On April 16, 2015, the Equal Employment Opportunity Commission (EEOC) released proposed regulations covering wellness programs that involve disability-related inquiries or medical examinations. The release of the proposed regulations follows months of EEOC enforcement actions against employers alleging that wellness programs sponsored by the employers violated the Americans with Disabilities Act (ADA) despite compliance with 2013 regulations jointly issued by the Department of Labor (DOL), the Department of the Treasury (Treasury) and the Department of Health and Human Services (HHS) that permitted such programs under ERISA and the Affordable Care Act (ACA). With a few notable exceptions (described below), the proposed regulations are somewhat consistent with the existing DOL guidance on employer-sponsored wellness programs. However, the EEOC has requested comments on multiple topics that could significantly alter the regulatory requirements.
Deja-Vu All Over Again: Congress Once Again Retroactively Increases Mass Transit Benefit Limits
Prior to the enactment of the Tax Increase Prevention Act of 2014 (“TIPA”) in December 2014, effective for 2014, mass transit commuters were only able to contribute a maximum of $130 per month on a pre-tax basis toward their transit expenses (a reduction from $245 per month permitted in 2013). TIPA retroactively increased the maximum pre-tax contribution limit for employees’ mass transit commuting expenses to the level permitted for parking expenses, i.e., $250 per month, as provided under Code Section 132(f). However, this increased monthly cap expired again on December 31, 2014, so it is currently capped at $130 for 2015, unless Congress extends it further. If this sounds familiar, it is. Congress took similar action to retroactively increase benefits in 2012, and the IRS issued similar guidance on retroactive adjustments in early 2013.
DOL’s New Audit Focus? Health Plan Claims and Appeals and Hard to Value Assets
In recent talks and appearances, representatives of the U.S. Department of Labor have issued a warning about new areas of focus of DOL audits and enforcement actions. While there are a number of different enforcement priorities, we discuss two of them—health plan claims and appeals and valuation of hard to value assets— here because these are areas in which the DOL has traditionally not spent significant time on audit. In addition, these issues share the common characteristic of being able to be “cleaned up” in advance of an audit if plan fiduciaries take some common sense steps.
Contributing Employers to Multiemployer Plans Are Not Off the Hook – Tracking the Full-Time Status of Employees
Contributing employers to multiemployer plans were relieved by the Treasury Department’s interim guidance stating that they will not be subject to the employer shared responsibility payments under the Affordable Care Act (“ACA”) with respect to employees for whom they contribute to a multiemployer plan that provides minimum value, offers dependent child coverage and is affordable. (See our blog posting here.) Since relief is provided for all employees for whom contributions are made to a multiemployer plan, regardless of whether coverage is offered, the question of whether an employee is full-time is largely irrelevant to the relief. That led many employers to believe mistakenly that they do not have to determine the full-time status of these employees, allowing these employers to avoid the administrative complications associated with tracking employees who, in many industries, are variable hour employees. Unfortunately, this belief is not well-grounded.