News

Accounting Standards Group Issues Guidance for Those Conducting ERISA Retirement Plan Audits

The American Institute of Certified Public Accountants (AICPA) has issued a document entitled Forming an Opinion and Reporting on Financial Statements of Employee Benefit Plans Subject to ERISA. The guidance is intended to assist those who conduct audits of financial statements that are part of ERISA-governed retirement plan reporting on Form 5500, Annual Return/Report of Employee Benefit Plan.

An independent financial statement audit requirement applies to an ERISA-governed retirement plan of an employer with 100 or more eligible employees, whether they are contributing to the plan, or not.

The guidance contained in this document is to be implemented for audits of ERISA plan financial statements for periods ending on or after December 15, 2020. The document “addresses the auditor’s responsibility to form an opinion and report on the audit of financial statements of employee benefit plans subject to … ERISA.”  It notes further that the guidance “addresses the significant public interest associated with audits of employee benefit plans subject to ERISA, and was undertaken in consultation with the U.S. Department of Labor.”

 


Washington Pulse: Proposed Treasury Regulations on MEPs a Good Start

The U.S. Treasury Department has released proposed regulations that relax the “unified plan rule” for multiple employer plans (MEPs). Published on July 3, 2019, this guidance was prompted by a 2018 Executive Order that directed the Treasury Department to consider proposing guidance that would expand workplace retirement plans for American workers. This Order specifically noted that providing greater access to MEPs would help achieve this goal. The new rules would provide relief for defined contribution MEPs that include a participating employer that jeopardizes the plan through failure to comply with certain qualified plan rules. Under the existing rules, one noncompliant employer within a MEP can disqualify the entire plan, creating significant problems for the other participating employers. If these proposed regulations become final, they will remove an important compliance hurdle for employers considering—or already in—a MEP.

Why are MEPs Important?

Multiple employer plans generally allow two or more employers to participate in a single retirement plan, which may result in simpler plan administration and reduced costs. These businesses may, for example, have some common ownership that allows—but does not require—the companies to share a single plan. Recognizing the potential benefits of MEPs, the Department of Labor (DOL) and federal legislators have also proposed expanding access to these plans.

 

The MEP concept is simple: some employers may benefit from combining their retirement resources into one plan. Instead of each employer establishing, maintaining, and paying for a separate qualified plan, many employers can participate in a single plan. This means that each participating employer could save time and money by avoiding individual annual plan audits, IRS Form 5500 returns, and ERISA bonds. Additionally, MEP participants may be able to enjoy some savings on plan investments once the plan reaches a certain size. Each participating employer still owes certain fiduciary duties to plan participants, but MEPs typically streamline administration by using a single plan administrator, who assumes overall responsibility for plan compliance and for day-to-day operations.

How Would the Proposed Regulations Help Employers with MEPs?

For the past 40 years, Treasury Regulations have dictated that “the failure by one employer maintaining the plan (or by the plan itself) to satisfy an applicable qualification requirement will result in the disqualification of the MEP for all employers maintaining the plan.” This unified plan rule, sometimes called the “one bad apple rule,” may well have discouraged individual employers from participating in a MEP. The proposed regulations provide an important exception to the unified plan rule. But this relief, if made final, will require the MEP plan administrator to follow a rigorous notification process and extensive follow-up.

Requirements for the Unified Plan Rule Exception

The proposed regulations cite four conditions that the MEP must satisfy in order to avoid plan disqualification on account of a participating employer’s failure. These conditions, listed below, will be described in more detail throughout this Washington Pulse.

  • The MEP must satisfy the general eligibility requirements:
  • The MEP plan administrator must have processes and procedures that are designed to promote overall plan compliance.
  • The MEP plan document must describe the steps that the MEP plan administrator would take to address a participating employer’s compliance failure.
  • The MEP must not be “under examination” by the IRS.
  • The MEP plan administrator must provide detailed notices to the “unresponsive participating employer”—and if no action is taken, to plan participants (and their beneficiaries) and to the DOL’s Employee Benefits Security Administration (Office of Enforcement)—describing the failure and possible remedies.
  • If the participating employer does not remedy the failure or spin off the assets held on behalf of its participants to a single employer plan, then the MEP plan administrator must spin off of those assets into a single employer plan and terminate such plan.
  • The MEP plan administrator must comply with any IRS information request in connection with the spun-off plan assets.

Important MEP Compliance Provisions

The Treasury Department crafted these regulations to promote compliance and to increase coverage of employees by workplace retirement plans. To do so, it has proposed an exception to the unified plan rule, as discussed above, to ensure overall qualification of a MEP plan in spite of the action or inaction of one or more individual participating employers. To achieve its objective, Treasury’s proposed regulations—created in cooperation with the DOL—include many detailed requirements.

 

The MEP plan administrator must create a compliance process—and must include procedures in plan documents. The proposed regulations state that the MEP plan administrator must establish procedures that are designed to promote compliance with federal rules. The proposed regulations also require that the MEP defined contribution plan document itself contain the procedures that the MEP plan administrator will use to address participating employer failures, including failures to take appropriate remedial action. Fortunately, once final regulations are issued, the IRS intends to release a model plan amendment, which will provide clear direction about exactly how much procedural detail must be placed in the plan document.

The MEP plan administrator must provide certain notices. A participating employer becomes an “unresponsive participating employer” when it fails to comply with reasonable MEP plan administrator requests for compliance information—or when it fails to correct a compliance deficiency. At this point, the MEP plan administrator must provide a first notice to this employer, describing

  • the participating employer failure;
  • the remedial actions needed to fix the failure;
  • the employer’s option to initiate a spinoff of the assets and account balances of its participants; and
  • the consequences of failing to remedy the failure, including an involuntary spinoff of the assets and account balances of the employer’s participants, followed by a termination of that spun-off plan.

The MEP plan administrator must provide a second notice if the unresponsive participating employer fails to take remedial action within 90 days of the first notice. This second notice must be provided within 30 days after the first 90-day period ends. The second notice must include all of the information contained in the first notice. But it must also specify that the employer must remedy the failure (or spin off the assets) within 90 days, or the MEP plan administrator will send a notice to the DOL and to the unresponsive participating employer’s plan participants (and their beneficiaries), telling them of the participating employer’s failure and of the consequences of not correcting that failure.

The proposed regulations require a third notice if the employer takes no remedial action within 90 days of the second notice. The MEP plan administrator must provide this notice within 30 days after the second 90-day period ends. The MEP plan administrator must, however, also provide the notice to the unresponsive participating employer’s plan participants (and their beneficiaries) and to the DOL. This notice must include the information required to be in the first notice, plus

  • the deadline for employer action,
  • an explanation of any adverse consequences that a spinoff/termination could create for participants, and
  • a statement that the MEP plan administrator is sending the notice to the unresponsive employer’s participants (and beneficiaries) and to the DOL.

Additional requirements.

  • Spin off and termination. If the unresponsive participating employer doesn’t fix the compliance failure or spin off its participants’ assets, the MEP plan administrator must
  • notify the affected participants (and their beneficiaries) about the spin off-termination details,
  • notify the IRS (further guidance is expected),
  • stop accepting contributions,
  • implement a spinoff of the affected participants’ assets to a separate single-employer plan, and
  • terminate the spun-off plan.
  • Qualification of spun-off plan. The unified plan rule exception in the proposed regulations does not protect the unresponsive participating employer’s plan. Even though the MEP plan may have remained qualified at the time of the spinoff, the spun-off plan’s failure while still part of the MEP will be considered a qualification failure once it has been spun off. Further, the IRS may pursue adverse action against the owner of the participating employer or against any other responsible parties.
  • Favorable tax treatment of participants’ assets upon termination. Generally, assets that are distributed because of the participating employer’s failure will still be treated as eligible rollover distributions.

The Treasury Department is Seeking Comments

With these proposed regulations, the Treasury Department has tried to balance the need for efficient plan administration with the ultimate aim of protecting plan participants and their beneficiaries. Accordingly, it is seeking comments from the public until October 1, 2019, particularly on whether

  • the exception to the unified plan rule should be extended to defined benefit plans,
  • the regulations should include additional requirements for MEPs to be eligible for the exception,
  • the notice requirements should be simplified or the notice period shortened, and
  • there are steps that the DOL should take to help implement the regulations.

The Proposed Regulations and Future MEP Developments

As written today, the proposed regulations provide an important improvement for MEPs. They will protect other participating employers from plan disqualification arising from one “bad apple.” But they cannot be relied on until they are made final. In addition, the regulations do not broaden the base of employers that are eligible to adopt a multiple employer plan.

Pending legislation and proposed DOL guidance could soon alter the MEP landscape. The final DOL “Association Retirement Plan” regulations are expected to be released soon. Like the proposed regulations, the final regulations are expected to provide much needed clarity and would allow a somewhat broader segment of employers to adopt MEPs. The U.S. House of Representative’s Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019—which enjoys bipartisan support—would eliminate the current commonality requirement, thereby creating “open MEPs.” If it becomes law, employers may find it easier to become part of a MEP. So while the Treasury’s proposed regulations may not significantly increase MEP usage on their own, as part of a larger movement toward greater MEP accessibility, they certainly could prove helpful to employers.

Ascensus will closely monitor any new developments regarding this guidance. Visit ascensus.com  for future updates.


SEC Investment Guidance Appears in Today’s Federal Register, Triggering Effective Dates

Today’s Federal Register contains the Securities and Exchange Commission (SEC) final regulations and accompanying guidance for broker-dealers and advisers who provide certain investment services to retail clients. (See Ascensus’ Washington Pulse for more detailed information.) This official publication triggers effective dates contained in the guidance.

The guidance package was released by the SEC on June 5, 2019, and consists of the following items.

  • Regulation Best Interest, which establishes a standard of conduct for broker-dealers when making recommendations to retail customers
  • A new requirement for investment advisers and broker-dealers to provide a client relationship summary (Form CRS) to retail investors
  • An interpretation of the standard of conduct for investment advisers
  • An interpretation of the “solely incidental” prong of the Investment Advisers Act of 1940 that applies to broker-dealers

The guidance package has multiple effective and compliance dates.

Regulation Best Interest and requirements for use of Form CRS become effective 60 days from today’s publication in the Federal Register: September 10, 2019. There is a transition period until June 30, 2020, to give firms sufficient time to achieve full compliance.

The interpretations under the Advisers Act are effective as of today’s publication in the Federal Register.

Text of the Federal Register guidance is below.

SEC Regulation Best Interest

Form CRS Relationship Summary

SEC Interpretation Regarding Standard of Conduct

SEC Interpretation Regarding “Solely Incidental”

 


Ascensus President David Musto to Assume Chief Executive Officer Responsibilities in 2020, Bob Guillocheau to Remain Chairman

Dresher, PA — Ascensus—whose technology, expertise, and collaborative partnership help more than nine million people save for retirement, education, and healthcare—announced today that David Musto, currently president of the organization, will add chief executive officer (CEO) responsibilities to his role, effective January 1, 2020Bob Guillocheau, currently chairman and CEO of Ascensus, will continue to serve as chairman.

“I’m delighted that David will soon be leading our organization forward as CEO,” said Guillocheau. “His deep industry perspective, expertise, and leadership skills are exactly what we need to take Ascensus to the next level and grow our competitive advantage.”

Musto added, “I’m honored by the opportunity to build on what Bob has achieved for Ascensus. Our commitment to our clients, partners, and associates has never been stronger, and our investments in our capabilities and services will only continue to grow.”

Musto joined Ascensus in 2017. As president, he is responsible for growing the company’s existing businesses. With more than 30 years of experience in financial services, he previously served as president of Great-West Investments, executive vice president of Empower Retirement, and CEO of J.P. Morgan Retirement Plan Services. His early career spans executive roles with Prudential Financial, CIGNA, and Kamoon, a start-up financial software company. Musto earned an MBA in Finance and International Business from NYU-Stern School of Business and a BBA in Finance from The College of William and Mary.

Guillocheau is a financial services industry veteran with more than 35 years of experience. He joined the company in 2003 and has held the role of CEO since 2005. Guillocheau was named chairman in 2017. Previously, he was executive vice president and general manager of First Data Retirement Services, chief operating officer of ChannelWave, and chief financial officer for Mellon Bank’s Mutual Fund Services Group. He holds a B.S. in Economics and Accounting from The College of the Holy Cross.

 

About Ascensus
Ascensus is the largest independent recordkeeping services provider, third-party administrator, and government savings facilitator in the United States. The firm delivers technology and expertise to help millions of people save for what matters most—retirement, education, and healthcare. For more information about Ascensus, visit ascensus.com. View career opportunities at careers.ascensus.com.


IRS Issues Proposed Regulations for Multiple Employer Plans

Today’s edition of the Federal Register contains the official version of new IRS proposed regulations on multiple employer plans (MEPs). Under such arrangements several employers elect to participate in a common plan. Objectives of these arrangements can include sharing of administrative burden and cost, and centralizing certain plan operation functions.

The new proposed guidance would revise 1979 IRS final regulations on MEPs. One key revision being proposed would address the so-called “bad apple” rule, under which an entire MEP could fail to meet qualification requirements because of a compliance failure by one employer. This is known as the “unified plan rule.” These regulations propose an exception to the unified plan rule, and—if certain requirements are met—compliance failures by individual participating employers need not jeopardize the entire MEP.

Public comments may be submitted for a 90-day period that will end October 1, 2019.


House-Passed Financial Services Bill Would Block SEC Investment Guidance

The U.S. House of Representatives this week approved legislation to provide appropriations for funding various financial services provided by federal agencies. Added to the bill before its passage was an amendment by House Financial Services Committee Chair Maxine Waters (D-CA) that would block federal funding for administration and enforcement of guidance recently issued by the Securities and Exchange Commission (SEC). The vote was largely along party lines in the Democrat-controlled House.

Targeted by this amendment was the SEC’s recently finalized Regulation Best Interest and accompanying guidance, which provide standards of conduct for broker-dealers in making investment recommendations to retail customers. Elements of the guidance also impact registered investment advisors. In addition to retail investment accounts, the SEC guidance also applies to investment recommendations made for an individual’s own account in an employer-sponsored retirement plan, or an IRA, health savings account (HSA), Archer medical savings account (MSA), IRC Sec. 529 plan, or Coverdell education savings account (ESA).

Rep. Waters and others have criticized the SEC guidance as allegedly being insufficient to protect investor interests. This guidance generally is considered less restrictive than Department of Labor fiduciary investment advice guidance that was vacated by an appeals court in June of 2018.

Because appropriations bills must be identical in House and Senate versions, and there is a Republican majority in the Senate, many feel that de-funding the SEC investment guidance is unlikely to ultimately occur. The Senate has not yet taken up financial services appropriations.


Washington Pulse: Joint Effort Leads to New Health Reimbursement Arrangement Guidance

The U.S. Departments of Health and Human Services, Treasury, and Labor have jointly issued final regulations that create two new types of HRAs—the Individual Coverage HRA (ICHRA) and the Excepted Benefit HRA (EBHRA). The final regulations, which are applicable to plan years on or after January 1, 2020, are meant to give employers and employees more options when purchasing health insurance and covering out-of-pocket expenses. This guidance was issued in response to the President’s Executive Order, released in October 2017.

 

Certain HRA Definitions and Rules Apply

HRAs are defined as employer-funded accounts used by employees to help pay for out-of-pocket medical expenses. HRAs can cover employees as well as their spouses and dependents. Employees cannot simply take an HRA distribution on their own. They must substantiate their claims and submit the claims to their employer. The employer must then determine if the substantiation is sufficient for reimbursement.

HRAs are generally subject to COBRA and ERISA—including the plan document, summary plan description, and Form 5500 reporting requirements.

 

General ICHRA Requirements

The ICHRA is unique because the Affordable Care Act (ACA) previously prevented integrating HRAs with individual health insurance. The regulations now permit this integration—allowing employees to purchase individual health insurance on their own and to receive ICHRA reimbursements to help pay for the premiums (including Medicare and Medicare supplemental premiums) and any other qualified medical expenses under IRC Sec. 213(d).

While the ICHRA may be subject to ERISA, the regulations provide a safe harbor that exempts individual health insurance from the complex ERISA rules applicable to employer-sponsored plans—as long as the employer takes certain administrative steps. The regulations specify the employer cannot force the purchase of any individual health insurance, endorse a particular insurance carrier or plan, or receive any compensation in connection with an employee’s selection.  The employer must also provide an annual notice to employees that the individual health insurance is not subject to ERISA.

Here is a brief summary of the most significant ICHRA requirements:

  • Before receiving an ICHRA reimbursement, employees must provide proof of enrollment in an individually purchased health insurance plan (whether purchased on the Exchange or not). The final regulations identify Medicare and student health insurance as eligible individual health insurance.
  • The employer generally cannot offer a traditional group health plan and an ICHRA to the same class of employees. Classes that employees can be divided into are limited, but include full-time, part-time, seasonal, or geographic locations. Certain minimum class-size requirements may apply, with minimums ranging from 10-20 employees depending on employer size.
  • The employer must offer the same ICHRA terms to all employees in a class; but the employer may vary the amounts it contributes to employees within each class based on the employee’s age, the number of dependents who will be covered, or because of late enrollment during the plan year.
  • The employer will not violate the “same terms” requirement by offering an HSA-compatible ICHRA or a traditional ICHRA to the same class of employees.
  • The employer may determine the plan design. This includes the contribution amount, the maximum reimbursement per month, and the eligible expenses. The employer may choose to reimburse premiums only, IRC Sec. 213(d) expenses only, or both.
  • Employees must be allowed to opt out of the ICHRA before each plan year and also upon termination from employment (if remaining amounts are not forfeited).
  • The ICHRA will be subject to COBRA if the loss of ICHRA coverage is due to a qualifying event. An employee’s failure to maintain individual health insurance is not a qualifying event.

 

Factors to Consider Before Offering an ICHRA

Employers should consider a number of factors—some of the biggest takeaways are described below.

 

ICHRA Affordability Requirement

Employers that are subject to the ACA mandate (employers with 50 or more full-time employees) must provide minimum essential coverage (MEC) that is available to at least 95 percent of their employees and is affordable. Employers offering an ICHRA do not need to be concerned with the MEC requirements: employees must certify that the individual health insurance they purchase meets those requirements.

Employers offering an ICHRA do need to consider whether the ICHRA is affordable. An employer that is subject to ACA and sponsors an ICHRA that is not deemed affordable for enough employees could be subject to penalties. Determining affordability for individual employees could be burdensome to an employer because it would require a calculation based on each employee’s household income compared to the lowest cost silver plan in the employee’s rating area.

The IRS issued proposed safe harbors in Notice 2018-88 in order to provide guidelines applicable to ICHRA affordability determinations. The final regulations also specify that more guidance will be provided, which should make the affordability determination even more straightforward for employers.

 

ICHRA Notice and Substantiation Requirements

Because of the ICHRA individual coverage requirement, employers and employees are subject to the following notice and coverage substantiation requirements. These notice requirements do not apply to other HRAs.

  • Employees must annually verify that they have coverage under individual health insurance at the time of open enrollment. Employees can meet this requirement by completing a “model attestation” provided by the Department of Labor (DOL).
  • Employers must require coverage substantiation from the employee with each request for reimbursement. To meet this requirement, employees can complete a second model attestation provided by the DOL.
  • Employers generally must provide a notice to eligible employees 90 days before the beginning of the plan year (generally by October 2 of each year). Among other things, the notice must
    • include information on the ICHRA,
    • explain that the employee’s individual health insurance is not subject to ERISA, and
    • explain the interaction between the ICHRA and the premium tax credit (PTC).

This notice is important for employees because they will use the information to help determine if they should 1) enroll in the ICHRA, or 2) decline to participate in the ICHRA in order to take advantage of the PTC. (Employees who enroll in the ICHRA are not eligible for the PTC.)

Employers may use the DOL’s model notice to meet this requirement.

 

When an ICHRA Might Make Sense

Adopting ICHRAs may make sense both for large employers looking for more affordable healthcare options and for small employers who normally couldn’t afford to provide healthcare coverage. Two examples are described below.

Large Employer Example: ABC Company operations concentrate in State X, but it also maintains smaller operations in State Y and State Z. ABC Company provides group health plan coverage to its employees living in State X. ABC Company’s small number of employees in State Y and State Z makes it difficult to obtain group insurance coverage in those regions. ABC Company decides to maintain the group health plan for its State X-based employees, and to offer a new ICHRA to its employees in State Y and State Z, which have a different rating area than State X. As a result, the newly created ICHRA benefits the employees in State Y and State Z and allows ABC Company to extend health coverage to all its employees regardless of location.

Small Employer Example: XYZ Company has determined that it cannot afford to provide a group health plan to its 10 employees. Instead, XYZ has decided to offer an ICHRA to all employees. This will help each employee defray some of the cost of purchasing individual health insurance obtained from an Exchange.

 

General EBHRA Requirements

The new “Excepted Benefit HRA (EBHRA)” needs some clarification because of its name. Created by the regulations, the EBHRA is different from HRAs that reimburse only for excepted benefits. Employees may use the new EBHRA to pay for all medical expenses, even ones that are not excepted benefits—including amounts owed as a result of the cost sharing provisions of individual health insurance or group health insurance. EBHRAs must comply with these main requirements.

  • The employer must offer group health insurance, but an employee does not have to enroll in the group plan. The employer must have a waiver of coverage on file for each employee that is enrolled in the EBHRA.
  • The EBHRA is subject to an annual contribution limit ($1,800 for plan year 2020). For plan years beginning after December 31, 2020, the annual contribution limit may be indexed for cost-of-living adjustments. Employees may carry over unused EBHRA amounts to the following plan year: these amounts will not count toward the annual contribution limit.
  • EBHRAs generally cannot reimburse premiums for health insurance (an exception applies for COBRA or other coverage continuation premiums). Employees may receive EBHRA reimbursements for all other IRC Sec. 213(d) medical expenses—including premiums for excepted benefits like vision or dental insurance and short-term limited duration insurance.
  • Employers must offer an EBHRA on the same basis to all “similarly situated individuals”; the employer can treat separate groups of employees differently, but they must be grouped based on bona fide employment-based classifications and not on factors like medical history or health status.
  • An EBHRA is subject to COBRA if it provides an annual benefit of more than $500.

 

Next Steps

Employers that decide to offer an ICHRA or EBHRA should ensure that their human resources departments (and other affected associates) are trained on the new HRA requirements—including requirements for providing ICHRA notices and obtaining additional substantiation. They should also be prepared to answer employee questions.

Those seeking additional information on the final regulations may review a DOL news release and a set of FAQs. Ascensus will closely monitor any new developments regarding this guidance. Visit ascensus.com for future updates.

 

Click here for a printable version.

 


Ascensus Continues Expansion in Benefits Administration Space with Agreement to Acquire HR Simplified

Firm’s Burgeoning Health and Benefits Line of Business Extends Geographic Footprint and Builds Upon Expertise in Consumer-Directed Health and Benefit Continuation Services

Dresher, PA — Ascensus—whose technology and expertise help millions of people save for retirement, education, and healthcare—has entered into an agreement to acquire HR Simplified, a third-party administration (TPA) firm that services consumer-directed health (CDH) plans and provides COBRA administration. HR Simplified’s offerings include health savings accounts, flexible spending accounts, health reimbursement arrangements, pre-tax commuter benefit programs, along with other benefit continuation services. It will immediately become part of Ascensus’ Health and Benefits line of business.

HR Simplified, which is based in Minneapolis, MN, has been providing national employee benefit administrative solutions since 1997. The firm offers a full suite of pre-tax spending account administration options, COBRA & retiree billing solutions, and employee benefit compliance services, providing clients with access to exceptional service, technology, and educational materials at both the employer and participant levels.

“HR Simplified is a well-regarded firm that is renowned for offering a ‘no noise’ approach to benefits administration and serving their clients with passion, enthusiasm, and integrity,” states David Musto, president of Ascensus. “When combined with the fact that they’ve developed and cultivated a solid reputation for reliability and dependability, it’s easy to understand why we believe that they’ll play an important role in the growth of Ascensus’ Health and Benefits line of business.”

“I’ve always stated that the foundation of HR Simplified’s success is the human touch,” says Mike Melnychuk, HR Simplified’s president. “In Ascensus, we’ve found an organization that will allow us to continue to offer the very best in benefits administration; they share our dedication to providing excellent service and finding solutions that best fit clients’ needs.”

“We’re delighted to welcome HR Simplified to Ascensus not only because of their great associates and their strong knowledge base, but also because the firm is a strong cultural fit,” says Raghav Nandagopal, Ascensus’ executive vice president of corporate development and M&A. “In addition to the recent acquisitions of Chard Snyder, BPC, and Wrangle, HR Simplified is another example of our ongoing commitment to building a national CDH and benefits administration business.”

 

About Ascensus
Ascensus is the largest independent recordkeeping services provider, third-party administrator, and government savings facilitator in the United States. The firm delivers technology and expertise to help millions of people save for what matters most—retirement, education, and healthcare. For more information about Ascensus, visit ascensus.com. View career opportunities at careers.ascensus.com.


PBGC Proposes Corrections, Clarifications, and Improvements to Certain DB Plan Guidance

Soon to be published in the Federal Register are proposed changes to Pension Benefit Guaranty Corporation (PBGC) regulations on defined benefit (DB) plan reportable events, disclosure requirements, annual financial and actuarial information reporting, single employer plan terminations, and PBGC premium rates.

PBGC, the federal agency with primary oversight of, and providing insurance for, certain DB plans, describes the proposed technical corrections, clarifications, and improvements as motivated by its “ongoing retrospective review of the effectiveness and clarity of its rules, as well as input from stakeholders.”

Public comments on the proposed changes will be accepted for a 60-day period that will begin upon their publication in the Federal Register. A pre-publication version of this guidance is available here.


President’s Executive Order Would Affect HSAs, FSAs, HRAs

On June 24, 2019, President Trump signed an Executive Order designed to “enhance the ability of patients to choose the healthcare that is best for them.”

The order has multiple directives that touch on different aspects of healthcare. It includes a request for the Department of Health and Human Services to produce a report on steps that the administration may take to eliminate surprise medical billing. It also instructs multiple departments to issue guidance on topics such as increasing price transparency for medical services, and developing rules to expand the use of health savings accounts (HSAs), health flexible spending arrangements (FSAs), and health reimbursement arrangements (HRAs).

The order specifically directs the Secretary of the Treasury to do the following.

  • Issue guidance that would permit HSA-compatible high deductible health plans to cover certain costs for individuals with chronic conditions before satisfying the plan deductible
  • Propose regulations that would expand eligible medical expenses under Internal Revenue Code Section 213(d) to include direct primary care arrangements and healthcare sharing ministries
  • Issue guidance that would increase the permitted FSA carryover amount (currently limited to $500)

The order places deadlines ranging from 120 to 180 days for the Treasury Department to produce the relevant guidance.

Watch Ascensus.com for any further information about this extensive guidance.