Pub. 14 2015-2016 Issue 4

N E W J E R S E Y C O A L I T I O N O F A U T O M O T I V E R E T A I L E R S 21 new jersey auto retailer W W W . N J C A R . O R G While wellness programs have become increasingly popular, there has been litigation (and just general confusion) about pre- cisely how employers can design these programs in a nondis- criminatory way. In 2015, the EEOC released proposed rules under both the ADA1 and GINA2 that challenged employers by setting new incentive limitations and disclosure requirements on health and wellness plans. Final rules developed in 2016 are expected to clarify some of the remaining questions about these proposed rules. For ex- ample, final rules under the ADA will likely clarify how the new 30% cap on wellness incentives (imposed on wellness plans with “medical examinations” or “disability-related inquiries”) will apply to employees’ spouses and to different tiers of coverage under the associated group health plan. Guidance Will Help Employers Comply with Nondis- crimination Rules New rules under the ACA outlining nondiscrimination testing requirements for fully-insured health plans are expected to be released in 2016. Employers with fully-insured plans may need to move quickly to develop new eligibility rules or reduce ben- efits if their existing plans favor highly-compensated manage- ment or executives by offering them benefits or plans that are not available to all qualified employees. This nondiscrimina- tion requirement was originally scheduled to take effect in 2010, but was delayed indefinitely until the IRS issued regulations or guidance on how to comply with the rules. The wait is likely nearing an end as Treasury officials have informally com- mented that guidance will be released before the end of 2016. More Employers will be Forced to Pay or Play Additional rules regarding Pay or Play went into effect on January 1, 2016, and employers with 50 or more full-time employees, including full-time equivalents, become subject to the rules. This is a much larger group of employers. Last year, businesses with between 50-99 full-time employees and full- time equivalents were not required to comply with Pay or Play, assuming they satisfied certain transition rules. Additionally, the Pay or Play rules will get harder in 2016. Employers must offer minimum essential coverage (MEC) to at least 95% of their full-time employees and their dependents to avoid the ACA’s large penalty. In addition, 2016 is the first year the IRS will penalize employers for not complying. Specifically, the IRS will begin assessing employers with penalties in 2016 for noncompliance in the 2015 calendar year. For some employers, this means hundreds of thousands of dollars–and maybe even millions of dollars–in penalties. Scrambling to Meet Reporting Requirements 2016 is the first year employers will have to meet the ACA’s reporting requirements. On December 28th, the IRS extended the deadline by two months for ACA information reporting to the IRS and for furnishing the forms to employees. This was a much-needed breather for employers scrambling to get their forms completed and sent to employees by the February 1st deadline. The deadline for furnishing Forms 1095-C and 1095-B to employees and participants has been extended from February 1, 2016, to March 31, 2016. The deadline for filing all forms with the IRS (i.e., 1094-C, 1095-C, 1094-B and 1095-B) has been extended from February 29, 2016, to May 31, 2016, if not fil- ing electronically, and from March 31, 2016 to June 30, 2016 if filing electronically. However, failing to comply with the information reporting requirements could still result in penal- ties of up to $3 million. Hopefully, you’ve been planning for the last few months, and 2016 will be a great year for you and your organization. If not, it’s time to roll up the sleeves and get to work. 1 Proposed Rule, Amendments to Regulations under the Americans with Dis- abilities Act, 80 Fed. Reg. 21659 (April 20, 2015) 2 Proposed Rule, Genetic Information Nondiscrimination Act of 2008, 80 Fed. Reg. 66853 (Oct. 30, 2015) Daniel Kuperstein is Senior Vice President of Compliance at Corporate Syner- gies. Dan is an attorney with experience in a broad array of employee ben- efits, labor and employment matters. He can be reached at 856.813.1207. The deadline for furnishing Forms 1095-C and 1095-B to employees and participants has been extended from February 1, 2016, to March 31, 2016.