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  • BC Network
    Friday, January 27, 2017

    PenaltyLast week, the Department of Labor (DOL) released adjusted penalty amounts which are effective for penalties assessed on or after January 13, 2017, whose associated violations occurred after November 2, 2015.  You might remember that these penalties were just adjusted effective August 1, 2016 (also for violations which occurred after November 2, 2015); however, the DOL is required by law to release adjusted penalties every year by January 15th, so you shouldn’t be surprised to see these amounts rise again next year.

    All of the adjusted penalties are published in the Federal Register, but we’ve listed a few of the updated penalty amounts under the Employee Retirement Income Security Act of 1974 (ERISA) for you below:

    General Penalties

    • For a failure to file a 5500, the penalty will be $2,097 per day (up from $2,063).
    • If you don’t provide documents and information requested by the DOL, the penalty will be $149 per day (up from $147), up to a maximum penalty of $1,496 per request (up from $1,472).
    • A failure to provide reports to certain former participants or failure to maintain records to determine their benefits remained stable at $28 per employee.

    Pension and Retirement

    • A failure to provide a blackout notice will be subject to a $133 per day per participant penalty (up from $131).
    • A failure to provide participants a notice of benefit restrictions under an underfunded pension plan under 436 of the tax code will cost $1,659 per day (up from $1,632).
      • Failure of fiduciary to make a properly restricted distribution from a defined benefit plan will be $16,169 per distribution (up from $15,909).
    • A failure of a multiemployer plan to provide plan documents and other information or to provide an estimate of withdrawal liability will be $1,659 per day (up from $1,632).
    • A failure to provide notice of an automatic contribution arrangement required under Section 514(e)(3) of ERISA will also be $1,659 per day per participant (also up from $1,632).

    Health and Welfare

    • For a multiple employer welfare arrangement’s failure to file a M-1, the penalty will be $1,527 per day (up from $1,502).
    • Employers who fail to give employees their required CHIP notices will be subject to a $112 per day per employee penalty (up from $110).
    • Failing to give State Medicaid & CHIP agencies information on an employee’s health coverage will also cost $112 per day per participant/beneficiary (again, up from $110).
    • Health plan violations of the Genetic Information Nondiscrimination Act will also go up to $112 per day per participant/beneficiary from $110. Additionally, the following minimums and maximums for GINA violations also go up:
      • minimum penalty for de minimis failures not corrected prior to receiving a notice from DOL: $2,790 (formerly $2,745)
      • minimum penalty for GINA failures that are not de minimis and are not corrected prior to receiving a notice from the DOL: $16,742 (up from $16,473)
      • cap on unintentional GINA failures: $558,078 (up from $549,095)
    • Failure to provide the Affordable Care Act’s Summary of Benefits and Coverage is now $1,105 per failure (up from $1,087).

    The penalty amounts listed above are generally maximums, but there is no guarantee the DOL will negotiate reduced penalties.  If you’re already wavering on some of your new year’s resolutions, we recommend you stick with making sure your plans remain compliant!

    Friday, January 20, 2017

    Money in basket. Isolated over whiteOn January 18, 2017, the IRS issued proposed regulations allowing amounts held as forfeitures in a 401(k) plan to be used to fund qualified nonelective contributions (QNECs) and qualified matching contributions (QMACs). This sounds really technical (and it is), but it’s also really helpful.  Some plan sponsors of 401(k) plans use additional contributions QNECs and/or QMACs to satisfy nondiscrimination testing.  Before these proposed rules, they could not use forfeitures to fund these contributions because the rules required that QNECs and QMACs be nonforfeitable when made (and also subject to the same distribution restrictions as 401(k) contributions).  If you have money sitting in a forfeiture account, then by definition it was forfeitable when made, so that money couldn’t possibly have been used to fund a QNEC or QMAC.

    The proposed regulations provide that amounts used to make these contributions must satisfy the vesting requirements and distribution requirements applicable to 401(k) contributions when they are allocated to participants’ accounts rather than when they are contributed to the plan.  The regulations are only proposed, but the IRS has said taxpayers may rely on them.  If the final regulations turn out to be more restrictive, then those restrictions will only apply after the regulations are finalized.

    Going forward, plan sponsors wishing to apply amounts held in forfeiture accounts to fund QNECs and QMACs under the 401(k) plan should review their plan document provisions. The plan should at a minimum allow forfeitures to be used to make employer contributions and not prohibit their use to fund QNECs and QMACs. Plan sponsors may wish to amend the document to clarify that “employer contributions” will include allocations made as QNECs and QMACs.

    Wednesday, January 4, 2017

    Rise of Minimum Wage as of January 1st 2017:

    As of January 1st 2017 the statutory Minimum Wage in Germany rises from € 8.50 to € 8.84 gross per hour. It is the first increase, since the Minimum Wage Act (Mindestlohngesetz – MiLoG) has put into effect a statutory minimum wage for Germany in 2015. This statutory minimum wage applies – with some exceptions – to all employees working on German territory. Most interim arrangements that allowed for lower wages for certain groups of workers expired on 31st of December 2016. As the Minimum Wage Act only states a base amount to be paid for any employee in Germany, binding collective bargaining agreements (Allgemeinverbindliche Tarifverträge) stipulate higher hourly wages in many work areas.

    Clients employing blue collar workers in Germany with low salaries as well as clients who have marginal employed employees (geringfügig Beschäftigte) are advised to check whether they comply with the new Minimum Wage.

    New contribution assessment ceilings for statutory Social Security as of January 1st 2017:

    In Germany, most social benefits such as health insurance, long-term care insurance, pension insurance as well as unemployment insurance are statutory and compulsory for the absolute majority of employees. These programs are generally financed by employers and employees jointly. The contributions employers and employees have to pay are determined by percentage rates applying to the gross salary of the employee. The contribution assessment ceilings (the maximum amount of monthly income to which the contribution rates apply) are subject to periodic changes. As of January 1st 2017, the monthly contribution assessment ceilings and percentage rates are as follows:

    Program Contribution Limit/Month Employer Portion Employee Portion
    Health insurance:
    14.6% shared equally + additional contribution by employee (1.1% in average depending on individual insurance company)
    € 4,350.00 (West & East) Up to € 317.55 Up to € 317.55 + additional contribution
    Long-term care insurance:
    2.55% shared equally (except Saxony, where employees cover 1.775% and employers cover 0.775%)
    € 4,350.00 (West & East) Up to € 55.46 Up to € 55.46 + 0.25% if employee is older than 23 and has no children
    Pension insurance:
    18.7% shared equally
    € 6,350.00 (West)
    € 5,700.00 (East)
    Up to € 593.73 (West)
    up to € 532.95 (East)
    Up to € 593.73 (West)
    up to € 532.95 (East)
    Unemployment insurance:
    3% shared equally
    € 6,350.00 (West)
    € 5,700.00 (East)
    Up to € 95.25 (West)
    up to € 85.50 (East)
    Up to € 95.25 (West)
    up to € 85.50 (East)
    Wednesday, December 28, 2016

    In the latest round of FAQs on ACA implementation (now up to 35 if you’re keeping track), the DOL, HHS and Treasury Department addressed questions regarding HIPAA special enrollment rights, ACA coverage for preventive services, and HRA-like arrangements under the 21st Century Cures Act.

    Special Enrollment for Group Health Plans. Under HIPAA, group health plans generally must allow current employees and dependents to enroll in the group health plan if the employee or dependents lose eligibility for coverage in which they were previously enrolled.  This FAQ clarifies that an individual is entitled to a special enrollment period if they lose individual market coverage.  This could happen, for example, if an insurer covering the employee or dependent stops offering that individual market coverage.  However, a loss of coverage due to a failure to timely pay premiums or for cause will not give the employee or dependent in a special enrollment right.

    Women’s Care: Coverage for Preventive Services. The Public Health Service Act (PHS Act) requires non-grandfathered plans to provide recommended preventive services without imposing any cost-sharing.  Recommended preventive services that must be covered include the women’s preventive services provided for in Health Resources and Services Administration’s (HRSA) guidelines.

    HRSA updated its guidelines on December 20, 2016. The updated guidelines build on many of the existing preventive care for women and include screening for breast cancer, cervical cancer, gestational diabetes, HIV, and domestic violence, among other items.  The services identified in the updated guidelines must be covered, without cost-sharing, for plan years beginning on or after December 20, 2017.  For calendar year plans, that’s the plan year starting January 1, 2018.  Until those guidelines become applicable, non-grandfathered plans are required to continue providing coverage without cost-sharing consistent with the previous HRSA guidelines and the PHS Act.

    which-healthcare-planQualified Small Employer Health Reimbursement Arrangements. Since 2013, the DOL, IRS and HHS published guidance (here, here and here) addressing the application of the ACA to HRAs. This guidance explained that HRAs and similar arrangements that are used to pay or reimburse for the cost of individual market policies will fail to comply with the ACA because the arrangements, by definition, reimburse or pay medical expenses only up to a specified dollar amount each year and would not meet other ACA requirements.  Prior to this guidance, smaller employers would sometimes reimburse employees for individual policies instead of obtaining their own group policy.   This guidance made such a practice impermissible and could subject employers to penalty taxes of $100 per day per individual for violations.

    To address concerns raised by application of the ACA reforms to certain arrangements of small employers, the 21st Century Cures Act created a new type of tax-preferred arrangement, the “qualified small employer health reimbursement arrangement” (QSEHRA) to reimburse for medical expenses, including coverage on the individual market.  This special arrangement is effective for plan years beginning after December 31, 2016.  For calendar plan years, this means the QSEHRA exclusion is effective January 1, 2017.  For plan years beginning on or prior to December 31, 2016, the relief under Notice 2015-17 applies (which we discussed in a previous post).

    To be a QSEHRA under the Cures Act, the arrangement generally must:

    • Be funded entirely by an eligible employer (generally, an employer that had fewer than 50 full-time equivalent employees in the prior year and does not offer a group health plan to any of its employees);
    • Provide for payment to, or reimbursement of, an eligible employee for expenses for medical care as defined in Code section 213(d);
    • Not reimburse more than $4,950 ($10,000 for families) of eligible expenses for any year; and
    • Be provided on the same terms to all eligible employees of the employer.

    While a QSEHRA is not a group health plan for ACA or COB RA purposes, the 21st Century Cares Act does not really address how (or whether) other ERISA rules apply to QSEHRAs. Additional guidance in these areas would be helpful.

    Tuesday, December 20, 2016

    claimIt might be tempting to conclude that the recent Department of Labor regulations on disability claims procedures is limited to disability plans.  However, as those familiar with the claims procedures know, it applies to all plans that provide benefits based on a disability determination, which can include vesting or payment under pension, 401(k), and other retirement plans as well. Beyond that, however, the DOL also went a little beyond a discussion of just disability-related claims.

    The New Rules

    The new rules are effective for claims submitted on or after January 1, 2018. Under the new rules, the disability claims process will look a lot like the group health plan claims process.  In short:

    • Disability claims procedures must be designed to ensure independence and impartiality of reviewers.
    • Claim denials for disability benefits have to include additional information, including a discussion of any disagreements with the views of medical and vocational experts and well as additional internal information relied upon in denying the claim. In particular, the DOL made it clear in the preamble that a plan cannot decline to provide internal rules, guidelines, protocols, etc. by claiming they are proprietary.
    • Notices have to be provided in a “culturally and linguistically appropriate manner.” The upshot of this is that, if the claimant lives in a county where the U.S. Census Bureau says at least 10% of the population is literate only in a particular language (other than English), the denial has to include a statement in that language saying language assistance is available. Then the plan must provide a customer assistance service (such as a phone hotline) and must provide notices in that language upon request.
    • New or additional rationales or evidence considered on appeal must be provided as soon as possible and so that the claimant has an opportunity to respond before the claims process ends.
    • If the claims rules are not followed strictly, then the claimant can bypass them and go straight to court. This does not apply to small violations that don’t prejudice the claimant.
    • As with health plan claims, recessions of coverage are treated like claim denials.
    • If a plan has a built-in time limit for filing a lawsuit, a denial on appeal has to describe that limit and include the date on which it will expire. Basically, claimants have to know that they need to sue by a certain date. The DOL noted in the preamble that, while this only applies to disability-related claims, they believe any plan with such a time limit is required to include a description or discussion of it under the existing claims procedure regulations.

    More information about the changes is available in this DOL Fact Sheet.

    What to Do

    While January 1, 2018 might seem like a long way off at this point, employers and plans need to consider taking the following steps early next year:

    1. For insured disability plans, plan sponsors need to engage their insurance carriers in a discussion about how these procedures will apply to them and what changes are needed to the insurance contracts. Some insurers may be slow to adopt these new procedures, which could put plan sponsors in a difficult position.
    2. For self-funded disability plans, plan documents will need to be updated, and procedures put in place.
    3. For retirement plans, there are some decisions to make. Recall that the procedures only apply if a disability determination is required. One way to avoid this is to amend the definition of disability so that it relies on a determination by the Social Security Administration or the employer’s long-term disability carrier. For defined contribution plans, this is likely to be the most expedient approach.

    For defined benefit pension plans, this may not necessarily work. To the extent the disability benefit results in additional accruals, such a change may require a notice under 204(h) of ERISA.  If a disability pension allows participants to elect a different from of benefit, then any change in the definition it may have to apply to future accruals under the plan, which means a disability determination may still be required for many years to come.  Additionally, tying a disability determination to something other than the SSA raises similar issues if the plan sponsor changes disability carriers or plans that change the definition of disability.

    Further, before going down the road of changing disability definitions, plan sponsors may want to consider whether a more restrictive definition, like the SSA definition, is consistent with their benefits philosophies. For plan sponsors who that cannot (or choose not to) amend their retirement plan disability definitions, plan documents must be amended before January 1, 2018 to incorporate these rules  and procedures must be developed to address them.

    1. All plans that have lawsuit filing deadlines, even if they don’t provide disability benefits, should revise their notices to include a discussion of that deadline.

     

    Friday, December 16, 2016

    From time to time, we share items of interest from related areas.  To that end, Illinois employers should be aware of four new leave laws that may require revisions to leave policies and procedures:

    • Illinois Employee Sick Leave Act: Effective January 1, 2017, this act requires Illinois employers to permit employees to use half of their accrued sick leave under an employer’s existing sick leave policy for absences related to the illness, injury, or medical appointment of certain family members.
    • Illinois Child Bereavement Leave Act: Effective July 29, 2016, this act requires Illinois employers covered by the federal Family and Medical Leave Act (FMLA) to allow employees to take off up to ten work days per year as unpaid bereavement leave following the death of a child (or up to six weeks if the employee experiences the death of more than one child).
    • Chicago Paid Sick Leave Ordinance: Effective July 1, 2017, this ordinance allows workers in Chicago to earn up to 40 hours of paid sick time per year.
    • Cook County Earned Sick Leave Ordinance: Effective July 1, 2017, this ordinance allows workers in Cook County to earn up to 40 hours of paid sick time per year.

    Click here to read the Alert in full.

    Monday, November 21, 2016

    ACAOn Friday, IRS and the Department of Treasury issued Notice 2016-70 granting an automatic 30-day extension for furnishing 2016 Forms 1095-B, Health Coverage, and 1095-C, Employer-Provided Health Insurance Offer and Coverage, to individuals for employers and other providers of minimum essential coverage (MEC).  These forms must now be provided to individuals by March 2, 2017 rather than January 31, 2017.  Coverage providers can seek an additional hardship extension by filing a Form 8809.  Notice 2016-70 provides that individual taxpayers do not need to wait to receive the Forms 1095-B and 1095-C before filing their tax-returns.

    The due date for 2016 ACA filings (Forms 1094-B, 1094-C, 1095-B, 1095-B) with the IRS remains February 28, 2017 (or March 31 if filed electronically).   Employers and other coverage providers can request an automatic 30-day extension for filing these forms with the IRS by submitting a Form 8809 before February 28, 2017.  Notice 2016-70 advises that employers and other coverage providers that do not meet the relevant due dates should still furnish and file the forms, even if late, as the Service will take such action into consideration when determining whether to abate penalties for reasonable cause.

    Regarding penalties, Notice 2016-70 extends the good faith standard for providing correct and complete forms that applied to 2015 filings.    The penalty for failure to file a correct informational return with the IRS is $260 for each return for which the failure occurs, with the total penalty for a calendar year not to exceed $3,193,000.  The same level of penalty applies for failure to provide an accurate payee statement.  The good-faith relief applies to missing and inaccurate taxpayer identification numbers and dates of birth, as well as other information required on the return or statement and not to failure to timely furnish or file a statement or return.

    When evaluating good faith, the Service will take into account whether an employer or other coverage provider made reasonable efforts to prepare for reporting, such as gathering and transmitting the necessary data to an agent to prepare the data for submission to the Service.  In addition, the Service will take into account the extent to which an employer or other coverage provider is taking steps to ensure it will be able to comply with reporting requirements for 2017.  No penalty relief is provided in the case of reporting entities that do not make a good-faith effort to provide correct and accurate returns and statements or that fail to file an informational return or furnish a statement by the due dates.

    Treasury and the Service do not anticipate extending this relief with respect to due-dates or good-faith compliance for future years.

    Thursday, November 17, 2016

    secThe Securities Act of 1933 prohibits the offer or sale of securities unless either a registration statement has been filed with the SEC or an exemption from registration is applicable. Although most qualified plan interests qualify for an exemption from the registration requirement, offers or sales of employer securities as part of a 401(k) plan generally will not qualify for such an exemption.  Accordingly, 401(k) plans with a company stock investment option typically register the shares offered as an investment option under the plan using Form S-8.

    On September 22, 2016, the SEC released a Compliance and Disclosure Interpretation addressing the application of the registration requirements to offers and sales of employer securities under 401(k) plans that (i) do not include a company securities fund but (ii) do allow participants to select investments through a self-directed brokerage window.  Open brokerage windows typically allow plan participants to invest their 401(k) accounts in publicly traded securities, including, in the case of a public company employer, company stock.  The SEC determined that registration in this situation would not be required as long as the employer does no more than (i) communicate the existence of the open brokerage window, (ii) make payroll deductions, and (iii) pay administrative expenses associated with the brokerage window in a manner that is not tied to particular investments selected by participants.  This means that the employer may not draw participants’ attention to the possibility of investing in employer securities through the open brokerage window.

    The SEC apparently was concerned that some employers have been advising participants regarding their ability to invest 401(k) plan assets in company securities through open brokerage windows. This might occur, for example, when an employer has decided to remove the company stock fund as an investment option because of concern over potential stock drop litigation; in communicating such a change, the employer might point out to participants that they still have the ability to purchase company stock through the open brokerage window.

    The takeaway for public companies that do not offer a company securities fund in their 401(k) plan but do offer an open brokerage window is clear. They should either assure that communications to 401(k) participants include no reference to the option to purchase company securities through the open brokerage window or, if such communications are desirable, register an appropriate number of securities using Form S-8.

    Wednesday, November 16, 2016

    CC000596In the latest round of ACA and Mental Health Parity FAQs (part 34, if you’re counting at home), the triumvirate agencies addressed tobacco cessation, medication assisted treatment for heroin (like methadone maintenance), and other mental health parity issues.

    Big Tobacco.  The US Preventive Services Task Force (USPSTF) updated its recommendation regarding tobacco cessation on September 22, 2015. Under the Affordable Care Act preventive care rules, group health plans have to cover items and services under the recommendation without cost sharing for plan years that begin September 22, 2016.  For calendar year plans, that’s the plan year starting January 1, 2017.

    The new recommendation requires detailed behavioral interventions.  It also describes the seven FDA-approved medications now available for treating tobacco use.  The question that the agencies are grappling with is how to apply the updated recommendation.

    Much like a college sophomore pulling an all-nighter on a term paper before the deadline, the agencies are just now asking for comments on this issue.   Plan sponsors who currently cover tobacco cessation should review Q&A 1 closely and consider providing comments to the email address marketform@cms.hhs.gov.  Comments are due by January 3, 2017.  The guidance does not say this, but the implication is that until a revised set of rules is issued, the existing guidance on tobacco cessation seems to control.

    Nonquantitative Treatment Limitations. Under applicable mental health parity rules, group health plans generally cannot impose “nonquantitative treatment limitations” (NQTLs) that are more stringent for mental health and substance use disorder (MH/SUD) benefits than they are for medical/surgical benefits.  “Nonquantitative” includes items like medical necessity criteria, step-therapy/fail-first policies, formulary design, etc.  By their very nature, these items are (to use a technical legal term) squishy.

    Importantly for plan sponsors, the agencies gave examples of impermissible NQTLs in Q&As 4 and 5. In Q&A 4, they describe a plan that requires an in-person examination as part of getting pre-authorized for inpatient mental health treatment, but does preauthorization over the phone for medical benefits.  The agencies say this does not work.

    Additionally, Q&A 5 addresses a situation where a plan implements a step therapy protocol that requires intensive outpatient therapy before inpatient treatment is approved for substance use disorder treatment. The plan requires similar step therapy for comparable medical/surgical benefits.  So far, so good.  However, in the Q&A, intensive outpatient therapy centers are not geographically convenient to the participant, while similar first step treatments are convenient for medical surgical benefits.  Under these facts, applying the step therapy protocol to the participant is not permitted.  The upshot, from the Q&A, is that plan sponsors might have to waive such protocols in similar situations.  This particular interpretation will not be enforced before March 1, 2017.

    Substantially All Analysis. To be able to apply a financial requirement (e.g. copayment) or quantitative treatment limitation (e.g. maximum number of visits) to a MH/SUD benefit, a plan must look at the amount spent under the plan for similar medical surgical benefits (e.g. in-patient, in-network or prescription drugs, as just two examples). Among other requirements, the financial requirement or treatment limitation must apply to “substantially all” (defined as at least two-thirds) of similar medical/surgical benefits.

    The details of that calculation are beyond the scope of this post, but Q&A 3 sets out some ground rules. First, if actual plan-level data is available and is credible, that data should be used.  Second, if an appropriately experienced actuary determines that plan-level data will not work, then other “reasonable” data may be used.  This includes data from similarly-structured plans with similar demographics.  To the extent possible, claims data should be customized to the particular group health plan.

    This means that, when conducting this analysis, plan sponsors should question the data their providers are using. If it is not plan-specific data, other more general data sets (such as data for an insurer’s similar products that it sells) may not be sufficient.  Additionally, general claims data that may be available from other sources is probably insufficient on its own to conduct these analyses.

    Medication Assisted Treatment. The agencies previously clarified the MHPAEA applies to medication assisted treatment of opioid use disorder (e.g., methadone). Q&As 6 and 7 provide examples of more stringent NQTLs and are fairly straightforward. Q&A 8 addresses a situation where a plan says that it follows nationally-recognized treatment guidelines for prescription drugs, but then deviates from those guidelines.  The agencies say a mere deviation by a plan’s pharmacy and therapeutics (P&T) committee, for example, from national guidelines can be permissible.  However, the P&T committee’s work will be evaluated under the mental health parity rules, such as by taking into account whether the committee has sufficient MH/SUD expertise.  Like we said, it’s squishy.

    Court-Ordered Treatment. Q&A 9 specifically addresses whether plans or issuers may exclude court-ordered treatment for mental health or substance use disorders. You guessed it — a plan or issuer may not exclude court-ordered treatment for MH/SUD if it does not have a similar limitation for medical/surgical benefits. However, a plan can apply medically necessary criteria to court-ordered treatment.

    The Bottom Line.  The bottom line of all this guidance is that plan sponsors may need to take a harder look at how their third party administrators apply their plan rules.  Given the lack of real concrete guidance, there’s a fair amount of room for second guessing by the government.  Therefore, plan sponsors should document any decisions carefully and retain that documentation.

    Monday, October 31, 2016

    The IRS recently released updated limits for retirement plans.  Our summary of those limits (along with the limits from the last few years) is below.

    Type of Limitation 2017 2016 2015 2014
    Elective Deferrals (401(k), 403(b), 457(b)(2) and 457(c)(1)) $18,000 $18,000 $18,000 $17,500
    Section 414(v) Catch-Up Deferrals to 401(k), 403(b), 457(b), or SARSEP Plans (457(b)(3) and 402(g) provide separate catch-up rules to be considered as appropriate) $6,000 $6,000 $6,000 $5,500
    SIMPLE 401(k) or regular SIMPLE plans, Catch-Up Deferrals $3,000 $3,000 $3,000 $2,500
    415 limit for Defined Benefit Plans $215,000 $210,000 $210,000 $210,000
    415 limit for Defined Contribution Plans $54,000 $53,000 $53,000 $52,000
    Annual Compensation Limit $270,000 $265,000 $265,000 $260,000
    Annual Compensation Limit for Grandfathered Participants in Governmental Plans Which Followed 401(a)(17) Limits (With Indexing) on July 1, 1993 $400,000 $395,000 $395,000 $385,000
    Highly Compensated Employee 414(q)(1)(B) $120,000 $120,000 $120,000 $115,000
    Key employee in top heavy plan (officer) $175,000 $170,000 $170,000 $170,000
    SIMPLE Salary Deferral $12,500 $12,500 $12,500 $12,000
    Tax Credit ESOP Maximum balance $1,080,000 $1,070,000 $1,070,000 $1,050,000
    Amount for Lengthening of 5-Year ESOP Period $215,000 $210,000 $210,000 $210,000
    Taxable Wage Base $127,200 $118,500 $118,500 $117,000
    FICA Tax for employees and employers 7.65% 7.65% 7.65% 7.65%
    Social Security Tax for employees 6.2% 6.2% 6.2% 6.2%
    Social Security Tax for employers 6.2% 6.2% 6.2% 6.2%
    Medicare Tax for employers and employees 1.45% 1.45% 1.45% 1.45%
    Additional Medicare Tax* .9% of comp >$200,000 .9% of comp >$200,000 .9% of comp > $200,000 .9% of comp > $200,000

    *For taxable years beginning after 12/31/12, an employer must withhold Additional Medicare Tax on wages or compensation paid to an employee in excess of $200,000 in a calendar year for single/head of household filing status ($250,000 for married filing jointly).