2017 HSA Contribution Limits and Minimum Deductibles
The IRS has released the 2017 inflation adjusted amounts for health savings accounts (HSAs). To be eligible to make HSA contributions, an individual must be covered under a high deductible health plan (HDHP) and meet certain other eligibility requirements. High Deductible Health Plan Coverage An HDHP has a higher annual deductible than typical health plans and a maximum limit on the sum of the annual deductible and other out-of-pocket expenses. For 2017, the minimum annual deductible is $1,300 for self-only coverage or $2,600 for family coverage. Annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) may not exceed $6,550 for self-only coverage or $13,100 for family coverage. Annual HSA Contribution Limitation An eligible employee, his or her employer, or both may contribute to the employee’s HSA. For calendar year 2017, the annual limitation on HSA deductions for an individual with self-only HDHP coverage is $3,400. For an individual with family coverage under an HDHP, the annual limitation on HSA deductions is $6,750. The limit is increased by $1,000 for eligible individuals age 55 or older at the end of the tax year. You can learn more about HSAs in our section on Health Savings Accounts.
Upcoming Deadlines for Employers to File ACA Information Returns With the IRS
Employers subject to the new Affordable Care Act (ACA) information reporting requirements are reminded that the deadlines for filing the first ACA information returns with the IRS for the 2015 calendar year are quickly approaching. The due dates are as follows:
- Applicable large employers (ALEs)–generally those with 50 or more full-time employees, including full-time equivalents–must file Forms 1094-C and 1095-C with the IRS no later than May 31, 2016 (or June 30, 2016, if filing electronically).
- Self-insuring employers that are not considered ALEs, and other parties that provide minimum essential health coverage, must file Forms 1094-B and 1095-B with the IRS no later than May 31, 2016 (or June 30, 2016, if filing electronically).
The ACA information returns are used to report certain information to the IRS about the health care coverage offered to employees and other covered individuals (as applicable). Affected employers were also required to furnish employee/individual statements, on or before March 31, 2016, that included the same information provided to the IRS. Be sure to review our Information Reporting section for more information, guidance, and Q&As.
Updated FMLA Poster Now Available
The U.S. Department of Labor (DOL) has released an updated version of the “Employee Rights Under the Family and Medical Leave Act” poster (often referred to as the “General FMLA Notice”), along with a new guide to help employers comply with the law. Employers may use either the new April 2016 version of the poster or the prior February 2013 version of the poster to fulfill their FMLA posting requirements. Background The federal FMLA provides eligible employees of covered employers (including private sector employers who employ 50 or more employees for at least 20 workweeks in the current or preceding calendar year) with unpaid, job-protected leave for specified family and medical reasons. The law also includes certain family military leave entitlements. Employers are required to maintain group health insurance coverage for an employee on FMLA leave on the same terms as if the employee continued to work. Updated FMLA Poster Every employer covered by the FMLA is required to display a poster prepared by the DOL which summarizes the major provisions of the law. The poster must be displayed in a conspicuous place where employees and applicants can see it, even if there are no employees eligible for FMLA leave. An April 2016 version of the required FMLA poster is now available for employers; however, the February 2013 version of the FMLA poster is still valid and can be used to fulfill the posting requirement. If a covered employer has any eligible employees, it must also provide the general notice to each employee by including it in employee handbooks or other written guidance concerning employee benefits or leave rights, if such written materials exist (otherwise, the employer may distribute a copy of the general notice to each new employee upon hire). New Employer’s Guide A new employer’s guide was also released, which is designed to provide information about employers’ obligations under the law and their options in administering FMLA leave. The guide contains resources such as charts, examples, and citations for further information. Our section on the Family and Medical Leave Act includes additional FMLA forms and notices for use by employers.
3 Things for Employers to Know About Vacation Leave
With summer just around the corner, now is a great time to review existing vacation leave policies. Here are three things employers need to know about vacation leave:
1. Vacation leave is not required under federal law. While vacation days are a common employer-provided benefit, federal law generally does not require either time off or pay for vacation. However, if an employer decides to offer vacation leave to its employees, the policy should be applied fairly and uniformly.
2. State laws may apply to pay in lieu of earned vacation. In addition to allowing employees annual time off for vacation, employers also commonly provide pay in lieu of vacation time that employees have earned. A number of states require employers to pay employees for unused accrued vacation upon termination. Contact your state labor department for guidance on your state’s laws regarding vacation pay.
3. Vacation policies should be in writing and communicated to employees. It is very important for employers to develop a clear, written policy regarding paid vacation leave and follow it exactly. Non-written leave policies can lead to inconsistency and complaints from confused employees, as well as claims of discrimination. At a minimum, the policy should include:
· The categories of employees who are eligible to accrue and use paid vacation leave;
· The amount of paid vacation leave provided each year and how leave is earned;
· Whether paid vacation leave can be carried over from year to year; and
· Whether employees will be paid for unused vacation leave upon termination of employment (in compliance with any state law requirements).
Check out our section on Leave and Time Off to learn more about federal and state-mandated leave requirements, as well as common types of employer-provided voluntary time off.
New Versions of SBC Template and Related Documents Finalized
Federal agencies have finalized new versions of the summary of benefits and coverage (SBC) template, instructions, uniform glossary, and related documents, which are authorized for use on or after April 1, 2017. Under the Affordable Care Act, group health plans and health insurance issuers are generally required to provide a written SBC to plan participants and beneficiaries at specified times during the enrollment process and upon request. Changes to SBC Template The new SBC template includes an additional coverage example as well as language and terms to improve individuals’ understanding of their health coverage. Specifically, the new template includes more information about cost-sharing, such as enhanced language to explain deductibles, and requires plans to address individual and overall out-of-pocket limits. Changes have also been made to the SBC to improve readability. Date for Using Updated Template and Related Documents The implementation date for using the new SBC template and associated materials will be as follows:
- Health plans and issuers that maintain an annual open enrollment period will be required to use the new editions beginning on the first day of the first open enrollment period that begins on or after April 1, 2017 with respect to coverage for plan years beginning on or after that date.
- Health plans and issuers that do not use an annual open enrollment period will be required to use the new editions beginning on the first day of the first plan year that begins on or after April 1, 2017.
Additional information can be found in our Summary of Benefits and Coverage (SBC) section.
Newsletter provided by:
Summit Insurance Advisors 11350 McCormick Road, Executive Plaza III,, Hunt Valley, MD 21031 (410) 584-9600
Please Note: The information and materials herein are provided for general information purposes only and are not intended to constitute legal or other advice or opinions on any specific matters and are not intended to replace the advice of a qualified attorney, plan provider or other professional advisor. This information has been taken from sources which we believe to be reliable, but there is no guarantee as to its accuracy. In accordance with IRS Circular 230, this communication is not intended or written to be used, and cannot be used as or considered a ‘covered opinion’ or other written tax advice and should not be relied upon for any purpose other than its intended purpose.
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