The Washington Report
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November 13, 2019
Health
CMS Releases 2020 Medicare Parts A and B Premiums and Deductibles
On November 8, 2019, the Centers for Medicare & Medicaid Services (CMS) released the 2020 premiums, deductibles, and coinsurance amounts for the Medicare Part A and Part B programs. For 2020, the Medicare Part B monthly premiums and the annual deductible are higher than the 2019 amounts. The standard monthly premium for Medicare Part B enrollees will be $144.60 for 2020, an increase of $9.10 from $135.50 in 2019. The annual deductible for all Medicare Part B beneficiaries will be $198 in 2020, an increase of $13 from the annual deductible of $185 in 2019.
The Medicare Part A inpatient hospital deductible that beneficiaries will pay when admitted to the hospital will be $1,408 in 2020, an increase of $44 from $1,364 in 2019. The Part A inpatient hospital deductible covers beneficiaries’ share of costs for the first 60 days of Medicare-covered inpatient hospital care in a benefit period. In 2020, beneficiaries must pay a coinsurance amount of $352 per day for the 61st through the 90th day of a hospitalization ($341 in 2019) in a benefit period and $704 per day for lifetime reserve days ($682 in 2019). For beneficiaries in skilled nursing facilities, the daily coinsurance for days 21 through 100 of extended care services in a benefit period will be $176.00 in 2020 ($170.50 in 2019).
The CMS Notice for 2020 Inpatient Hospital Deductible and Hospital and Extended Care Services Coinsurance Amounts is available here. (The rates will be officially published in the November 13, 2019, Federal Register.)
The CMS Notice for 2020 Medicare Part B Monthly Actuarial Rates, Premium Rates, and Annual Deductible is temporarily available here. (The rates will be officially published in the November 13, 2019, Federal Register.)
The CMS fact sheet is available here.
For a more detailed Aon bulletin, please see CMS Releases 2020 Medicare Premiums, Deductibles, and Coinsurance Amounts in the Publications section of this newsletter.
Retirement
IRS 2020 Official Indexed Figures for Retirement Plans and Other Employee Benefit Plans; 401(k) Contribution Limit Increases to $19,500 for 2020
The Internal Revenue Service (IRS) issued Information Release 2019-179 on November 6, 2019, providing the 2020 official indexed figures for retirement plans and other employee benefit plans. The IRS issued technical guidance detailing these items in Notice 2019-59. Following are the official limits of most interest to large and medium employers, as well as the official 2020 key employee pay thresholds for top-heavy plans.
- Section 402(g) annual dollar limit for pretax contributions to Section 401(k), 403(b), and 457 plans: $19,500 (up from 2019 limit of $19,000)
- Section 414(v) annual dollar limit on catch-up contributions for age 50 and over: $6,500 (up from 2019 limit of $6,000)
- Section 414(q) pay threshold for highly compensated employees: $130,000 (up from 2019 limit of $125,000)
- Section 415 limit for defined benefit plans: $230,000 (up from 2019 limit of $225,000)
- Section 415 limit for defined contribution plans: $57,000 (up from 2019 limit of $56,000)
- Section 401(a)(17) recognizable pay limit: $285,000 (up from 2019 limit of $280,000)
- Section 416 pay threshold for key employees in a top-heavy plan: $185,000 (up from 2019 limit of $180,000)
IRS Information Release 2019-179 is available here.
IRS Notice 2019-59 is available here.
For an Aon bulletin on the 2020 indexed figures, please see IRS 2020 Official Indexed Figures for Retirement Plans and Other Employee Benefit Plans in the Publications section of this newsletter.
PBGC Publishes Notice on Changes to Reportable Events and Large Unpaid Contributions Forms and Instructions
On November 5, 2019, the Pension Benefit Guaranty Corporation (PBGC) published a Notice stating that it intends to request Office of Management and Budget (OMB) approval of two changes to ERISA 4043 reportable events forms and instructions (Forms 10 and 200) and that it intends to require, starting in October 2021, that such filings be submitted via PBGC’s e-filing portal (i.e., emailing scanned copies of Forms 10, 10-Advance, and 200 and applicable attachments will no longer be an acceptable way to submit the required information). According to the PBGC, the e-filing portal, available for reportable events filings since 2016, offers a secure application for submitting required information. Comments on the proposed changes are due by January 6, 2020.
The Notice is available here.
Additional information is available here.
Other HR/Employment
IRS Provides Tax Inflation Adjustments for 2020
On November 6, 2019, the Internal Revenue Service (IRS) announced in Revenue Procedure 2019-44 the tax year 2020 annual inflation adjustments for more than 60 tax provisions, including the tax rate schedules and other tax changes. Revenue Procedure 2019-44 provides details about all these annual adjustments. Items that may be of interest to employers are provided below. Please refer to the actual Revenue Procedure for all tax information.
- Qualified Transportation Fringe Benefit: For tax year 2020, the monthly limitation for the qualified transportation fringe benefit is $270, as is the monthly limitation for qualified parking, up from $265 for tax year 2019.
- Health Flexible Spending Arrangements: For the taxable years beginning in 2020, the dollar limitation for employee salary reductions for contributions to health flexible spending arrangements is $2,750, up $50 from the limit for 2019.
- Medical Savings Accounts: For tax year 2020, participants who have self-only coverage in a Medical Savings Account, the plan must have an annual deductible that is not less than $2,350, the same as for tax year 2019; but not more than $3,550, an increase of $50 from tax year 2019. For self-only coverage, the maximum out-of-pocket expense amount is $4,750, up $100 from 2019. For tax year 2020, participants with family coverage, the floor for the annual deductible is $4,750, up from $4,650 in 2019; however, the deductible cannot be more than $7,100, up $100 from the limit for tax year 2019. For family coverage, the out-of-pocket expense limit is $8,650 for tax year 2020, an increase of $100 from tax year 2019.
- Qualified Adoption Expenses: The maximum credit allowed for adoptions is the amount of qualified adoption expenses up to $14,300 for taxable years beginning in 2020, up from $14,080 for 2019.
Information Release 2019-180 is here.
IRS Revenue Procedure 2019-44 is available here.
For an Aon bulletin on the 2020 tax inflation adjustments, please see IRS Publishes Additional 2020 Benefit Limitations in the Publications section of this newsletter.
Aon Publications
CMS Releases 2020 Medicare Premiums, Deductibles, and Coinsurance Amounts
On November 8, 2019, the Centers for Medicare & Medicaid Services (CMS) released the 2020 premiums, deductibles, and coinsurance amounts for the Medicare Part A and Part B programs.
The Aon bulletin, which provides additional details about the 2020 adjustments, is available here.
IRS 2020 Official Indexed Figures for Retirement Plans and Other Employee Benefit Plans
The Internal Revenue Service (IRS) issued Information Release 2019-179 on November 6, 2019, providing the 2020 official indexed figures for retirement plans and other employee benefit plans. The IRS issued technical guidance detailing these items in Notice 2019-59.
The Aon bulletin, which provides the official limits of most interest to large and medium employers, as well as the official 2020 key employee pay thresholds for top-heavy plans, is available here.
IRS Publishes Additional 2020 Benefit Limitations
The IRS issued Revenue Procedure 2019-44 on November 6, 2019, updating the indexed limitations for certain employee benefit programs.
The Aon bulletin, which covers the 2020 tax inflation adjustments to these benefit plans, is available here.