Author: Erwin Kratz

Erwin Kratz practices exclusively in the areas of ERISA and employee benefits law, focusing on tax and regulatory matters relating to qualified and nonqualified deferred compensation and welfare benefits.

DOL to Propose New Fiduciary Rules

The White House today announced that in the coming months, the Department of Labor will propose a new fiduciary rule that, according to the announcement, will:

  • Expand the types of retirement investment advice subject to ERISA’s fiduciary standards.
  • Continue to allow private firms to set their own compensation practices by proposing a new type of exemption from limits on payments creating conflicts of interest that is more principles-based than the current rules. The exemption will still permit many common forms of compensation, such as commissions and revenue sharing, whether paid by the client or the investment firm.
  • Allow advisers to continue to provide general education on retirement saving across employer-sponsored plans and IRAs without triggering fiduciary duties.

The DOL will issue a Notice of Proposed Rulemaking (NPRM) in the coming months. Then there will be a comment period before the final rule is issued.

icon FACT SHEET: Middle Class Economics: Strengthening Retirement Security by Cracking Down on Backdoor Payments and Hidden Fees | The White House.

Filing Requirements for IRS Forms 1094 and 1095

The IRS has released final Forms 1094 and 1095, which will be used to enforce the ACA employer mandate penalties and the individual mandate and tax credit eligibility rules. These forms must first be filed by employers and insurers in early 2016, for the 2015 calendar year. Filing is optional in 2015 for the 2014 calendar year. While we do not recommend voluntary filing, we do recommend employers review the forms and the instructions so they are aware of what filing in 2016 will involve because they need to be gathering the information to report now.

IRS Announces Transition Relief for Employer Payment Plans (IRS Notice 2015-17)

IRS Notice 2015-17 provides transition relief for employers that are not Applicable Large Employers (“ALEs”) (i.e. those with less than 50 FTEs) that pay, or reimburse employees for individual health policy premiums. These “employer payment plans” do not satisfy the ACA market reforms, which exposes the employers to excise taxes under Code § 4980D ($100 per day per affected individual), as of January 1, 2014. Notice 2015-17 provides that the excise tax will not be asserted (1) for 2014 against employers that are not ALEs for 2014 , and (2) for January 1 through June 30, 2015 for employers that are not ALEs for 2015. After June 30, 2015, such employers may be liable for the Code § 4980D excise tax.

icon Notice 2015-17

icon Our subsequent post about reporting and paying the excise tax