Compliance News | December 18, 2019
Late on December 16, 2019, Congress released the text of legislation approved by negotiators to keep the federal government funded past the current deadline of December 20, 2019. This legislation, which is in two bills, passed the House of Representatives today, December 17. It now heads to the Senate where it is also expected to pass. President Trump is expected to sign the bill into law before December 20.
One of the two bills (HR 1865) contains important provisions affecting employee benefit plans.
This bill would permanently repeal three taxes included in the Affordable Care Act (ACA):
Under the bill, the excise tax on high-cost health plans, which was scheduled to go into effect January 1, 2022, would never take effect. The health insurance tax was suspended for 2019, but would be in effect for 2020, as currently scheduled, and repealed after that. The medical device tax has been suspended but was scheduled to be reinstated in 2020.
The bill would also reauthorize funding for the Patient-Centered Outcomes Research Institute (PCORI) for another 10 years, thus requiring self-insured group health plans and health insurers to continue to pay fees to fund this institute. Under the ACA as enacted, fees would not have been owed for plan years ending after September 30, 2019. This bill changes “2019” to “2029,” extending the requirement to pay these fees for another 10 years. For example, calendar-year plans would have to pay fees for the 2019 plan year by the usual deadline (i.e., by July 31, 2020). For 2018, the fee was $2.45 per covered life, and that amount would continue to be indexed under rules set in the ACA.
The legislation includes the long-awaited pension bill, the Setting Every Community Up for Retirement Enhancement (SECURE) Act. The SECURE Act passed the House on May 23, 2019 by a 417-3 vote but was held up in the Senate. The SECURE Act makes numerous changes to the Internal Revenue Code and the Employee Retirement Income Security Act (ERISA) to encourage savings. Among other changes, it would:
The bill provides relief to the United Mine Workers of America (UMWA) pension plan by transferring funds from the coal fund under Section 402 of the Surface Mining Control and Reclamation Act of 1977. The bill also increases the amount transferred to the UMWA health fund from the coal fund.
The bill does not address the concerns of other multiemployer funds or the Pension Benefit Guaranty Corporation’s multiemployer fund.
This page is for informational purposes only and does not constitute legal, tax or investment advice. You are encouraged to discuss the issues raised here with your legal, tax and other advisors before determining how the issues apply to your specific situations.
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