Aon Washington Report
January 9, 2017
115th Congress Convenes; Presidential Inauguration Scheduled for January 20, 2017
The presidential inauguration takes place on January 20, 2017, when Donald Trump will be sworn in as the forty-fifth president of the United States. The 115th Congress convened for the first time on January 3, 2017, and presides through January 3, 2019.
House-Passed Midnight Rules Bill Targets Obama Regulations for “En Bloc” Nullification
On January 4, 2017, the House passed H.R. 21, the Midnight Rules Relief Act, which would give Congress the authority to strike down multiple regulations in one joint resolution of disapproval. Under the bill, as many as 61 regulations could be considered and nullified “en bloc.” The bill would amend the Congressional Review Act to allow Congress to apply the expanded nullification procedure to regulations that were submitted for congressional review within the last 60 legislative days of a session of Congress during the final year of a president's term.
H.R. 21 is available here.
House Passes Bill Requiring Congressional Approval of Major Regulations
On January 5, 2017, the House passed a bill, H.R. 26, that would require Congress to vote on and approve any major regulation before it could take effect. The Regulations From the Executive in Need of Scrutiny (REINS) bill would require Congressional approval of regulations that had economic costs of $100 million or more. Furthermore, House consideration of a regulation would be limited to only certain days in each month. REINS has been passed by the House in prior sessions, but not by the Senate.
H.R. 26 is available here
Thirty-Fifth Set of FAQs on Affordable Care Act Now Available
On December 20, 2016, the Departments of Labor, Health and Human Services, and the Treasury released the thirty-fifth set of frequently asked questions (FAQs) on implementation of the Affordable Care Act. The FAQs address:
- Special enrollment for group health plans;
- Coverage of preventive services; and
- Qualified small employer health reimbursement arrangements.
The FAQs are available here.
IRS Releases Proposed Regulations and Notice of Public Hearing on Mortality Tables for Minimum Funding Purposes
On December 28, 2016, the Internal Revenue Service (IRS) released proposed regulations prescribing mortality tables to be used by most private employer defined benefit pension plans. The tables specify the probability of survival year-by-year for an individual based on age, gender, and other factors. The information is used (together with other actuarial assumptions) to calculate the present value of expected future benefit payments for minimum funding purposes. The proposed regulations would also update the requirements that a plan sponsor must meet in order to use plan-specific mortality tables for minimum funding (instead of the generally applicable tables). The proposed regulations do not specifically address the minimum present value requirements for lump-sum distributions. However, the regulations indicate that the IRS will issue such guidance in the Internal Revenue Bulletin once the proposed regulations have been finalized, and that the mortality tables for lump-sum purposes will be based on a modified version of the tables used for minimum funding purposes. The regulations affect participants in, beneficiaries of, employers maintaining, and administrators of certain retirement plans. Comments and outlines of topics to be discussed at the public hearing scheduled for April 13, 2017, must be received by March 29, 2017.
The IRS proposed regulations are available here.
PBGC Updates Early Warning Program Information
On December 21, 2016, the Pension Benefit Guaranty Corporation (PBGC) announced that in an effort to increase transparency about its single-employer Early Warning Program, the agency recently enhanced and reorganized the information available on its website. Under the program, the PBGC works with certain employers to preserve their pension plans and protect the retirement security of their workers and retirees. The updated information can be found on the PBGC’s “Risk Mitigation & Early Warning Program” website. The PBGC also stated it hopes to post a new set of Early Warning Program Frequently Asked Questions (FAQs) in early 2017.
The PBGC announcement is available here.
The "Risk Mitigation & Early Warning Program" website is available here.
PBGC 2017 Premium Filing Instructions Available
The Comprehensive Premium Filing Instructions for 2017 Plan Years issued by the PBGC have been approved by the Office of Management and Budget and are now available on the PBGC’s website. The PBGC has added a chapter to the instructions on the impact of plan mergers and spinoffs on premium requirements.
The filing instructions are available here.
IRS Provides Guidance on De Minimis Safe Harbor
On January 4, 2017, the Internal Revenue Service (IRS) released Notice 2017-09, providing guidance regarding the de minimis error safe harbor from information reporting penalties under Sections 6721 and 6722 of the Internal Revenue Code. The Notice also provides guidance on the payee election to have the safe harbor not apply. The safe harbor, established by Section 202 of the Protecting Americans From Tax Hikes Act of 2015 (PATH Act), provides that no penalty is imposed for de minimis errors on an information return or payee statement and that such return or statement does not need to be corrected. The Notice clarifies that the de minimis error safe harbor does not apply in the case of an intentional error or when a payor fails to file an information return or furnish a payee statement and requires payors to retain certain records. The de minimis safe harbor includes errors on Forms W-2 and 1099 and Affordable Care Act forms, and the Notice applies to returns and payee statements after December 31, 2016.
The IRS seeks comments by April 24, 2017.
IRS Notice 2017-09 is available here
Agencies’ Thirty-Fourth Set of FAQs Address Group Market Reforms and Mental Health Parity
The Departments of the Treasury, Labor, and Health and Human Services (the Agencies) have issued frequently asked questions (FAQs) pertaining to the Affordable Care Act’s group market reform on preventive care and the Mental Health Parity and Addiction Equity Act of 2008. Employers and plan sponsors should review plan designs and administrative operations to ensure compliance with these recent clarifications.
The Aon bulletin, which provides a brief overview of the FAQs, is available here.
Agencies Issue Final Regulations on Excepted Benefits (Travel Insurance and Supplemental Health Insurance) and Amend Definition of Essential Health Benefits
The Agencies issued final regulations addressing when travel insurance and supplemental health insurance constitute excepted benefits. Also contained within these final regulations is an amendment to the definition of essential health benefits for purposes of the Affordable Care Act’s prohibition on annual and lifetime dollar limits.
However, two topics addressed in the proposed regulations—hospital and other fixed indemnity insurance and expatriate health plans—were not adopted in the final regulations. The Agencies intend to address hospital and other fixed indemnity insurance and expatriate health plans in future regulations.
The Aon bulletin, which provides a brief overview of the final regulations, is available here.
Federal Judge Halts Implementation of Section 1557 Nondiscrimination Rules
A federal district judge on December 31, 2016, issued a nationwide preliminary injunction stopping implementation of key nondiscrimination provisions of the Section 1557 regulations issued last year under the Affordable Care Act.
In May of 2016, the Department of Health and Human Services (HHS) issued the Section 1557 regulations, which address nondiscrimination in health programs and activities that receive federal funds. Employers had spent the remainder of 2016 issuing notices required by the 1557 regulations and reviewing their health plans for potential discrimination issues.
The Aon bulletin, which provides a brief overview of the preliminary injunction, is available here.