The Internal Revenue Service (IRS) recently issued guidance that increases the applicable dollar amount used to determine the Patient-Centered Outcomes Research Institute (PCORI) fee, for plan years that end on or after October 1, 2016 and before October 1, 2017.
PCORI fees are imposed on plan sponsors of applicable self-insured health plans for each plan year ending on or after October 1, 2012 and before October 1, 2019. The fees support research to evaluate and compare health outcomes and the clinical effectiveness of certain medical treatments, services, procedures, and drugs.
For plan years ending on or after October 1, 2015 and before October 1, 2016, the fee for an employer sponsoring an applicable self-insured plan was $2.17 multiplied by the average number of lives covered under the plan. Details on how to determine the average number of lives covered under a plan, as well as various examples, are included in final regulations.
Pursuant to IRS Notice 2016-64, for plan years ending on or after October 1, 2016 and before October 1, 2017, the fee is $2.26 (multiplied by the average number of lives covered under the plan).
For plan years ending on or after October 1, 2017 and before October 1, 2019, the fee will be further adjusted to reflect inflation.
A federal judge in Texas has blocked the Department of Labor's (DOL's) new federal overtime rule, which would have raised the Fair Labor Standards Act's (FLSA's) salary threshold for exemption from overtime pay from $23,660 to $47,476.
This is a preliminary injunction and therefore isn't permanent, as it simply preserves the existing overtime rule—which was last updated in 2004—until the court has a chance to review the merits of the case objecting to the revisions to the regulation.
For now, the overtime rule will not take effect as planned on Dec. 1, so employers may continue to follow the existing overtime regulations.
The changes to the overtime rule could still be implemented later down the road. The DOL has already stated "the overtime rule is the result of a comprehensive, inclusive rulemaking process, and we remain confident in the legality of all aspects of the rule," and that they are currently considering all of their legal options.
Employers who have already taken steps to comply, by increasing their exempt employee salaries, or by reclassifying exempt employees whose salary levels did not comply with the new salary threshold to a non-exempt status, will probably want to leave these increases in place.
Employers who have not yet taken steps to comply, can hold off on making any changes, for now. However, employers should not assume that the rule will be permanently barred and should still have a plan to move forward if necessary in the future.
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The IRS has released Notice 2016-70 granting an automatic 30-day extension of the due date for furnishing to individuals the 2016 1095 statements from January 31, 2017 to March 2, 2017. Even though the IRS is granting the extension, they encourage employers and other coverage providers to furnish statements and file the information returns as soon as they are ready.
In addition to the statement relief, the IRS is also providing penalty relief for incorrect or incomplete 2016 1095 forms for employers and providers who can show that they have made a good-faith effort to obtain the information and comply with the reporting requirements. Such information includes missing/inaccurate SSN/TIN’s, dates of birth and other information that is required to be reported on the forms.
The IRS is not providing relief from the deadlines to transmit the 1095 forms to the IRS; those deadlines remain February 28, 2017 for paper filings and March 31, 2017 for electronic filing.
Effective December 1, a new rule updates the regulations governing which executive, administrative, professional, and highly compensated employees are entitled to the minimum wage and overtime pay protections of the federal Fair Labor Standards Act (FLSA).
The current federal rules provide an exemption from both the minimum wage and overtime pay requirements of the FLSA for bona fide executive, administrative, and professional employees who meet certain tests regarding their job duties and who are paid on a salary basis at not less than $455 per week ($23,660 per year). "Highly compensated employees" (HCEs) who are paid total annual compensation of $100,000 or more and meet certain other conditions are also deemed exempt.
The new rule updates the salary and compensation levels needed for executive, administrative, professional, and highly compensated employees to be exempt. In particular, the final rule:
Note: When both the FLSA and a state law apply, the employee is entitled to the most favorable provisions of each law.
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Source: HR 360, Inc.
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