Archives: Benefits Excise Taxes

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Severance Agreements for Executives at Tax-Exempt Organizations:  Beware Unintended Consequences of Excise Taxes, Early Inclusion, and Intermediate Sanctions

When it’s time for tax-exempt organizations such as colleges/universities, museums, and hospital systems to part ways with their senior executives, these institutions are most often considering how to best transition these executives off into the sunset rather than a morass of special tax rules (I will mention Internal Revenue Code citations just once for reference) … Continue Reading

New Interim Guidance for Tax-Exempt Organizations Paying Excess Executive Compensation

As we previously reported, under the Tax Cuts and Jobs Act, starting in 2018, tax-exempt organizations are subject to a 21% excise tax on (i) remuneration exceeding $1 million paid to a “covered employee” in a tax year, and (ii) any “excess parachute payment” paid to a covered employee.  The IRS has recently published Notice … Continue Reading

Premium Reimbursement Arrangements – Part Deux

Last November, Melissa Ostrower wrote an excellent blog on the perils of employers reimbursing employees for health care premiums. (See: https://www.benefitslawadvisor.com/2014/11/articles/health-care-reform-legislation/premium-reimbursement-arrangements-employers-beware/)   At the time of her article, the Department of Labor had just published a new FAQ which stated, in general, that where an employer provides cash reimbursements to employees for the purchase of an … Continue Reading

Is Your Health Plan Affordable? If You Offer an Opt-Out Payment, You Better Check Again

An “applicable large employer” is subject to a penalty if either (1) the employer fails to offer to its full-time employees (and their dependents) the opportunity to enroll in minimum essential coverage (MEC) under an eligible employer-sponsored plan and any full-time employee obtains a subsidy for health coverage on a government exchange (Section 4980H(a) liability) … Continue Reading

Premium Reimbursement Arrangements – Employers Beware

The Department of Labor (DOL) has just published a series of FAQs regarding premium reimbursement arrangements.  Specifically, the FAQs address the following arrangements: An arrangement in which an employer offers an employee cash to reimburse the purchase of an individual market policy. Where an employer provides cash reimbursement for the purchase of an individual market … Continue Reading

Dueling Decisions in the 4th and D.C. Circuit Courts of Appeals Spell More ACA Uncertainty for Employers

Just as employers are gearing up to prepare for compliance with the Shared Responsibility rules under the ACA, a pair of decisions from two federal appeals courts has thrown a curve ball into what was already a complicated assessment of risk for employers and raised new questions. The U.S. Court of Appeals for the District … Continue Reading

Dealing with 100% Excise Tax on Late Employer Contributions to Underfunded Multiemployer Plans Face 100% Excise Tax

The Pension Protection Act of 2006 (“PPA”) created certain funding classifications for multiemployer pension plans. Seriously underfunded plans are classified as either “critical” (“red zone”) or endangered (“yellow zone”). Plans that fall in between these two levels are considered “seriously endangered” (“orange zone”) plans. Such plans must send participating employers a notice about the plan’s … Continue Reading
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