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February 3, 2010
IRS Guidance: HEART Act
The IRS has issued some clarifications (Notice 2010-15) relating to certain provisions of the Heroes Earnings Assistance and Relief Tax (HEART) Act of 2008. Of particular interest:
Alas! MHPAEA Regulations
The much anticipated regulations interpreting the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) have, at long last, been issued, as interim final regulations. The MHPAEA, enacted on October 3, 2008, expanded the Mental Health Parity law, enacted in 1996.
Timing of Taking the COBRA Subsidy Credit
The IRS issued an FAQ (Reporting and Disclosure, RD-6) relating to the timing of reporting credit for payment of the COBRA subsidy premium. If a COBRA premium, subject to the COBRA subsidy, is paid in 2010 for coverage in 2009, the employer may claim the credit for the related premium subsidy on Form 941 for either:
DOL Issues Final Safe Harbor Rules on Employee Contributions to Small Pension and Welfare Plans
The DOL has finalized its participant safe harbor rules applicable to small retirement and welfare benefit plans. These regulations were proposed February, 2008 (seeSafe Harbor for Placing Participant Contributions in Small Plans). The final regulations mirror the proposed regulations.
January 7, 2010
Extension of Deadline to Adopt Certain Retirement Plan Amendments
The Pension Protection Act of 2006 (“PPA”, Public Law 109-280) as subsequently amended by the Worker, Retiree, and Employer Recovery Act of 2008 (“WRERA”, Public Law 110-458), require several changes to qualified plans. Many of these changes were required to have been made by December 31, 2009 for calendar year plans.
Updated IRS Publications
The IRS has recently updated several publications that may be of interest to employers:
COBRA Subsidy Extended
Congress has given plan administrators and COBRA continuees a Christmas present in the form of extending the COBRA subsidy that is part of theDepartment of Defense Appropriations Act of 2010 (“DOD Act”, HR 3326). President Obama signed this Act on December 19, 2009.
2009 Form M-1 Filing
The DOL has released the 2009 edition of the Form M-1 Filing Packet. If you sponsored a multiple employer welfare arrangement (MEWA) in 2009, make certain that you file the Form M-1 annual report by March 1, 2010 (an automatic 60-day extension to May 3, 2010 can be requested).
Delayed Effective Date for Debit/Credit/Smart Cards Used for Qualified Transportation Expenses
According to IRS Notice 2009-95, the effective date for usingdebit or credit cards, or other smart cards, to pay for qualified transportation expenses, has been extended for one year, to January 1, 2011. The reason for the delay is to allow additional time for certain transit systems to modify their technology and make it compatible with the requirements of transit vouchers. In the interim, individuals may rely upon the 2006 guidance (seeSmartcards and Debit Cards Allowed for Qualified Transportation Expenses, Benefit Beat, December 2006).
IRS Provides Relief for NQDC Plan Document Failures
Code Section 409A governs taxation of nonqualified deferred compensation. It provides specific rules relating to funding and distribution (also see409A Documentation Limited Relief from the Oct 2007 Benefit Beat). The IRS just issued Notice 2010-6, providing a voluntary document correction program for failures occurring in these plans.