intend to grant additional extensions for providing the Forms 1095 B and 1095 C to participants and employees.
    2. File Forms with IRS. Plan sponsors and ALEs must file the transmittal Forms 1094 B and 1094 C with their corresponding Form 1095 with the IRS by February 28, 2017 (March 31, 2017 if e filing). Unlike the deadline for furnishing Forms 1095 B and 1095 C to participants or employees, the deadline for filing information returns with the IRS was not automatically extended. However, the normal extensions may still apply.
    3. New Q&As on ACA Reporting and Employer Shared Responsibility. In December, the IRS updated three Affordable Care Act ("ACA") Tax Provisions Questions and Answers for employers. These Q&As, titled "Employer Shared Responsibility," "Information Reporting by Employers on Forms 1094-C and 1095-C," and "Information Reporting of Offers of Health Insurance Coverage by Employers (Section 6056)," can provide guidance on employers' questions about ACA information reporting requirements and shared responsibility provisions.
  2. Privacy Notice for Wellness Programs. Plan sponsors of wellness programs that use health risk assessments or medical exams and tests must distribute a privacy notice in 2017 describing what information will be collected as part of the wellness program, who will receive it, how it will be used and how it will be kept confidential. The notice is required for plan years beginning on or after January 1, 2017. Plan sponsors should ensure that the notice is distributed before the wellness program collects information for the new plan year.

Upcoming Retirement Plan Compliance Deadlines and Reminders

  1. Determination Letter Filing.
    1. Sponsors of individually designed Cycle A3 plans must submit their final five year remedial amendment determination letter applications to the IRS by January 31, 2017. Cycle A3 plans are those sponsored by employers with tax identification numbers ending in one or six, and certain plans sponsored by a controlled group or affiliated service group.
    2. Effective January 1, 2017, the IRS terminated the staggered five year remedial amendment cycle system for all other individually designed plans. Sponsors of individually designed plans may now submit determination letter applications only for initial plan qualification, qualification upon plan termination or as the IRS otherwise determines.
  2. Form 1099-R. By January 31, 2017, plan sponsors must send a Form 1099 R to participants who received distributions during the previous year. Sponsors must file the Form 1099 R with the IRS by February 28, 2017 (March 31, 2017 if e filing).
  3. Corrective Distributions for Failed ADP/ACP Test.Plan sponsors of plans that failed the actual deferral percentage or actual contribution percentage tests must make corrective contributions by March 15, 2017 to avoid the 10% excise tax. If the plan has an eligible automatic contribution arrangement, the deadline is June 30, 2017.

Retirement Plan Developments

ERISA Plan Sponsors May Exercise Shareholder Rights, Including Proxy Voting

On December 29, 2016, the Department of Labor ("DOL") issued guidance setting forth the DOL's supplemental views on the Employee Retirement Income Security Act of 1974's ("ERISA") prudence and exclusive purpose requirements as they relate to proxy voting, exercise of shareholder rights and investment policies. Interpretive Bulletin ("IB") 2016 1 largely revives a prior interpretive bulletin, IB 94 2, and withdraws IB 2008 2, which the DOL cited as causing an incorrect belief that plan sponsors could not exercise shareholder rights without performing a cost benefit analysis and concluding for each case that the action is more likely than not to increase the plan's investments. In contrast, IB 2016 1 encourages fiduciaries to exercise their shareholder rights, including proxy voting, as long as they meet ERISA's prudence and exclusive purpose requirements. IB 2016 1 differs from IB 94 2 in providing updated examples of how monitoring or communication with management will likely increase the value of the plan's investment.

Proposed Mortality Tables for Defined Benefit Plans Affect Minimum Funding and Payout Costs

On December 29, 2016, the IRS issued proposed regulations updating the mortality tables that defined benefit plans use to calculate the present value of benefits and funding. The mortality tables would be effective for plan years beginning on or after January 1, 2018. The updated tables reflect longer life expectancies, and correspondingly are expected to increase minimum funding and lump sum payout costs. However, the proposed regulations would also relax the requirements for plan sponsors to use custom mortality tables for minimum funding purposes.

Seventh Circuit: Multiemployer Plan May Collect Contributions after Union Decertified

The Seventh Circuit Court of Appeals recently ruled in Midwest Operating Engineers Welfare Fund v. Cleveland Quarry that multiemployer welfare and pension funds (the "Funds") could continue to collect contributions from an employer under collective bargaining agreements set to expire in 2015, even though union members decertified the union responsible for the collective bargaining agreements in 2013. The Funds sued for delinquent contributions under ERISA when the employer stopped contributing to the Funds following the union's decertification. The court reasoned that the Funds could enforce the employer's obligation to contribute under the collective bargaining agreement as third party beneficiaries, regardless of the union's decertification and attendant inability to enforce the agreement. The court found that the agreement did not terminate until it expired, as scheduled, in 2015, and so the Funds had a continuing right to collect contributions as third-party beneficiaries until that time.

PBGC May Examine Credit and Cash Flow for Early Warning Program

The Pension Benefit Guaranty Corporation ("PBGC") recently updated guidance on its website regarding what events may trigger an inquiry under its Early Warning Program. The agency website now identifies "significant credit deterioration" and "a downward trend in cash flow or other financial factors" as being trends that may increase agency concern that a plan is at risk. However, the PBGC states it has always reviewed a plan sponsor's credit and cash flow as part of the program.

Defined Benefit Plans with Option to End Current Annuity Stream for Lump-Sum Payment Face Additional Determination Letter Application Requirements

Defined benefit plans that request determination letters must now identify whether the plan has lump sum risk transfer language in either the cover letter to their application or an attachment. Affected plans include those that allow participants that receive annuity payments to receive a lump sum in lieu of the future annuity payments. Plans that include such language should identify the plan section and whether the plan satisfies one of the conditions in Notice 2015 49. The IRS may then approve the risk transfer language in the determination letter.

Treasury Approves First MPRA Application

On December 16, 2016, the Treasury approved the first application to reduce benefits under the Multiemployer Pension Reform Act of 2014 ("MPRA") for the Iron Workers Local 17 Pension Fund. MPRA permits trustees of underfunded multiemployer pension plans to reduce benefits to participants under limited circumstances. The Treasury's approval of the Iron Workers Local 17 MPRA application may provide guidance to other plans seeking approval for their own MPRA applications.

DOL Finalizes Regulations on State Savings Programs for Private Sector Workers

The DOL recently issued final regulations that would allow qualified political subdivisions of states to establish government-run payroll deduction savings programs for private sector workers. The final regulations follow similar regulations for states issued in August 2016. States and qualified political subdivisions may now follow the regulations' safe harbor rules to reduce the risk of ERISA preemption.

IRS Releases 2016 Required Amendments List for Qualified Retirement Plans

The IRS released its Required Amendments List for 2016 in IRS Notice 2016 80, which will be published annually. The 2016 Required Amendments List includes one change in qualification requirements that may require an amendment for some plans: collectively bargained defined benefit plans may need an amendment to reflect restrictions on accelerated distributions from underfunded single-employer plans in employer bankruptcy under Internal Revenue Code ("Code") section 436. Affected sponsors must adopt any necessary amendments by December 31, 2018.

This first Required Amendments List provides insight into how the IRS will help plans ensure that they continue to be qualified following the IRS's downsizing of the determination letter program. This year's Required Amendments List states that the annual list will include statutory and administrative changes in qualification requirements that are first effective during the plan year in which the list is published. Plan sponsors must make any necessary amendments by the end of the second calendar year that begins after the IRS issues the Required Amendments List. This period may be extended for a governmental plan. The Required Amendments List also specifies that plan sponsors should treat periodic changes to dollar limits adjusted for cost of living increases, spot segment rates for determining the Code section 417(e)(3) applicable interest rate, and the Code section 417(e)(3) applicable mortality table as included in the Required Amendments List for the year in which the changes are effective, even though they are not directly referenced on such Required Amendments List.

Health and Welfare Plan Developments

District Court Injunction Prevents Enforcement of ACA Section 1557 Gender Identity and Termination of Pregnancy Nondiscrimination Requirements

Following a federal district court's nationwide injunction, the Department of Health and Human Services ("HHS") cannot enforce the ACA's "gender identity" and "termination of pregnancy" nondiscrimination requirements. Reinhart reviewed the injunction and its implications for plans in more detail in our " Nationwide Injunction of Select ACA Nondiscrimination Requirements" e-alert . All other aspects of the ACA section 1557 regulations, and other laws prohibiting discrimination, continue to apply.

DOL Issues Final Rule on Apprenticeship Equal Employment Opportunity

On December 16, 2016, the DOL finalized regulations updating equal employment opportunity and affirmative action program requirements for sponsors of apprenticeship programs registered with the DOL or a State Apprenticeship Agency. The equal employment opportunity regulations for apprenticeship programs were last updated in 1978.

The regulations are generally effective January 18, 2017, with certain requirements taking effect at various later dates. New requirements include:

  • adding age (40 and older), genetic information, sexual orientation and disability to the list of bases upon which a sponsor of a registered apprenticeship program must not discriminate, and clarifying that sex discrimination includes discrimination based on gender identity and pregnancy;
  • updating equal opportunity standards applicable to all sponsors;
  • revising affirmative action plan requirements, including five specific required elements for an affirmative action program and reviewing personnel processes; and
  • updating utilization analyses for race, sex, and ethnicity, and adding utilization goals for individuals with disabilities.

Additional MHPAEA Compliance and Stand-Alone HRAs Allowed Under Cures Act

On December 13, 2016, President Obama signed the 21st Century Cures Act (the "Cures Act") into law. Although primarily concerned with appropriating funds for biomedical research, the Cures Act also has several provisions regarding the Mental Health Parity and Addiction Equity Act ("MHPAEA") compliance for health and welfare plans. First, the Cures Act instructs federal agencies to issue additional guidance related to compliance with the MHPAEA. Second, the Cures Act requires audits of plans with five or more MHPAEA violations, but the law does not clarify how the "five times" will be defined and interpreted. Finally, the Cures Act clarifies that if plans cover eating disorder treatment, the treatment (including residential treatment) must comply with MHPAEA.

The Cures Act also allows small employers to sponsor stand-alone health reimbursement arrangements ("HRA"), which guidance under the ACA from the IRS and the DOL previously disallowed. Eligible small employers include those with fewer than 50 full-time employees or full-time equivalents that do not sponsor a group health plan. These new HRAs, named "qualified small employer health reimbursement arrangements," or QSEHRAs, allow reimbursement for qualified out-of-pocket medical expenses and nongroup health plan premiums, including premiums for plans purchased through an ACA Marketplace. However, employees with HRAs, including QSEHRAs, may lose eligibility for ACA tax credits.

HHS Updates Cost-Sharing Limits for 2018

On December 22, 2016, HHS set the maximum annual limitation on cost sharing limits at $7,350 for individual coverage and $14,700 for family coverage for 2018. The limits were $7,150 and $14,300, respectively, for 2017. Plans should continue to follow present law, but be alert to changes to health care reform under the 115th Congress and the new administration.

General Developments

ERISA Plans with Disability Benefits Must Revise Claims and Appeals Procedures

On December 16, 2016, the DOL issued final regulations on claims and appeals procedures for ERISA plans that provide disability benefits. Reinhart reviewed the regulations in more detail in our " Department of Labor Issues Final Regulations on Disability Claims and Appeals Procedures" e-alert . In summary, the final regulations require plans, plan fiduciaries, and insurance providers for pension and health plans to comply with additional procedural protections for disability claims. The final rule is effective for disability claims filed on or after January 1, 2018, regardless of the plan year. The regulations do not apply to plans that rely on a finding of disability by a third party for purposes other than making a benefit determination. For example, plans that rely on a determination by the Social Security Administration or the employer's long-term disability plan are exempt from the regulations. Pension and grandfathered health plans may face more significant compliance burdens than their nongrandfathered group health plan counterparts, which likely already implemented similar claims and appeals procedures for health claims under the ACA.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Reinhart Boerner Van Deuren s.c.
Reinhart Boerner Van Deuren s.c.
Reinhart Boerner Van Deuren s.c.
Reinhart Boerner Van Deuren s.c.
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Reinhart Boerner Van Deuren s.c.
Reinhart Boerner Van Deuren s.c.
Reinhart Boerner Van Deuren s.c.
Reinhart Boerner Van Deuren s.c.
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions