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Amy N. Moore

Amy Moore advised some of the world's largest multinational companies on a wide range of tax, ERISA, health care, and employment law issues concerning all types of compensation arrangements and benefit programs. She was ranked as one of the top 20 employee benefits lawyers in the nation.

Amy’s clients included state governments, national tax-exempt organizations, and private companies as well as Fortune 500 companies. She helped employers and service-providers comply with the complex laws and regulations governing health plans and wellness programs. She advised plan fiduciaries and asset managers on benefit plan investments, prohibited transaction exemptions, and plan governance issues. She had successfully defended employers and fiduciaries in a variety of audits and contested agency proceedings before the Labor Department, Internal Revenue Service, and other federal agencies.

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Many employers will face two significant new reporting requirements for employee health coverage starting next year:

  • Section 6055 Return:  Employers and insurers that provide minimum essential coverage must report information to the IRS about each covered individual for each month, and provide a copy of the report to covered employees and retirees.
  • Section 6056 Return:  Employers with at least 50 full-time employees must report additional information to the IRS (with a copy to the employee) to confirm that the employer offers health coverage that is affordable and provides minimum value to full-time employees and their dependents.

Final regulations (available here and here) adopt the reporting requirements proposed last fall, with only modest changes.  (We described the proposed requirements in our earlier post: Health Coverage Reporting Rules Create New Burdens for Employers.)  These are some of the challenges employers will confront as they prepare to comply with the new requirements:

No Further Extension of the Reporting Deadline

The IRS announced last year that it would waive the reporting penalties for coverage provided in 2014.  The final regulations do not provide any further extension of the reporting deadline.  Accordingly, the first reports will be due early in 2016 for health coverage provided in 2015.

Employers will have to develop administrative systems and procedures to collect the required information, and many employers will wish to engage outside vendors to help them comply with the new reporting requirements.  These arrangements generally must be in place by January 1, 2015, when the new requirements take effect.

No Electronic Statements Unless the Employee Consents 

An employer must provide individual statements to employees showing the health coverage information reported to the IRS for the employee and the employee’s family.  Although employers had requested rules that would allow them to furnish these statements electronically, the final regulations continue to provide that an employer may furnish an electronic statement only if the individual consents.  The consent rules will make electronic delivery impractical for many employers.

The employer’s request for consent must refer to the specific forms that the employer wishes to provide electronically.  Accordingly, even if an employer has previously received the employee’s consent to furnish other forms (such as Form W-2) electronically, or has received a general consent to furnish all forms electronically, these consents will not extend to the new health coverage statements.
Continue Reading Final Health Coverage Reporting Rules Offer Employers Little Relief

If an employee assistance program (“EAP”) provides counseling for substance abuse, stress, depression, and similar health problems, the Labor Department and IRS regard it as a group health plan.  Unless the EAP qualifies for an exception, it will have difficulty complying with the group health plan coverage requirements and other mandates.

Recent guidance from the federal regulatory agencies gives many EAPs a “free pass” for 2014, and creates new compliance options for 2015 and beyond.  In order to keep their EAPs in compliance after 2014, employers might need to make design changes or satisfy other new requirements.  EAP sponsors should take this opportunity to review their compliance options and develop a compliance strategy.
Continue Reading Compliance Strategies for Employee Assistance Programs

Starting in 2014, most individuals must maintain minimum essential health coverage or pay a penalty.  (Please see our post here for a description of the health coverage mandates that apply to individuals and their families.)  The Internal Revenue Service recently issued a proposed regulation clarifying the minimum essential coverage rules and other aspects of the individual mandate.  Several points addressed in the proposed regulation will be of interest to employers that offer group health coverage to their employees.

Excepted Benefits Are Not Minimum Essential Coverage

Employers might wish to structure programs providing limited health benefits—such as dental and vision coverage or employee assistance—as “excepted benefits” so that these programs will avoid the group health plan requirements.  Final regulations issued last year explained that minimum essential coverage does not include “health insurance coverage” consisting only of excepted benefits.  The proposed regulation clarifies that no coverage (whether insured or self-insured) consisting solely of excepted benefits will qualify as minimum essential coverage.

This clarification confirms that coverage consisting solely of excepted benefits will not satisfy the employer’s obligation to offer minimum essential coverage to at least 95% of its full-time employees or the individual’s obligation to maintain minimum essential coverage.  Employers must offer, and individuals must maintain, other group health coverage in order to satisfy these shared-responsibility mandates.

On the positive side, however, a lower-income employee who is covered by a plan that offers only excepted benefits will not be prevented from receiving premium tax credits.  The tax credits help lower-income individuals purchase individual health coverage on an exchange.  An employee who has minimum essential coverage from an employer health plan is not eligible for premium tax credits; but employer coverage consisting solely of excepted benefits will not affect the employee’s eligibility.
Continue Reading New Guidance Clarifies Minimum Essential Coverage Rules

The Affordable Care Act created two new taxes for individuals whose income exceeds $200,000 ($250,000 for married couples filing joint returns).  Employees must pay an additional 0.9% Medicare tax on wages in excess of these dollar thresholds.  Individuals whose adjusted gross income exceeds the dollar thresholds also must pay a 3.8% tax on their net investment income.

Both taxes became effective in 2013, but high-income employees will pay the taxes for the first time next year, when they file their 2013 tax returns.  Employers are required to withhold the 0.9% additional Medicare tax, and are liable for any amount they fail to withhold.

The IRS recently published a final regulation and an updated set of FAQs interpreting the additional Medicare tax.  The IRS also published a final regulation, a new proposed regulation, and updated FAQs interpreting the tax on net investment income.
Continue Reading IRS Issues Guidance on New Medicare Taxes for High-Income Employees

The Department of Labor’s Office of Inspector General recently issued a report detailing concerns with the valuation of alternative investments (such as private equity funds, hedge funds, and real estate) held by ERISA plans.  ERISA requires plan sponsors and fiduciaries to value investments for several purposes, including to determine funding obligations, select investments, monitor investment performance, and file accurate financial statements.  The report notes that many plan fiduciaries rely on valuations provided by managers of alternative investments without analyzing the basis for the valuation or seeking independent review.  The report suggests that this practice poses substantial risks to the retirement system and urges the Labor Department to require more rigorous valuation methodology.
Continue Reading ERISA Plans’ Valuation of Private Equity and Other Alternative Investments Draws Increased Scrutiny

The IRS has released proposed regulations that implement two significant new reporting requirements for employer group health plans.  Employers and insurers that provide minimum essential health coverage must report information to the IRS about the coverage provided to each individual for each month, with a copy of the statement to the individual.  Employers with at least 50 full-time employees must report additional information to the IRS, with a copy to each full-time employee, to indicate whether the coverage they offer (if any) is affordable and provides minimum value.  Both reporting requirements will become effective in 2015.  Reporting entities must develop administrative systems and procedures before the effective date so that they will be able to begin collecting the required information in 2015.

Below is summary of the requirements for private employers sponsoring single-employer plans followed by a discussion of the reporting requirements.

Section 6055 Returns Section 6056 Returns
Who Must File Insurer, for insured plans. Employer, for self-insured plans Employers with 50 or more full-time employees (regardless of whether or how coverage is   provided)
Form 1095-B 1095-C
Content
  • name, address, and EIN of employer
  • name, address, and TIN of insurer (for insured plans)
  • name, address, TIN of each employee or retiree and each covered spouse and/or dependent
  • for each covered individual, the months of the year for which coverage was provided
  • other information required by IRS in later guidance
  • name, address, and EIN of employer
  • name and phone number of employer’s contact person
  • whether the employer offered minimum essential coverage to its full-time employees each month of the year
  • the number of full-time employees each month, and the name, address, and TIN of each employee
  • for each full-time employee, the months when coverage was available and the months when coverage was provided
  • for each full-time employee, the employee’s share of the monthly premium for self-only coverage under the lowest-cost option (if any) that provides minimum value
  • other information required by IRS (see list below for information the IRS expects to require)
Additional   Content for Notice to Individual
  • contact phone number for entity required to file statement
  • policy number (for insured plans)
 none
Due Date for Returns To the IRS: February 28 (or by March 31, if filing electronically).

To the individual: January 31


Continue Reading Health Coverage Reporting Rules Create New Burdens for Employers

A federal appeals court recently ruled that a private equity fund might be responsible for the unfunded pension liabilities of its bankrupt portfolio company.  This ruling could have broader repercussions for private investment funds and the companies they own.  If the companies are considered to be related employers under the rules that govern employee benefits, they might acquire other unexpected obligations, such as the obligation to provide health care to their employees.
Continue Reading Private Investment Funds Face Potential Liability for Portfolio Companies’ Employee Benefits

More than a month after the Supreme Court struck down section 3 of the Defense of Marriage Act (“DOMA”) in United States v. Windsor, employers are still waiting for the federal government to answer fundamental questions about the rights of same-sex spouses in the post-DOMA world.  In the meantime, however, lower federal courts have begun to come to grips with these questions in decisions interpreting and applying the Supreme Court’s Windsor decision.

A significant issue for employers is whether they should determine a couple’s marital status based on the law of the state where the marriage was celebrated, even if the couple now resides in a state that does not recognize same-sex marriage.  A number of states have “mini-DOMA” statutes declaring that the state will not recognize same-sex marriages, including marriages performed in other jurisdictions.

Although the Supreme Court held in Windsor that the federal government cannot refuse to recognize a same-sex marriage that is recognized under state law, the Supreme Court did not address section 2 of DOMA, which provides that a state is not required to recognize a same-sex marriage performed in a different state.  As a result, Windsor leaves open the possibility that a same-sex couple’s marriage might be valid in some states and not in others.  A rule that requires plan sponsors to look to a couple’s state of residence rather than to the state of celebration to determine the validity of their marriage would create significant administrative burdens.
Continue Reading Federal Courts Decide Rights of Same-Sex Spouses After DOMA