Proposed legislative and regulatory changes in 2018 for sponsors of health and retirement benefits
Federal legislative and regulatory agendas for 2018 are taking shape, and health and rmay limit the number of significant changes in the coming months, but plan sponsors will have plenty to watch in 2018.
Outlook for health and welfare benefits in 2018
Congress has already shaped health policy as part of the government funding legislation passed in January.
It appears, at least for the moment, that comprehensive ACA repeal and replace has fallen from the 2018 legislative priority list. However, several smaller bills have been introduced in Congress that may generate debate this year. We’re most likely to see movement on measures to stabilize the individual health insurance marketplace, but other topics in play include measures to do the following:
- Allow tax-free reimbursement of over-the-counter medications from accounts like health savings accounts (HSAs) and flexible spending accounts.
- Expand use of HSAs, including increased contribution limits and coordination with telemedicine and on-site clinics.
- Provide for streamlined ACA employer mandate reporting.
- Eliminate the ACA employer mandate, or at least delay it.
- Change the ACA definition of full-time employee from 30 hours per week to 40 hours per week.
At least in the near-term, health and welfare plans are more likely to be impacted by action from federal agencies including:
- Finalization of association health plan regulations, which allow employers to form associations solely to save on benefit costs’
- IRS’s issuance of 226J letters enforcing the ACA employer mandate for 2015.
- The EEOC’s response to a federal court striking down its wellness plan regulations beginning in 2019.
- Regulations allowing large employers to pay individual health plan premiums in response to a prior Executive Order.
Outlook for retirement benefits in 2018
Democrats and Republicans often sharply disagree on health policy but are frequently able to find common ground on retirement policy, which makes it more likely we will see bipartisan retirement legislation. Currently there are six different bills in committee, each with significant bipartisan support, which could bring welcomed changes to retirement plans, including:
- Increasing the automatic IRA rollover limit from $5,000 to $7,600.
- Removing required minimum distributions on accounts below $250,000.
- Increasing the required minimum distribution age to 73 with periodic increases.
- Removing the 10 percent cap on automatic increases.
- Simplifying required participant disclosures.
- Making electronic disclosure the default for plans.
- Increasing safe harbor limits.
- Allowing open multiple employer plans where unrelated employers can pool assets in a single plan.
- Providing a safe harbor to satisfy fiduciary duties in selecting an annuity provider.
- Allowing the transfer of an employee’s unused flexible spending account balances directly to a retirement plan.
- Pension Benefit Guaranty Corporation premium reforms.
While none of these proposals will likely make it into law as stand-alone bills, retirement plan changes could easily be added to a larger package focused on infrastructure, immigration or farming.