IRS Increases Mileage Rates through Dec. 31, 2008

IR-2008-82, June 23, 2008

WASHINGTON — The Internal Revenue Service today announced an increase in the optional standard mileage rates for the final six months of 2008. Taxpayers may use the optional standard rates to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

The rate will increase to 58.5 cents a mile for all business miles driven from July 1, 2008, through Dec. 31, 2008. This is an increase of eight (8) cents from the 50.5 cent rate in effect for the first six months of 2008, as set forth in Rev. Proc. 2007-70.

In recognition of recent gasoline price increases, the IRS made this special adjustment for the final months of 2008. The IRS normally updates the mileage rates once a year in the fall for the next calendar year.

“Rising gas prices are having a major impact on individual Americans. Given the increase in prices, the IRS is adjusting the standard mileage rates to better reflect the real cost of operating an automobile,” said IRS Commissioner Doug Shulman. “We want the reimbursement rate to be fair to taxpayers.”

While gasoline is a significant factor in the mileage figure, other items enter into the calculation of mileage rates, such as depreciation and insurance and other fixed and variable costs.

The optional business standard mileage rate is used to compute the deductible costs of operating an automobile for business use in lieu of tracking actual costs. This rate is also used as a benchmark by the federal government and many businesses to reimburse their employees for mileage.

The new six-month rate for computing deductible medical or moving expenses will also increase by eight (8) cents to 27 cents a mile, up from 19 cents for the first six months of 2008. The rate for providing services for charitable organizations is set by statute, not the IRS, and remains at 14 cents a mile.

The new rates are contained in Announcement 2008-63 on the optional standard mileage rates.

Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

By Ric Joyner, CEBS, GBA, CFCI

LiveJournal Tags: COBRA,Health Insurance,Brokers,Insurance

You won’t want to miss this seminar. We have developed a seminar that will focus on the Landmines of COBRA and the pitfalls that brokers, employers, and employees can experience if not aware.

Stay out of Court!

This seminar is part of eflex’s continuing education seminar for clients.

The time allotted for this seminar is 1.5 hours.

Who should attend:

Employers, Brokers, and Broker Clients.

What you will learn. The Agenda is as follows:

COBRA and Employer responsibilities

• COBRA and Employee Responsibilities
• COBRA and Broker Responsibilities
• Checklist for each group to cover with their constituency
• Case Law and How the Courts view COBRA
• Should you outsource? Pros and Cons

Bring your clients and your staff.

Seminar information:

Registration Link: https://www1.gotomeeting.com/register/548457286

By Ric Joyner

Kevin Knopf of the Treasury, speaking last Friday at the NAPBA.org Owners Conference, indicated to attendees that the Treasury has recently said publicly that the implementation of the New Cafeteria Final Regulations will be 2010. “The new regulations will likely appear toward the end of 2008 versus mid-summer which won’t give much time for implementation and document changes until 2010″.

NAPBA is in full review of other comments made on some of the issues related to non-discrimination testing, penalties for non compliance, and HSAs. We are  hoping to have a pod cast on www.benefitblog.com within 2 weeks.

Used with permission 6-3-08 (please do not forward outside of your organization)

CDHealthWire June 3, 2008

[Consumer Driven Market Report] A new EBRI analysis of the required savings to meet retiree health costs shows that many older workers can save enough in an HSA to cover post-65 health costs even if starting as late as age 55. The median savings needed is $102,000 for a man and $137,00 for a woman, assuming no employer retiree coverage. If the employer provides some coverage it’s $64,000 and $86,000.

The maximum HSA contribution for over-55 individuals with family coverage this year is $6,700. If that contribution is made every year with 5% in account income the HSA reaches over $84,000 by age 65, a good portion of retiree health needs based on the new estimate.

All available studies including the GAO report to Congress show that HSA contributions are exceeding HSA distributions by a large amount, even in early populations. This paves the way for the argument that HSAs are a valid retiree health model for a portion of U.S. workers.

The new numbers are important though because many benefits consultants, banks, and carriers are seeing fast-rising demand from employers for some form of defined contribution combined with HSAs for pre-retirees to try and capitalize future retiree health spending.

For example, an employer wanting to provide retiree health benefits but not a full defined benefit plan can simple make maximum HSA contributions to 55-year-old workers for 10 years and reach the savings needed to cover most out-of-pocket costs for the employee during retirement. If HSAs are started all workers by an employer with the average workforce age of 42, all out-of-pocket costs can be covered.

This model is already catching on with employers using VEBAs, a form of pre-retiree funding based on HRAs that roll over and accumulate. So far HSAs have not been as broadly discussed as an employer solution, but with HSAs now reaching 10 million some employer RFPs for next year are citing HSAs and VEBAs as something insurers must offer.

Law Professor Larry Grudzien outlined the key elements of WELLNESS programs for brokers and employers.

The seminar is available at this link for your review: Wellness Webinar

The DOL Checklist is available at this link: DOL ERISA Compliance, DOL HIPAA Compliance

Used with permission 5-21-08

Today, President Bush signed the Genetic Information Nondiscrimination Act of 2008 (“GINA”), which Congress passed in late April. GINA sets forth new nondiscrimination prohibitions that apply to group health plans and employers.  GINA applies not only to genetic testing, but also to genetic information and will have broad reaching implications for employers and employer-sponsored wellness programs. Attached are two Legal Alerts - one addressing the health plan implications of GINA and the other addressing the employment law implications of GINA.  If you have any further questions, please feel free to contact me.

Mark L. Stember
Kilpatrick Stockton LLP
607 - 14th Street, NW, Suite 900
Washington, DC 20005-2018
202.508.5802 (P)
202.585.0018 (F)
mstember@kilpatrickstockton.com

LABOR & EMPLOYMENT
MAY 21, 2008
New Federal Law Prohibits Employment Discrimination Based on Genetic Information Genetic testing can identify predisposition to a wide range of diseases and conditions, allowing individuals to take action with respect to potential medical conditions early, when preventive measures and treatment are most likely to succeed. However, many individuals have shied away from utilizing genetic tests for fear that they could be subject to discrimination on the basis of the results. In a move aimed at reducing such fears, Congress recently enacted the Genetic Information Nondiscrimination Act by overwhelming majorities in both the House and the Senate.

President Bush signed the Act on May 21, 2008, and the new law will go into effect 18 months after that date.

GINA EB ALERT

GINA Employment Alert

Provisions of the Act Related to Employment Discrimination
The purpose of the Genetic Information Nondiscrimination Act (the “Act”) is to prevent discrimination in health insurance and employment based on genetic information.

With respect to employment, Title II of the Act prohibits covered employers from discriminating against applicants and employees on the basis of genetic information in much the same way that Title VII of the Civil Rights Act of 1964 prohibits discrimination on account of race, sex, or other protected factors. The Act applies to persons and entities that qualify as employers under Title VII (basically, those with fifteen or more employees), as well as employment agencies and labor organizations. Covered employers may not discharge, fail or refuse to hire, or otherwise discriminate against an individual with respect to compensation, terms, conditions, or privileges of employment because of genetic information with respect to the individual. The Act further prohibits the limitation, segregation, or classification of employees in such a way “that would deprive or tend to deprive any employee of employment opportunities or otherwise adversely affect the status of the employee as an employee, because of genetic information
with respect to the employee.”
http://www.kilpatrickstockton.com/publications/legal-alert.aspx?ID=222

(1 of 3) [5/21/2008 5:02:24 PM]
Kilpatrick Stockton LLP: New Federal Law Prohibits Employment Discrimination Based on Genetic Information

The Act also prohibits the acquisition of genetic information about an employee or his or her family member by request, requirement, or purchase. However, an employer will not be penalized for genetic information learned :

(1) by reading a magazine or publication,

(2) through health or genetic services offered as part of a wellness program, provided the employee has given prior written authorization and any genetic information disclosed to the employer in connection with the program is in the aggregate so that it does not identify the individual,

(3) inadvertently from medical history information, or (4) in response to a request for information to comply with the certification requirements of the Family and Medical Leave Act. Employers may lawfully obtain genetic information to monitor the genetic effects of exposure to hazardous workplace substances, provided they comply with certain disclosure, consent, and monitoring standards. Finally, the Act mandates the confidentiality of genetic information, permitting disclosure only in the following circumstances:

(1) in response to a court order,

(2) as part of a governmental investigation,

(3) to the employee or a labor organization at the written request of the employee, or

(4) in other very limited circumstances specified in the Act.

An employee or applicant who believes that an employer has violated the employment discrimination provisions of the Act has essentially the same remedies as individuals alleging a violation of Title VII, including a right to recover compensatory and punitive damages subject to certain statutory caps. However, the Act specifically excludes a cause of action for disparate impact discrimination – that is, a claim that a facially neutral policy or practice disproportionately affects individuals in the protected class. The Act also addresses discrimination in health insurance based on genetic information.

Please refer to the Kilpatrick Stockton Employee Benefits Legal Alert entitled “Landmark Genetic Nondiscrimination Legislation” for an in-depth analysis of Title I of the Act, which applies to group health plans and health insurers offering health coverage. Other Employment-Related Provisions In addition to addressing the use of genetic information by employers, labor organizations, employment agencies, and insurers, the Act contains a totally unrelated provision amending
the child labor provisions of the Fair Labor Standards Act (“FLSA”). This provision increases the maximum employer penalties for violations involving the FLSA’s oppressive child labor provisions or its child labor safety requirements. The new maximum penalty is $11,000 for each employee who was the subject of such violation. Additionally, the provision adds a $50,000 penalty for each violation that causes the death or serious injury of any employee under the age of eighteen. The $50,000 penalty may be doubled for repeated or willful violations.
Practical Implications Although many states have already enacted similar legislation, the Genetic Information http://www.kilpatrickstockton.com/publications/legal-alert.aspx?ID=222

(2 of 3) [5/21/2008 5:02:24 PM]
Kilpatrick Stockton LLP: New Federal Law Prohibits Employment Discrimination Based on Genetic Information

Nondiscrimination Act creates a federal baseline for protection against employment discrimination based on genetic information. Employers should update their policies prohibiting employment discrimination and addressing the confidentiality of employee information to reflect the new federal law. Employers that sponsor employee wellness programs should also review those programs to ensure that they comply with the confidentiality provisions of the Act insofar as genetic information is concerned.

By Ric Joyner, CEBS, GBA, CFCI

del.icio.us Tags: News,Taxes,Tax,IRS,HSA,Health Savings Account,Employer,Employee

The IRS released today the indexing amounts for HSAs. The body of the indexing language:

Administrative, Procedural, and Miscellaneous

26 CFR 601.602: Tax forms and instructions. (Also: Part 1, §§ 1, 223.) Rev. Proc. 2008-29

SECTION 1. PURPOSE
This revenue procedure provides the 2009 inflation adjusted amounts determined
under § 223(g) of the Internal Revenue Code for Health Savings Accounts (HSAs).

SECTION 2. 2009 INFLATION ADJUSTED ITEMS
Annual contribution limitation. For calendar year 2009, the annual limitation on deductions under § 223(b)(2)(A) for an individual with self-only coverage under a high deductible health plan is $3,000.

For calendar year 2009, the annual limitation on deductions under § 223(b)(2)(B) for an individual with family coverage under a high deductible health plan is $5,950. High deductible health plan. For calendar year 2009, a “high deductible health plan” is defined under § 223(c)(2)(A) as a health plan with an annual deductible that is
2.
not less than $1,150 for self-only coverage or $2,300 for family coverage, and the annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) do not exceed $5,800 for self-only coverage or $11,600 for family coverage.

SECTION 3. EFFECTIVE DATE
This revenue procedure is effective for calendar year 2009.

SECTION 4. DRAFTING INFORMATION
The principal author of this revenue procedure is Marnette M. Myers of the Office
of Associate Chief Counsel (Income Tax & Accounting). For further information
regarding § 223 and HSAs, contact Elizabeth Purcell at (202) 622-6080 (not a toll free
call). For further information regarding the calculation of the inflation adjustments in this
revenue procedure contact Ms. Myers at (202) 622-4920 (not a toll free call).

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Wellness Seminar!

This is a free seminar for eflexgroup clients. We are pleased to bring Larry Grudzien, Professor of Law to share with you the pitfalls, benefits, and compliance issues regarding wellness programs.

The seminar is May 29th at 2.00pm CST.

If you are a client of eflexgroup, click to register for the free seminar.

The cost for non-clients is $85.

Fill out this pdf then register here for the seminar.

We encourage you to send this to your friends and colleagues.

More about the seminar

Consumer Driven Health Care is the new foundation of our employee benefit programs. Wellness promises to reduce costs for future benefit premiums and as the milk commercial used to say, "Does a Body Good."

Does your firm currently have a wellness program? What are the legal issues? Are you in compliance? What are the ERISA, IRS, State Laws, and the Dept. of Labor saying?

Contemplating a wellness program? This seminar will be invaluable in your proactive planning. You can’t afford to miss it! Besides, it’s free….

Wellness is part of our ongoing free educational series for our clients. If you are not an eflexgroup or ecobradmin customer, the cost is $85.

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CCH® PAYROLL — 4/30/08

The IRS has issued final regulations providing guidance on employer comparable contributions to Health Savings Accounts (HSAs) under Code Sec. 4980G< where an employee has not established an HSA by December 31 and where an employer accelerates contributions for the calendar year for employees who have incurred qualified medical expenses. The regulations are effective on April 17, 2008, and apply to employer contributions made for calendar years beginning on or after January 1, 2009. However, employers may rely on this guidance beginning on or after April 17, 2008.

Comparable contributions

An excise tax is imposed under Code Sec. 4980G on an employer that fails to make comparable contributions with respect to the HSAs of its employees. In order to comply with the comparable contribution requirements with respect to employees who have not established HSAs by December 31 (or have not informed the employer of their HSAs), the regulations impose a notice requirement and a contribution requirement. The regulations also include several examples to illustrate these requirements.

To satisfy the notice requirement, the employer must provide all such employees with written notice by January 15 of the following year which explains that comparable contributions will be made for each eligible employee who establishes an HSA and informs the employer by the last day of February. The notice may be delivered electronically. The final regulations include sample language that employers may use for their notices.

To satisfy the contribution requirement, the employer must make the comparable contributions by April 15. In determining the amount of the contributions, the employer must take into account each month that the employee was a comparable participating employee, plus interest.

Accelerated contributions

The final regulations also allow an employer to accelerate part or all of its contributions for the entire calendar year to the HSAs of employees who have incurred qualified medical expenses during that year that exceed the employer’s cumulative HSA contributions at the time of the acceleration. Accelerated contributions must be available on an equal and uniform basis to all eligible employees throughout the calendar year. Also, employers must establish reasonable uniform methods and requirements for the acceleration of contributions and the determination of medical expenses. However, the employer is not required to contribute interest on accelerated or non-accelerated contributions.

Other issues

Employers are cautioned that the final regulations concern only Code Sec. 4980G. Other statutes, such as the Health Insurance Portability and Accountability Act of 1996 (P.L. 104-191) may impose additional requirements. (T.D. 9393, 73 FR 20794, April 17, 2008.)

By Ric Joyner

I was conducting research for a client on ERISA reporting, and came across this well done document by the Dept of Labor.

This guide will provide you with most reporting requirements, and compliance answers.

Enjoy! http://www.dol.gov/ebsa/pdf/rdguide.pdf

To get a handy resource for ERISA go here: http://www.dol.gov/compliance/laws/comp-erisa.htm#CA_Materials