The legislative changes in recent years impact human resources and small businesses in a variety of ways. We know the political climate is chaotic right now, especially when it comes to healthcare. Following are some important human resource updates that have been announced out of Washington recently. Included in this article are routine annual increases in health care coverage limits and minimums, as well as some rather significant IRS and EEOC updates regarding the Affordable Care Act (ACA) and the Equal Pay Act (EPA).
ACA Employer Shared Responsibility Provisions (ESRP)
On April 7, the Treasury Inspector General for Tax Administration (TIGTA) issued a report that suggests when the IRS might begin sending ACA ESRP notices.
Although employers have concluded ACA reporting for 2015 and 2016, the IRS is backlogged for many reasons, and has not yet issued any ESRP fine notices. However, employers may expect to see notices for the 2015 reporting year in the next few months, and should prepare to analyze these notices for errors and respond in a timely manner. Proposed ESRP notices for 2016 should also be expected later this year, although timing remains uncertain.
Further, companies should continue accurate and timely ACA reporting to avoid additional significant penalties for non-filing, late filing, filing in non-electronic form, or incorrect information. Currently, other healthcare legislation continues to be debated.
New Equal Pay Form from Equal Economic Opportunity Commission (EEOC)
In September 2016, the EEOC issued a revised form for the annual EEO-1 report to include W-2 earnings and hours worked by race, ethnicity, and gender. These new categories increase the number of entries significantly, from 140 potential data elements to 3,360, seriously increasing reporting complexity.
Employers with 100 or more employees will be required to file the new EEO-1 report by March 2018 for the 2017 calendar year. In order to collect the additional data required for the updated EEO-1 report, it may be necessary to coordinate between Human Resources and Payroll functions as well as time-keeping systems. The time to start is now.
Beyond reporting the required information, many employers will be expected to proactively conduct a more thorough pay equity analysis. The new form does not take into consideration years of experience, education and vocational background, or other factors that may account for pay differences. A pay equity analysis will allow a company to account for those factors.
Annual Health Plan Adjustments from the IRS
On May 4, the IRS announced the following employer health plan limit increases for 2018:
1. Health Spending Accounts (HSA) Limit Increases:
- For individuals: $3,450, up $50.
- For family coverage: $6,900, up $150.
- Individuals 55 and older may contribute an additional catch-up of $1,000.
2. Adjusted High-Deductible Health Plan Annual (HDHP) Minimums:
- Individual minimums: $1,350, up $50.
- Family minimum: $2,700, up $100.
3. Increase in Out-of-Pocket Limits (Copays and Deductibles):
Seek Professional Outside Assistance
- Individual limits will increase $100 to $6,650.
- Family limits will increase $200 to $13,300.
Because of the complexities of the EPA reporting, and because of varying additional state laws, you should consult with counsel to determine your compliance risk. You might also consider an outside resource for a pay equity analysis so you can be prepared. Contact us
for the help you need to stay compliant and avoid penalties.