On October 3, 2018, the IRS issued transitional guidance in Notice 2018-76 concerning the business expense deductions for meals and entertainment following the changes made by the Tax Cuts and Jobs Act (“TCJA”) — which generally disallowed a deduction for expenses related to entertainment, amusement or recreation, but did not specifically address the deductibility of
Financial Conflict of Interest in the Eighth Circuit: Trigger of a Less Deferential Standard of Review or Mere Factor in Determining Plan Administrator Abuse of Discretion?
It is well-established under the Employee Retirement Income Security Act of 1974 (“ERISA”) that when an employee benefit plan grants the plan administrator discretion to decide questions of eligibility for benefits or to construe plan terms, judicial review of the plan administrator’s denial of benefits is generally limited to the deferential abuse of discretion standard
2018 Tax Reform Series: Goodbye to the Individual Mandate
This is the seventh article in our series covering various tax and employee benefits-related changes contained in the Tax Cuts and Jobs Act signed by the President on December 22, 2017.
Once significant change made by the Act, summarized below, is the elimination of the Affordable Care Act’s individual mandate, effective 2019.
Background
Long an
Employer Health Plan Premiums Rose in 2016, But Just Barely
Premiums for Affordable Care Act (ACA) marketplace coverage continue to sky rocket, with the average cost of a benchmark plan in the individual market place rising 20% this year. There is very different news for employer-sponsored plans. According to the nonprofit Kaiser Family Foundation, in 2016 annual family premiums rose on average a modest 3%
401(k) and 403(b) Plan Hardship Distribution Substantiation: What Will the IRS Be Looking For?
On February 23 and March 7, 2017, the Internal Revenue Service (“IRS”) issued memoranda to examination agents addressing review of substantiation provided in support of safe harbor hardship distributions under 401(k) and 403(b) plans. Although the memoranda cannot be relied upon as official guidance, they are good reference points to help plan sponsors and third
Are You Down With O.O.P.s?: Opt-Out Payments Under the Affordable Care Act
In Notice 2015-87, the IRS addressed the impact of employer opt-out payments — payments made to employees who decline enrollment in an employer’s group health plan — on affordability for ACA purposes. Employers who do not offer group health coverage that is affordable as defined under the ACA risk significant penalties. For 2016, group
SUPREME COURT REBUKES NINTH CIRCUIT’S DISREGARD OF PRUDENCE PRECEDENT FOR EMPLOYEE STOCK OWNERSHIP PLANS
For the second time in Amgen Inc. v. Harris, the Supreme Court reversed the Ninth Circuit because of its failure to apply the proper pleading standard for claims alleging breach of the duty of prudence against fiduciaries who manage employee stock ownership plans (ESOPs). The Supreme Court’s opinion sets forth a specific, stringent pleading
Late-Breaking Benefits News for 2016
While taxpayers were completing their holiday shopping and preparing to spend time with their families, Congress and the Internal Revenue Service (“IRS”) were busy changing laws governing employee benefit plans and issuing new guidance under the Patient Protection and Affordable Care Act (“ACA”). The results of that year-end governmental activity include the following:
Protecting Americans
ACA Cadillac Tax: Cruising Toward Proposed Regulations
Background
Effective 2018, Section 4980I of the IRC — the so-called “Cadillac Tax,” which was added to the IRC by the ACA — will impose a 40% nondeductible excise tax on the aggregate cost of applicable employer-sponsored health coverage that exceeds an annually-adjusted statutory dollar limit. For 2018, the dollar limits are $10,200 for self-only
Section 529A Qualified ABLE Programs: Tax-Favored Savings Vehicle for Disabled Individuals
First effective in 2015, the federal Achieving a Better Life Experience (ABLE) Act created Internal Revenue Code section 529A qualified ABLE programs, which provide a means of tax-favored savings for disabled individuals.
Section 529A qualified ABLE programs are modeled on Section 529 qualified tuition programs and must be implemented by individual states. States that have