The Washington Report
September 25, 2024
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 Updates FAQs for Premium Tax Credit
On September 19, 2024, the Internal Revenue Service (IRS) updated its Frequently Asked Questions (FAQs) in Fact Sheet 2024-30 for the Premium Tax Credit. These FAQs supersede earlier FAQs that were posted in Fact Sheet 2024-04 on February 9, 2024. The latest revision is under the Affordability of Employer Coverage for Employees and for Family Members of Employees section, specifically Q11, to provide the required contribution percentage for determining whether employer coverage is considered affordable for plan years beginning in 2025. The revision is based on Revenue Procedure 2024-35.
IRS Fact Sheet 2024-30 is available here.
IRS Fact Sheet 2024-04 (February 9, 2024) is available here.
Other HR/Employment
DOL Launches Webpage Marking 50th Anniversary of ERISA
On September 16, 2024, the Department of Labor (DOL) announced the launch of a webpage (ERISA at 50: Celebrating EBSA), that marks the 50th anniversary of ERISA. The webpage “traces the history of ERISA and its protections of the health, retirement savings, and other benefits plans of America’s workers. It also details how the Department’s Employee Benefits Security Administration (EBSA) assists retirement plan beneficiaries and their families in claiming their benefits or reporting violations.” In addition to other resources, the webpage includes information on how to connect with EBSA benefits advisors for help with questions about benefits and claims.
The news release is available here.
The ERISA at 50: Celebrating EBSA, webpage is available here.
Aon Publications
IRS Private Letter Ruling Allows Employees to Allocate Employer 401(k)
Under a private letter ruling (PLR) published by the Internal Revenue Service (IRS) (PLR 202434006), an employer sponsor of a 401(k) plan was permitted to amend the plan to give employees the option to allocate the employer’s 401(k) contribution among several pre-tax health and welfare benefits offered by the employer. The alternative allocations offered to 401(k) participants included:
- A health savings account;
- A retiree health reimbursement arrangement; and
- An educational assistance program for the payment of student loans.
This Aon bulletin discusses the design of the amended 401(k) plan and the limits on the application of the PLR that employers should take into account when considering similar designs.
The Aon bulletin is available here.
DOL Issues Cybersecurity Guidance for Employer Health Plans
The U.S. Department of Labor (DOL) has issued cybersecurity tips and best practices for plan sponsors and plan fiduciaries of health and welfare plans. The DOL had provided this same guidance for retirement plans in 2021. While the guidance does not require fiduciaries to implement specific safeguards or processes, it outlines how the DOL expects fiduciaries to safeguard health and welfare plan participants’ information.
Sponsors of ERISA plans should consider this guidance as setting the cybersecurity standards for potential DOL enforcement and plan participants’ disputes. Non-ERISA plans, such as governmental and church plans, may consider this guidance as potential standards for state-law claims based on fiduciary duty, confidentiality, and employee data requirements.
The DOL released three cybersecurity briefs for health plans and retirement plans:
- Cybersecurity Program Best Practices;
- Tips for Hiring a Service Provider With Strong Cybersecurity Practices; and
- Online Security Tips.
The Aon bulletin is available here.