The U.S. Department of Labor (DOL) has issued a new rule that allows employers to join together as a single group to offer group health insurance coverage to employees, working owners (including those without other employees), and their spouses and dependents as part of an “association health plan.” The rule allows association health plans to be formed on the basis of industry or geography, such as by state, city, county, or multi-state metropolitan area.

The new rule subjects association health plans to the nondiscrimination rules currently applicable to large group coverage under the Health Insurance Portability and Accountability Act (HIPAA), as amended by the Affordable Care Act (ACA). These rules prohibit discrimination based on a health factor or within groups of similarly situated individuals, but do generally permit plans to impose different eligibility provisions and costs based on bona-fide employment-based classifications, such as full-time versus part-time status.

Click here for more information from the DOL.

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Effective July 1, 2018, the minimum wage will increase in the following states and localities as follows:

• Maryland: $10.10 per hour
• Oregon: $10.75 per hour ($12.00 per hour in the Portland metropolitan area; $10.50 per hour in nonurban counties)
• District of Columbia (DC): $13.25 per hour
• Los Angeles, CA: $13.25 per hour for employers with 26 or more employees; $12.00 per hour for employers with 25 or fewer employees
• Chicago, IL: $12.00 per hour
• Cook County, IL: $11.00 per hour
• San Francisco, CA: $15.00 per hour
• Minneapolis, MN: $11.25 per hour for employers with 100 or more employees; $10.25 per hour for employers with 100 or fewer employees
• Belmont, CA: $12.50 per hour
• Emeryville, CA: $15.00 per hour
• Malibu, CA: $13.25 per hour for employers with 26 or more employees; $12.00 per hour for employers with 25 or fewer employees
• Milpitas, CA: $13.50 per hour
• Pasadena, CA: $13.25 per hour for employers with 26 or more employees; $12.00 per hour for employers with 25 or fewer employees
• San Leandro, CA: $13.00 per hour
• Montgomery County, MD: $12.25 per hour for employers with 51 or more employees; $12.00 per hour for employers with 2-50 employees

Additional minimum wage rates may apply for tipped employees and in metropolitan areas. Be sure to comply with any local wage requirements that apply to your business.

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Group health plan administrators are reminded that Form 5500 must be filed with the U.S. Department of Labor (DOL) by the last day of the seventh month after the plan year ends. For calendar-year plans, that due date falls on July 31.

Who Must File Form 5500
In general, all group health plans covered by the Employee Retirement Income Security Act (ERISA) are required to file Form 5500. However, group health plans (whether fully insured, unfunded [meaning its benefits are paid as needed directly from the general assets of the plan sponsor], or a combination of the two) that covered fewer than 100 participants as of the beginning of the plan year are exempt from the Form 5500 filing requirement. For more on the Form 5500 requirement, click here.

How to File Form 5500
Forms 5500 must be filed electronically with the DOL using either the IFILE web-based filing system or an approved vendor’s software.

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The U.S. Department of Health and Human Services (HHS) has issued a new rule that allows employers to directly enroll in SHOP (Small Business Health Options Program) coverage through a SHOP-registered agent or broker. This enrollment approach is now generally available in federally-facilitated SHOPs (FF-SHOPs), including state-based Exchanges using the federal platform for SHOP, for plan years beginning on or after January 1, 2018. State-based Exchanges operating their own SHOPs can also adopt this new approach.

For more information, please contact the SHOP that applies in your state.

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The U.S. Department of Labor (DOL) has released guidance clarifying federal law on tip pooling. The guidance was issued in response to a federal law that amended the federal Fair Labor Standards Act’s (FLSA) tip pooling rules. The DOL guidance states that:

1. Employers are prohibited from keeping tips received by their employees, regardless of whether the employer takes a tip credit against the minimum wage for its employees.
2. Federal regulations no longer prohibit tip pooling when employers pay tipped employees at least the full federal minimum wage and do not claim a tip credit.
3. Employers who pay at least the full federal minimum wage are no longer prohibited from allowing employees who are not customarily and regularly tipped—such as cooks and dishwashers—to participate in tip pools. However, managers and supervisors are prohibited from participating in tip pools.

However, employers should remember that some states have different rules concerning tip pools and tip credits. When there are differences between state and federal laws in this area, the law more favorable to the employee generally applies.

Click here to read the DOL guidance.

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Click here to read the U.S. Supreme Court’s opinion.

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Individuals with coverage through the Health Insurance Marketplace who are receiving advance payments of the premium tax credit—which are paid directly to insurance companies to lower monthly premiums—that certain changes in their income or family size may affect the credit. As a result, if circumstances have changed for such individuals, it would be prudent to perform a “mid-year checkup” via the IRS’s Premium Tax Credit Change Estimator to determine if they need to adjust the premium tax credit they are currently receiving. Performing a checkup now will help individuals avoid large differences between the advance credit payments made on their behalf and the amount of the credit they are allowed when they file their tax returns next year.

Reporting Changes in Circumstances
The estimator tool does not report changes in circumstances to the Marketplace. To report changes and adjust the amount of advance payments of the credit, individuals must contact their Marketplace. Changes that should be reported to the Marketplace include:

• An increase or decrease in an individual’s income;
• Marriage or divorce;
• The birth or adoption of a child;
• Starting a job that provides health insurance;
• Gaining or losing eligibility for other health care coverage; or
• Changing residences.

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The Internal Revenue Service (IRS) has released the 2018 Publication 15-B, Employer’s Tax Guide to Fringe Benefits, which contains information for employers on the employment tax treatment of fringe benefits. The 2018 version of the publication has been updated to include the following changes (among others) from the new tax law and other federal guidance:

• Suspension of the exclusion for qualified bicycle commuting reimbursements.
• Suspension of the exclusion for qualified moving expense reimbursements (with limited exceptions).
• Limitation of the employer deduction for expenses for certain fringe benefits.
• Establishment of qualified small employer health reimbursement arrangements (QSEHRAs).

In addition, the publication contains the following updated guidance for 2018:

• Cents-per-mile rule. The business mileage rate for 2018 is 54.5 cents per mile. This rate may be used to reimburse an employee for business use of a personal vehicle, and under certain conditions, may be used to value the personal use of a vehicle provided to an employee.
• Qualified parking exclusion and commuter transportation benefit. For 2018, the monthly exclusion for qualified parking, commuter highway vehicle transportation, and transit passes is $260.
• Contribution limit on a health flexible spending arrangement (FSA). For plan years beginning after December 31, 2017, a cafeteria plan may not allow an employee to request salary reduction contributions for a health FSA in excess of $2,650.

Click here to view the publication.

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The Internal Revenue Service (IRS) has released a new Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans, which contains information for use in preparing 2017 tax returns.

Publication 969 is released annually and provides information on the rules related to health savings accounts (HSAs), health flexible spending arrangements (health FSAs), and health reimbursement arrangements (HRAs), including qualification, contribution, distribution, and employer participation requirements.

Click here to read Publication 969.

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California has issued guidance and FAQs on the state Immigrant Worker Protection Act to help employers comply with the law.

Guidance and FAQs
Among other things, the guidance and FAQs address the following topics regarding the Immigrant Worker Protection Act:

• Employer prohibitions;
• Employer requirements;
• Penalties;
• Clarifications of terms used in the law; and
• The law’s interaction with federal requirements.

Background
The Immigrant Worker Protection Act is currently in effect and applies to employers of all sizes. Among other things, the law:

• Sets forth certain prohibitions on employer conduct if an immigration enforcement agent seeks to enter the employer’s place of business or requests employee records (subject to specified exceptions); and
• Mandates that employers comply with specific notice requirements to employees if the employer receives notice from an immigration agency of an upcoming inspection of I-9 Employment Eligibility Verification Forms or other employment records.

Employers with questions as to the law’s impact on workplace policies and practices should contact a knowledgeable employment and/or immigration law attorney.

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