Human Resources
The Washington Report - 1/10/2018

The Washington Report

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January 10, 2018

As a reminder, The Washington Report will be published on Wednesdays in 2018. We look forward to keeping you informed this year!


DOL Releases Proposed Regulations Expanding AHPs

On January 4, 2018, the Department of Labor (DOL) released proposed regulations which would “expand the opportunity to offer employment-based health insurance to small businesses through small business health plans, also known as Association Health Plans" (AHPs). The regulations would broaden the criteria under ERISA Section 3(5) for determining when employers may join together in an employer group or association that is treated as the "employer" sponsor of a single multiple-employer "employee welfare benefit plan" and "group health plan" as those terms are defined in Title I of ERISA. By treating the AHP as the employer sponsor of a single plan, the regulations would facilitate the adoption and administration of such arrangements. The regulations would modify the definition of “employer,” in part, by creating a more flexible “commonality of interest” test for the employer members than the DOL had adopted in subregulatory interpretive rulings under ERISA Section 3(5). At the same time, the regulations would continue to distinguish employment-based plans, the focal point of Title I of ERISA, from commercial insurance programs and administrative service arrangements marketed to employers.

For purposes of Title I of ERISA, the proposed regulations would also permit working owners of an incorporated or unincorporated trade or business, including partners in a partnership, to elect to act as employers for purposes of participating in an employer group or association sponsoring a health plan, and also to be treated as employees with respect to a trade, business, or partnership for purposes of being covered by the employer group's or association's health plan. The proposed regulations would affect such AHPs, health coverage under these health plans, groups and associations of employers sponsoring such plans, participants and beneficiaries with health coverage under these plans, health insurance issuers, and purchasers of health insurance not purchased through AHPs.

Comments on the proposed regulations are due by March 6, 2018.

The proposed regulations are available here.

The news release is available here.


PBGC 2018 Premium Filing Instructions Now Available

On January 8, 2018, the Pension Benefit Guaranty Corporation (PBGC) announced that the "Comprehensive Premium Filing Instructions for 2018 Plan Years" have been approved by the Office of Management and Budget and are now available on the PBGC's website. The instructions include a new section with the most common premium filing mistakes. In addition, the agency has expanded the examples of how to determine premiums in a year when a plan is involved with a spinoff, merger, or consolidation. The PBGC stated that My Plan Administration Account (My PAA) will be ready to accept 2018 filings in the very near future.

The "Comprehensive Premium Filing Instructions for 2018 Plan Years" is available here.

IRS Releases Updated Compensation Tables for 2018

On January 8, 2018, the Internal Revenue Service (IRS) issued updated compensation tables for 2018 (Revenue Ruling 2018-04). This Revenue Ruling provides tables of covered compensation under Section 401(l)(5)(E) of the Internal Revenue Code for the 2018 plan year. These covered compensation tables reflect a revision to the taxable wage base for 2018 that was announced by the Social Security Administration on November 27, 2017, and replace the tables that were provided in Revenue Ruling 2017-22.

IRS Revenue Ruling 2018-04 is available here.

PBGC Publishes Final Rule on Missing Participants Program

On December 22, 2017, the PBGC published a final rule expanding and updating its existing Missing Participants Program. Under the final rule, plan sponsors that terminate 401(k) and other defined contribution plans can turn to the PBGC for help in distributing plan benefits to missing participants.

In addition to defined contribution plans, the expanded program now covers terminated PBGC-insured multiemployer plans and non-insured defined benefit plans sponsored by professional service organizations. The final rule also makes improvements to the PBGC's Missing Participants Program for PBGC-insured single-employer plans. “PBGC’s expanded Missing Participants Program addresses an important problem and meets the needs of our stakeholders,” said PBGC Director Tom Reeder. “We look forward to working with employers, practitioners, and participants to help connect people to their retirement benefits.”

The final rule becomes effective January 22, 2018, for plan terminations on or after January 1, 2018, or for multi-employer plans, plan closeouts on or after January 1, 2018.

The PBGC final rule is available here.

The news release is available here.

Aon Publications

Federal Judge Vacates EEOC’s ADA and GINA Rules for Employer Wellness Plans Starting in 2019

A federal district court has vacated the U.S. Equal Employment Opportunity Commission’s (EEOC’s) final regulations on permissible financial incentives for employee wellness programs under the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA). The court’s ruling is effective January 1, 2019.

The district court’s ruling does not affect the wellness regulations under HIPAA, which are similar to the ADA and GINA regulations in some (but not all) respects. While the ADA and GINA rules on wellness program incentives remain in effect for 2018, employers will not be able to rely on these regulations when designing wellness programs for 2019. Once the ADA and GINA regulations are no longer effective, employers will face the challenge of designing ADA- and GINA-compliant wellness programs, which often include financial incentives for taking a health risk assessment or biometric screening, without definitive regulatory guidance on permissible financial incentives under these laws.

This bulletin:

  • Provides background on the issue;
  • Summarizes the court’s most recent decision; and
  • Describes the impact on employers.

This Aon bulletin is available here.

IRS Gives a Last-Minute Holiday Gift; Extends Some Form 1095 Deadlines

On December 22, 2017, the Internal Revenue Service (IRS) published Notice 2018-06, which provides an automatic 30-day extension for furnishing Forms 1095-B and 1095-C to individuals, extending the deadline to March 2, 2018. The IRS will also continue to provide penalty relief for those filers who make errors but demonstrate good faith efforts to comply with the requirements. Like last year, the IRS warns that this is the last such extension, and that the extensions will not apply for the next filing year.

This Aon bulletin is available here.

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