Group-Term Life Insurance §79 Nondiscrimination Rules

Question:  Are there nondiscrimination rules that apply to group-term life insurance benefits? Short Answer: Yes, Section 79 imposes nondiscrimination rules that generally require employers to offer non-key employees the same level of coverage as offered to key employees. Section 79 Nondiscrimination: General Rule The nondiscrimination rules that apply to group-term life insurance plans generally require […]

Potential ACA Employer Mandate Penalties for Late Offer of Coverage to New Full-Time Hire

Question:  What are the potential ACA employer mandate penalties for failure to timely offer coverage to a new full-time hire (including a full-time temp or intern)? Compliance Team Response:   Short Answer: The “B Penalty” ($312.50/month in 2019, $321.67/month in 2020) may apply for the failure to timely offer coverage to a new full-time hire. […]

Taxation of Wellness Program Gift Cards

Question:  Are gift card rewards from a wellness program always taxable income to the employee?  Are there any non-taxable alternatives? Short Answer:  Yes, gift cards are always taxable income to employees.  Alternatives include de minimis non-cash-equivalent items or health benefit rewards. General Rule: All Cash or Cash Equivalent Compensation is Taxable Any form of compensation […]

Enrolling New Dependents and Changing Plan Options Under COBRA

Question:  When can COBRA qualified beneficiaries enroll new dependents or change plan options? Short Answer: COBRA qualified beneficiaries can make plan changes upon experiencing HIPAA special enrollment events, moving outside the plan’s regional service area, and during the plan’s open enrollment period. General Rule: Same Coverage as in Effect Upon the Qualifying Event The general […]

ACA Grandfathered Plan Status

Question:  What are the benefits of maintaining ACA grandfathered plan status, and what is required for a plan to preserve grandfathered status? Compliance Team Response:   Short Answer: Outside of fully insured plans in the small group market, there is little reason to maintain ACA grandfathered plan status at this point. Overview of ACA Grandfathered […]

ACA Employer Mandate and Reporting Rules When Acquiring a Non-ALE

Question:  What are the ACA employer mandate and reporting requirements when an ALE acquires a non-ALE that keeps its EIN after the acquisition? Compliance Team Response:   Short Answer: The non-ALE seller becomes subject to the ACA employer mandate and reporting requirements upon the acquisition by the ALE buyer. “Applicable Large Employer” Status Includes Entire […]

Taxation of Gym Reimbursement Arrangements

Question:  What are the tax consequences of an employer’s gym and exercise equipment reimbursement arrangement as part of its broader wellness program?  Short Answer: The general rule is that any employer payment/reimbursement for gym, health club, spa, exercise equipment, or other similar expenses that are intended for general fitness and health is standard taxable income […]

§105(h) Nondiscrimination Rules for Specialty HRAs

Question:  What nondiscrimination rules apply to a specialty HRA (such as an infertility HRA) that an employer would like to make available on different terms to different employee classes? An HRA is a self-insured group health plan, and therefore it is subject to the §105(h) nondiscrimination rules.  This includes specialty HRAs such as infertility HRAs, […]

SF HCSO and Employees Who Waive the Health Plan

Question:  Does the SF HCSO require employers to make City Option contributions for employees who waive a very generous offer of employer-sponsored group health plan coverage? Short Answer:  Yes, employers will still need to contribute quarterly to the City Option on the waived SF employees’ behalf unless an exception applies. City Option Contributions Required: The […]