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Tzvia Feiertag

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Tzvia Feiertag is a senior associate in the Labor & Employment Law Department. She practices exclusively in the areas of ERISA and employee benefits-related tax law.

Tzvia advises a diverse group of clients, including Fortune 500 companies, financial service companies, media and publishing companies, private companies and not-for-profit organizations on all aspects of pension and welfare benefit plans. She counsels clients on the design, implementation and operation of 401(k), defined contribution, defined benefit, and self-insured and fully-insured medical, life and disability plans, as well as cafeteria plans, health savings account plans, flexible spending account programs and severance plans.

As previously reported, the IRS recently released final regulations on the Affordable Care Act’s (ACA) employer “shared responsibility” provisions, also known as the “pay-or-play” mandate. Under the mandate, in order to avoid potential penalties, an applicable large employer (generally, 50 or more full-time equivalent employees (100 or more in 2015)) must offer affordable, minimum value health coverage to its full-time employees and their “dependents.”

For purposes of the pay-or-play mandate, “dependents” are an employee’s natural or adopted children under age 26 (not spouses). The final regulations clarify that an employer may exclude employees’ stepchildren, foster children, and children who are non-U.S. citizens or nationals (with certain exceptions) from coverage under its group health plan without exposing itself to a potential penalty.

The final regulations also provide welcome news for employers who do not yet offer coverage their full-time employees’ dependents. An employer that is planning to offer dependent coverage has until the start of its 2016 plan year to do so, as long as it takes steps during its 2015 plan year.

As reported, the U.S. Labor Department, the U.S. Department of Health and Human Services and the U.S. Treasury Department (together, the “Departments”) recently issued additional FAQs regarding implementation of the market reform provisions of the Affordable Care Act (ACA). FAQs 6 and 7 include new guidance on the temporary transitional relief issued last year…

Continuing its implementation of the United States Supreme Court decision in U.S. v. Windsor, the Internal Revenue Service (IRS) recently issued Notice 2013-61, which provides guidance for employers to make claims for refunds or adjustments of overpayments of Federal Insurance Contributions Act (FICA) and Federal income tax withholding (employment taxes) for 2013 and prior years with respect to certain fringe benefits and remuneration provided to same-sex spouses of employees.

In Revenue Ruling 2013-17 issued in August, the IRS announced that effective September 16, 2013, for Federal tax purposes, it would recognize same-sex marriages and was adopting a “place of celebration” rule pursuant to which all same-sex couples married in a state or foreign jurisdiction permitting such marriages would be recognized as spouses for federal tax purposes, regardless of their state of residence. It also announced that it intended to distribute streamlined procedures for employees who wish to claim refunds for federal income taxes paid on the value of health coverage to same-sex spouses and guidance for employers who wish to claim refunds for payroll taxes paid on such benefits.

Notice 2013-61 provides these special streamlined administrative procedures. Under these procedures, if an employer that withheld employment taxes for same-sex spouse benefits paid to or on behalf of an employee in the third quarter of 2013 ascertains the amount withheld on those benefits and repays or reimburses the employee for these amounts before filing the third quarter Form 941 (Employer’s Quarterly Federal Tax Return) due on October 31, 2013, an employer need not report these wages and withholding on the third quarter Form 941. If an employer does not repay or reimburse the employee for the overcollected amount before it files the third quarter 2013 Form 941, an employer must report the amount of the overcollection on that return and can use one of two special administrative procedures to make an adjustment or claim a refund.

The Affordable Care Act’s medical loss ratio (“MLR”) rule requires health insurance companies (but not self-insured plans) in the group or individual market to provide an annual rebate to enrollees if the insurer’s MLR falls below a certain minimum level.  Generally, this means that health insurance companies in the individual and small group markets must spend at least 80 percent of the premium dollars they collect on medical care and quality improvement activities, and health insurance companies in the large group market must spend at least 85 percent of premium dollars on medical care and quality improvement activities.[1] 

Health insurers that failed to meet the MLR standards for 2011 were first required to pay rebates in 2012.  Health insurers that failed to meet the MLR standards for 2012 were required to pay rebates by August 1, 2013.[2]  In addition, health insurers were required to send notice to group policyholders and to all employees who participated in affected plans during 2012 informing them of any rebates. 

To help clarify the rules on how rebates are treated under the Employee Retirement Income Security Act of 1974 (“ERISA”), the U.S. Department of Labor (“DOL”) issued Technical Release 2011-04 (“TR 2011-04”).  Plan sponsors maintaining fully-insured ERISA-covered group health plans (and plan fiduciaries) should keep these rules in mind as they consider their options for managing any MLR rebates.

Here are five tips to consider in the decision-making process.