The Washington Report
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October 25, 2023
Note to Subscribers
While we do our best to provide timely updates, it is possible that the information shared in the newsletter may change after our publication deadline.
Health
IRS Releases Text of 2023 Instructions for IRS Forms 1094-B/C and 1095-B/C
On October 19, 2023, the Internal Revenue Service (IRS) posted the 2023 Instructions for the following health coverage forms on its website:
- Form 1094-B Transmittal of Health Coverage Information Returns;
- Form 1095-B Health Coverage;
- Form 1094-C Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns; and
- Form 1095-C Employer-Provided Health Insurance Offer and Coverage.
The text of the 2023 Instructions for IRS Forms 1094-B and 1095-B is available here.
The text of the 2023 Instructions for IRS Forms 1094-C and 1095-C is available here.
IRS Releases Adjusted Applicable Dollar Amount Determining PCORTF Fee
On October 18, 2023, the IRS released Notice 2023-70, which provides that the adjusted applicable dollar amount that applies for determining the Patient-Centered Outcomes Research Trust Fund (PCORTF) fee (also referred to as the “Patient-Centered Outcomes Research Institute (PCORI)” fee) for policy years and plan years ending on or after October 1, 2023, and before October 1, 2024, is $3.22. (Notice 2022-59 provided that the adjusted applicable dollar amount for policy years and plan years ending on or after October 1, 2022, and before October 1, 2023, was $3.00.)
The increase is calculated after adjustment to reflect updates to the data used to calculate the prior applicable dollar amount, $3.00, which was based on the per capita amounts of National Health Expenditures for 2022 and 2023 published by the Department of Health and Human Services on March 24, 2022.
For more information, see the Aon bulletin, IRS Issues Adjusted PCORI Fee for Plan Sponsors, in the Publications section of the newsletter.
IRS Notice 2023-70 is available here.
Retirement
IRS Releases Mortality Table for Use in Determining Minimum Present Value for 2024
On October 19, 2023, the Internal Revenue Service (IRS) released Notice 2023-73, which provides the 2024 mortality table for minimum present value calculations under Code Section 417(e), which is based on the 2024 mortality tables for minimum funding purposes.
IRS Notice 2023-73 is available here.
IRS Releases Final Regulations on Mortality Tables for Determining Present Value Under Defined Benefit Pension Plans
On October 19, 2023, the IRS issued final regulations updating the mortality tables used for minimum funding purposes under Code Section 430. The regulations also apply for purposes of calculating current liability for multiemployer plans under Code Section 431 and Cooperative and Small Employer Charity plans under Code Section 433. The tables specify the probability of survival year-by-year for an individual based on age, gender, and other factors. The tables are used (together with other actuarial assumptions) to calculate the present value of a stream of expected future benefit payments for purposes of determining the minimum funding requirements for the plan. These mortality tables are also relevant for determining the minimum required amount of a lump-sum distribution from such a plan. The final regulations require most plans to use a fully generational mortality projection for minimum funding purposes (rather than static tables), do not allow the use of collar-adjusted tables, and do not change the prescribed mortality tables for disabled lives. These regulations affect participants in, beneficiaries of, employers maintaining, and administrators of certain defined benefit pension plans. The final regulations became effective on October 20, 2023.
The final regulations are available here.
IRS Releases Proposed Regulations on Plan-Specific Substitute Mortality Tables for Determining Present Value
In addition to the final regulations released on October 19, the IRS also released proposed regulations regarding the use of substitute mortality tables based on plan-specific experience. Early termination of the use of a previously approved substitute mortality table would not be required before the proposed regulations are finalized and an updated Revenue Procedure on filing for approval for use of a substitute mortality table has been issued. The regulations are proposed to be effective for plan years beginning on or after January 1, 2025. These regulations would affect participants in, beneficiaries of, employers maintaining, and administrators of certain retirement plans. Comments on the proposed regulations must be received by December 19, 2023.
The proposed regulations are available here.
PBGC Posts 2024 Maximum Monthly Guarantee Limits
On October 17, 2023, the Pension Benefit Guaranty Corporation (PBGC) posted a table showing the 2024 guarantee limits for various ages and payment forms. As a result of the indexing rules provided by law, the maximum guarantee limits for single-employer plans that fail in 2024 will be 5.30% higher than the limits that applied for 2023.The guarantee limits for multiemployer plans are not indexed and have not changed.
The PBGC announcement is available here.
The table with the 2024 Maximum Monthly Guarantee Limits is available here.
Aon Publications
IRS Issues Adjusted PCORI Fee for Plan Sponsors
On October 18, 2023, the Internal Revenue Service (IRS) issued Notice 2023-70 announcing the applicable Patient-Centered Outcomes Research Institute (PCORI) fee for plan years that end on or after October 1, 2023, and before October 1, 2024 (e.g., the applicable PCORI fee for 2023 calendar year plans).
The Aon bulletin is available here.