Retirement and Health & Welfare Plan Sponsors: Reminders of What's New in 2018
October 13, 2017
Plan sponsors of retirement, health and welfare plans have a relatively short list of changes in the employee benefits arena that begin on or around January 1, 2018. However, some changes were announced so long ago, they would be easy to forget. Here’s a compilation.
For sponsors of ERISA-governed employee benefits plans
The Department of Labor’s (DOL) delayed fiduciary rule generally became effective June 9, 2017. It includes extensive changes to the definition of a "fiduciary" applicable to both individual retirement accounts (IRAs) and ERISA-governed plans. In concert with the DOL’s May 2017 announcement that the rule would no longer be delayed, the DOL issued Field Assistance Bulletin No. 2017-02 (FAB) entitled “Temporary Enforcement Policy on Fiduciary Duty Rule” and “Conflict of Interest FAQs (Transition Period)” (FAQs) to reflect and flesh out the phased implementation period from June 9, 2017 to January 1, 2018. On August 31, 2017, the DOL proposed to further extend the Transition Period to July 1, 2019. Pending final action on that proposal, full compliance with the fiduciary duty rule, including all conditions necessary to rely on listed exemptions, will be required on and after January 1, 2018. For a more detailed description of the fiduciary rule, see our June 2017 article here, which provides links to earlier articles on the same topic.
For sponsors of welfare plans and retirement plans that provide disability benefits
In December 2016, the DOL issued a final rule that amends the claims procedure regulation for disability benefits claims. The new rule gives disability benefit claimants the same level of procedural protections that group health benefit claimants have after the enactment of the Affordable Care Act. The new requirements aim to protect disability claimants from conflicts of interest, ensure claimants have an opportunity to respond to evidence and reasoning behind adverse determinations, and increase transparency in claims processing. In general, the final rule’s new requirements are applicable to disability claims made on and after January 1, 2018. For a more detailed description of the new procedures, see our January 2017 article here.
UPDATE – The DOL has proposed a 90 day delay on these rules. Plan sponsors will need to keep their eyes open on future developments.
For sponsors of retirement plans
The Internal Revenue Service (IRS) issued Revenue Procedure 2017-41 in June 2017. It makes significant changes to the IRS’ opinion letter program for preapproved retirement plans, including increasing the types of plans eligible for preapproved status, affording greater flexibility in the design of preapproved plans and eliminating the distinction between master and prototype and volume submitter plans. In conjunction with the Revenue Procedure, the IRS issued the 2017 Cumulative List, which lists changes to the qualification requirements that are required to be taken into account in preapproved defined contribution plans that are submitted for opinion letters during the third six-year remedial amendment cycle. The third cycle for preapproved plans begins October 2, 2017 and ends on October 1, 2018. Revenue Procedure 2017-41 is effective October 2, 2017. For a more detailed description of the new opinion letter program, see our July 2017 article here.
For sponsors of health plans
In another reminder that the Affordable Care Act (ACA) is still the law of the land, for many plan sponsors, it is time to revisit their ACA-required Summary of Benefits and Coverage (SBC). However, the “visit” will require some work. For the first time since 2012, the SBC’s template has been revised. The DOL issued a new template, along with almost 20 pages of explanation and instruction, for use in open enrollment periods beginning on or after April 1, 2017. For calendar year health plans, open enrollment for the 2018 plan year begins soon. Remember that while insurance carriers or third party administrators may provide the SBC, plan sponsors are ultimately responsible for the accuracy of the SBC and its distribution. For more on the new SBC template, see the DOL’s guidance here.
For sponsors of “high deductible health plans” (HDHPs)
In May 2017, the IRS announced in Revenue Procedure 2017-37 the 2018 limits for contributions to Health Savings Accounts (HSAs) and definitional limits for HDHPs. These inflation adjustments are provided for under applicable law. Unlike last year’s single change, almost all limits for the 2018 calendar year were increased. For a more detailed description of the increases, see our May 2017 article here.
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