Aon Hewitt Washington Report
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November 6, 2017
Legislative
House Approves CHIP Bill
On November 3, 2017, the House passed with a 242–174 vote a bill (H.R. 3922—Community Health and Medical Professionals Improve Our Nation Act of 2017) that would extend funding for the Children’s Health Insurance Program (CHIP) for five years. Among other provisions, the bill would also provide Medicaid funding for Puerto Rico and the Virgin Islands, due to the aftermath of recent hurricanes. The bill moves to the Senate, where passage is uncertain.
The full text of H.R. 3922 is available here.
Health
IRS Publishes Notice on Qualified Small Employer Health Reimbursement Arrangements
On October 31, 2017, the Internal Revenue Service (IRS) published Notice 2017-67, which provides guidance on the requirements for providing a qualified small employer health reimbursement arrangement under Section 9831(d) (added to the Internal Revenue Code by the 21st Century Cures Act), the tax consequences of the arrangement, and the requirements for providing written notice of the arrangement to eligible employees.
IRS Notice 2017-67 is available here.
HHS Releases Notice of Benefit and Payment Parameters for 2019
On October 27, 2017, the Department of Health and Human Services’ (HHS) Centers for Medicare and Medicaid Services released proposed regulations setting forth payment parameters and provisions related to the risk-adjustment and risk-adjustment data validation programs; cost-sharing parameters and cost-sharing reductions; and user fees for federally facilitated Exchanges and state-based Exchanges on the federal platform, as required by the Affordable Care Act. The guidance proposes changes that would enhance the role of states as related to essential health benefits and qualified health plan certification, and would provide states with additional flexibility in the operation and establishment of Exchanges, including the Small Business Health Options Program (SHOP) Exchanges. The regulations include proposed changes to standards related to Exchanges; the required functions of the SHOPs; actuarial value for stand-alone dental plans; the rate review program; the medical loss ratio program; eligibility and enrollment; exemptions; and other related topics. Comments on the proposed regulations are due by November 27, 2017.
The HHS proposed regulations are available here.
Retirement
PBGC Posts Table on Present Value of Maximum Guarantee
On November 1, 2017, the Pension Benefit Guaranty Corporation (PBGC) posted a table showing the applicable present values for 2018 plan years. New for this year, the PBGC also published a two-column version of the table for copying.
The PBGC table is available here.
IRS Updates 2018 Factor for Adjusting Compensation Limit Under Code Section 415(b)(1)(B)
On October 27, 2017, the Internal Revenue Service (IRS) revised a factor in its annual cost-of-living adjustments for tax year 2018. The factor, which is used in adjusting a participant’s high-three compensation limit under Code Section 415(b)(1)(B) for plan years beginning on or after January 1, 2018, was raised to 1.0197. The IRS made the change in response to adjustments made by the Bureau of Labor Statistics to the Consumer Price Index for All Urban Consumers. The IRS has already updated this factor amount in Notice 2017-64, which it originally issued on October 19, 2017.
IRS Information Release 2017-177, updated with the new factor, is available here.
IRS Notice 2017-64, updated with the new factor, is available here.
Disaster Relief
IRS Issues Relief for Victims of Hurricane Maria and California Wildfires
On October 31, 2017, the Internal Revenue Service (IRS) issued Announcement 2017-15, which provides relief to victims of Hurricane Maria and the recent California wildfires. The relief allows easier access to funds held in workplace retirement plans and in IRAs, for the period beginning September or October 2017 and ending March 15, 2018. The relief provided in Announcement 2017-15 is in addition to the relief already provided by the IRS pursuant to News Releases CA-2017-06, VI-2017-02, and PR-2017-02.
IRS Announcement 2017-15 is available here.
Aon Hewitt Publications
2018 Limits for Benefit Plans
Each year, the U.S. government adjusts the limits for retirement plans, Social Security, Medicare, and other benefit programs to reflect price and wage inflation, and changes in the law. As a result, employee benefit plans must be adapted annually to accommodate the new limits. All of the numbers in this report are official unless otherwise indicated.
The 2018 Limits for Benefit Plans document is available here.