Aon Washington Report
January 23, 2017
President’s Order Directs Executive Branch to Halt or Delay Affordable Care Act Implementation
On January 20, 2017, President Trump issued an Executive Order that directs the heads of executive departments and agencies with responsibilities under the Affordable Care Act, including the Secretary of Health and Human Services, to use their authority to waive, defer, or delay the implementation of a potentially broad array of provisions under the Affordable Care Act “to the maximum extent permitted by law.” Among the provisions would be any requirement imposing a “tax, penalty, or regulatory burden” on individuals, insurers, and others. The Order also directs the departments and agencies to use their authority to provide greater flexibility to states and to encourage the development of an open interstate healthcare and health insurance market. For more information, see the Aon bulletin, President Trump Issues Executive Order on Affordable Care Act, in the Aon Publications section of this newsletter.
The Executive Order is available here.
Employers Could Fund QMACs and QNECs With Plan Forfeitures Under IRS Proposed Regulations
In a change welcome to employers, the Internal Revenue Service (IRS) issued proposed regulations on January 17, 2017, that would allow employers to use money in plan forfeiture accounts to fund qualified matching contributions (QMACs) and qualified nonelective contributions (QNECs) in 401(k) plans. The regulations are proposed to be effective for taxable years beginning on or after the date on which final regulations are published. While the proposed regulations indicate that they may be relied upon before their effective date, the recent regulatory freeze issued by President Trump would suggest that reliance be delayed until such time as the scope of the regulatory freeze is clarified. (More information on the regulatory freeze appears below.)
Current regulations require QMACs and QNECs to satisfy nonforfeitability and distribution requirements at the time they are first contributed to the plan, which has effectively prevented the use of plan forfeitures to fund QMACs and QNECs. The IRS’s proposed amendments to the regulations would instead require that QMACs and QNECs satisfy nonforfeitability and distribution requirements at the time they are allocated to participants’ accounts.
Comments on the proposed regulations and requests for a public hearing are due by April 18, 2017.
The proposed regulations are available here.
Other HR-Related Topics
President Orders Regulatory Freeze
On January 20, 2017, President Trump ordered a regulatory freeze. As of January 20, 2017, no regulations are to be sent to the Office of the Federal Register (OFR) until they have been reviewed and approved by presidential appointees or designees. The heads of executive departments and agencies are directed to immediately withdraw for review and approval regulations that were already sent to the OFR but not yet published. The effective dates of non-critical regulations that have been already published but which have not yet taken effect are to be postponed by the executive departments and agencies for 60 days or longer.
A White House memorandum on the regulatory freeze is available here.
President Trump Issues Executive Order on Affordable Care Act
On January 20, 2017, President Donald Trump signed an Executive Order directing all executive departments and agencies with authority under the Affordable Care Act to delay the Affordable Care Act’s implementation and waive or grant exemptions from any “cost, fee, tax, penalty, or regulatory burden” under the Affordable Care Act. The Executive Order directs the departments and agencies to act “to the maximum extent permitted by law.”
The Aon bulletin, which summaries the Executive Order, is available here.
Now Available: Aon Compliance Calendar - Significant Compensation and Benefit Due Dates for 2017
Aon is pleased to present its 2017 Compliance Calendar to help plan sponsors identify significant compensation and benefit due dates for retirement and health and welfare plans. This Compliance Calendar includes relevant dates involving plan disclosures, contribution and distribution requirements, and various plan-related regulatory filings.
This Compliance Calendar assumes a plan administered on a calendar year basis by an employer with a calendar fiscal year. In general, the information for pension plans applies to single employer plans; other plans, such as multiemployer plans (e.g.,Taft-Hartley plans) or government plans, may be subject to different requirements, and are not included. Additionally, certain compliance dates related to group health plan coverage or retiree prescription drug coverage have been included where applicable.
The Compliance Calendar is intended to alert the reader to some of the more significant dates for 2017 and is not intended to identify all compliance obligations or due dates. The due date column serves as an alert of a filing deadline so that plan sponsors have the opportunity to confirm their individual filing due date(s) with their advisors. Therefore, the due date column indicates the general rule; however, if the required due date falls on a weekend or legal holiday, the Compliance Calendar lists, as the due date, the business day immediately preceding the weekend or legal holiday (except when an outside limit applies to how far in advance disclosures can be provided). Further, the information contained in this Compliance Calendar is subject to change due to the ongoing release of additional or clarifying legislative or regulatory guidance by the Internal Revenue Service, Department of Labor, or other regulatory agencies throughout the year. Aon is not a law firm, and the contents of this Compliance Calendar are not intended to replace or supersede the advice of legal counsel. This information provides only general guidance, and not all rules and requirements are reflected.
The 2017 Aon Compliance Calendar is available here.
Departments’ Thirty-Fifth Set of FAQs Addresses Preventive Services, HIPAA Special Enrollments, and Small Employer HRAs
The Departments of the Treasury, Labor, and Health and Human Services (the Departments) issued their thirty-fifth set of frequently asked questions (FAQs), this set pertaining to preventive care under the Affordable Care Act, HIPAA special enrollments, and small employer health reimbursement arrangements (HRAs). 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.