Below is our most recent list of News & Notes from the week that was. Let us know what you think. Should we continue this feature?
- New York City is considering using the city’s public pension funds to finance housing for those displaced by Hurricane Sandy.
- A recent New York Life study confirms our thinking that, when it comes to retirement saving, people tend to take the path of least resistance.
- Continuing with our unplanned New York theme, the New York Times recently reported how some non-traditional medical practitioners were lobbying to be included as “essential health benefits” under health care reform. Is acupuncture essential?
- Going completely to the other coast, CBS Los Angeles reported that LA County officials were scrambling to retain “paying patients” ahead of 2014.
- Apparently, defined contribution plan fees were at a record low in 2012. Do you think fee disclosure had anything to do with that?
- Finally, can you imagine buying health insurance at the grocery store? That may happen in the future, says this Kaiser Health News report. Seeing the premium quotes might make us think twice about some of our purchases (Twinkies are healthy, right?).
Just as we did last week, below, we share some recent benefits-related(ish) stories and other links.
- Today would have been the deadline for states to submit their PPACA health insurance exchange blueprints, but HHS extended the deadline for the blueprints and then, a few days later, extended the deadline for states to tell HHS if they were starting an exchange. As these reports from Kaiser show, some states are in and some states are out. State Refor(u)m is keeping a list of state responses here.
- The IRS released the latest edition of the Employee Plans News with some helpful information about plan administrative issues.
- InvestmentNews reports that 401(k) plans rode out the Great Recession just fine, thank you very much.
- The New York Times recently featured one company that is offering income for life through its 401(k) plan. Is this something you’re considering?
- We shared previously about some actions the federal government may take to address the fiscal cliff, but this article talks about what states are doing.
- This Wall Street Journal article shares some innovative weight loss technologies employers are using to curb health care costs.
As a new feature here on BenefitsBryanCave.com, we are going to regularly share some recent benefits-related(ish) stories and other links.
- The IRS is encouraging donations of unused leave to help Hurricane Sandy victims. A more complete list of Hurricane Sandy-related IRS news is also available here. The PBGC also has a list of disaster relief announcements and Medicare has extended enrollment for those impacted by Sandy.
- Get out your flotation devices because Politico is predicting a post-election flood of health care reform guidance.
- Several states had PPACA measures on the ballot. You can check out this list of the measures, and how they fared on election night.
- Speaking of health care and elections, this Washington Post article says many employees are overwhelmed by open enrollment.
- And just when you thought we were done with PPACA litigation, the Obama administration has said it does not have a problem with the Supreme Court allowing Liberty University’s challenge to PPACA to be reviewed at the Fourth Circuit.
- A Plan Sponsor Council of America study showed that participant fee disclosure did not significantly change participant behavior, but it did change the behavior of some plan sponsors.
- Do you think you know your facts about health care? Take this short LA Times quiz and see how your score.
We’re working on putting together a series of roundtables to help our clients and friends discuss their worries and strategies to deal with health reform/PPACA now that the Supreme Court has weighed in. We want to make sure the program is helpful and impactful so we want to hear from YOU. What are your biggest compliance concerns? What do you want to hear more about?
- Summaries of benefits and coverage,
- Form W-2 reporting of the cost of health coverage,
- $2,500 limit for health FSAs,
- How to handle medical loss ratio rebates,
- Preparing for the 2013 increase in Medicare tax,
- 90-day limitations on waiting periods,
- The “shared responsibility” (aka “play or pay”) penalties for employers,
- Increased incentives for wellness programs,
- Non-discrimination rules for insured health plans,
- Automatic enrollment in health plans for employers with at least 200 employees,
- Why employers need to consider the impact of the Supreme Court ruling on Medicaid expansion, or
- Anything else?
What strategies have you heard about that you would like to discuss more? Please leave us a comment below or drop a line to your Bryan Cave benefits contact and let us know your thoughts!
In the event the U.S. Supreme Court strikes down the entire 2010 health care reform bill, individual and married taxpayers with income in excess of $200,000 and $250,000 respectively will dodge the 0.9% Medicare surtax on earned income and 3.8% Medicare surtax on most investment income scheduled to take effect January 1, 2013. But that’s not the end of the scheduled tax increases for 2013.
Assuming Congress takes no action and the Bush-era tax cuts expire at the end of 2012, the individual tax rates for 2013 will be as follows:
|Ordinary Income Tax Rates andShort-Term Capital Gains Rates||
|Long-Term Capital Gains Rates||
15% (35% income tax bracket)
15% (33% income tax bracket)
15% (28% income tax bracket)
15% (25% income tax bracket)
0% (15% income tax bracket)
0% (10% income tax bracket)
20% (39.6% income tax bracket)
20% (36% income tax bracket)
20% (31% income tax bracket)
20% (28% income tax bracket)
10% (15% income tax bracket)
Dividends will be taxed at ordinary income rates.
In addition, the following individual income tax limitations/phase-outs are scheduled to be reinstated in 2013:
- The “Pease” limitations on certain itemized deductions for higher income taxpayers were temporarily repealed through 2012. The limitation reduces the total amount of certain otherwise allowable deductions by 3% of the amount by which the taxpayer’s adjusted gross income exceeds a specified inflation-indexed income threshold, but not by more than 80%. The income threshold for 2013 is projected to be $177,550 for single taxpayers and married taxpayers filing jointly.
- Personal exemption phase-outs did not apply for 2010, 2011 and 2012. Under the phase-out, personal exemptions are reduced by 2% for each $2,500 by which the taxpayer’s adjusted gross income exceeds a specified income threshold. The income threshold for 2012 is projected to be $266,300 for married taxpayers filing jointly and $177,550 for single taxpayers.
- For 2011 and 2012, the employee portion of Social Security (FICA taxes) was reduced to 4.2% instead of 6.2%. Starting 2013, the employee-portion of Social Security will revert back to the full 6.2%.
The marriage penalty will also return in 2013 when the standard deduction for married taxpayers will cease to be calculated as 200% of the standard deduction amount for single taxpayers and revert to approximately 167% of the standard deduction amount for single taxpayers.
While the resolution of the constitutionality of health care reform will be decided this month, any Congressional action to extend the Bush-era tax cuts or provide other relief is unlikely to occur before December 2012 and can occur as late as February 2013.
On Friday, President Obama signed a bill (H.R. 3765) that will temporarily extend the payroll tax holiday. The 4.2% Social Security payroll tax rate for individuals (historically 6.2%), which was set to expire on December 31, 2011, will continue though February 29, 2012. The IRS encouraged employers to implement the tax rate cut as soon as possible, but no later than January 31, 2012. For any Social Security tax over-withheld in January, employers should adjust employees’ pay no later than March 31, 2012.
The legislation also extends unemployment insurance benefits without imposing any new qualifications and prevents reimbursement cuts to Medicare providers, which were scheduled to be cut by 27%. A joint conference committee with House and Senate members was established to negotiate further extensions of the tax cut, unemployment insurance benefits, and Medicare reimbursement provisions. The bill will be paid for by raising the guarantee fee charged by Fannie Mae and Freddie Mac to loan originators.