Posts made in April 2018

IRS Issues Guidance FAQs Regarding the Paid Family Leave Federal Tax Credit

The Internal Revenue Service (IRS) issued FAQ guidance regarding an employer tax credit for paid family and medical leave. As a reminder, the Tax Cuts and Jobs Act of 2017 (the Act) provides a tax credit to employers that voluntarily offer paid family and/or medical leave to employees. The IRS FAQs clarify some of the requirements that an employer’s paid family and/or medical leave policy must include to receive the credit. The FAQs also clarify other details, such as the basis for the credit and the tax credit’s impact on an employer’s deduction for wages paid to an employee who is on a qualifying leave.  The tax credit is generally effective for wages paid in taxable years of the employer beginning after December 31, 2017. It is not available for wages paid in taxable years beginning after December 31, 2019.

https://www.irs.gov/newsroom/section-45s-employer-credit-for-paid-family-and-medical-leave-faqs

More Mental Health Parity Guidance

The governmental agencies (DOL, HHS, and IRS) have proposed additional FAQs on mental health parity implementation, along with a revised participant disclosure form and other guidance.  Under a federal law called the Mental Health Parity and Addiction Equity Act (MHPAEA), many health plans and insurers must make sure that there is “parity” between mental health and substance use disorder benefits, and medical and surgical benefits. This generally means that treatment limits applied to mental health and substance use disorder benefits must be at least as generous as the treatment limits applied to medical and surgical benefits. In other words, treatment limits cannot be applied to mental health and substance use disorder benefits unless those limits are comparable to limits applied to medical and surgical benefits. The types of limits covered by parity protections include:

  • Financial requirements – such as deductibles, copayments, coinsurance, and out-of pocket
    limits;
  • Treatment limits– such as limits on the number of days or visits covered, or other limits
    on the scope or duration of treatment (for example, being required to get prior
    authorization to get treatment).

Employer and plan administrators can use the self-compliance tool for MHPAEA to determine whether their plans comply with these regulations. The Department of Labor (DOL) investigators also use this same checklist for compliance audits of MHPAEA.

Proposed FAQ’s: https://www.dol.gov/sites/default/files/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-39-proposed.pdf

Revised Disclosure Form: https://www.dol.gov/sites/default/files/ebsa/laws-and-regulations/laws/mental-health-parity/mhpaea-disclosure-template-draft-revised.pdf

Self-Compliance Tool for MHPAEA: https://www.dol.gov/sites/default/files/ebsa/about-ebsa/our-activities/resource-center/publications/compliance-assistance-guide-appendix-a-mhpaea.pdf