The year 2018 may seem distant today, but the Affordable Care Act’s infamous ‘Cadillac tax’ is looming on the horizon. In a recent blog post for Employee Benefit News, Fidelity VP Jeff Munn writes that health savings accounts might be a sound strategy for employers looking to avoid the impact of the tax.
The 40% excise tax will be placed on employer-sponsored plans valued above $10,200 for single coverage and $27,500 for family coverage.
To lower the tax bite without cost-shifting, employers’ next-best strategy is to lower the cost of plans. HDHPs “are generally lower value plans,” Munn writes. These plans can become more attractive if paired with an HSA—so that employees can enjoy the accounts’ perks like tax advantages and retirement savings.
Two court cases give insight to employers on how to manage the Family and Medical Leave Act: one in how to certify intermittent leave, the other in determining leave eligibility.
In Oak Harbor Freight Lines, Inc. v. Antti, a U.S. District Court ruled that requiring a doctor’s note for each intermittent absence violates FMLA’s recertification standard.
Oak Harbor’s policy was borne from “a few employees were disproportionately taking time off on Mondays and Fridays, or just before a holiday,” according to Thompson Information Services. Thus, the company required employees to “recertify” each individual intermittent leave request.
FMLA allows employers require recertification for intermittent leave “on a reasonable basis”—keywords being “reasonable basis,” which the law defines as no more than every 30 days and only for changed circumstances or lingering doubts concerning validity of the certification.
The court found that Oak Harbor’s policy contributed to viewing absences as separate instances of FMLA. Thompson advises employers use alternative lawful ways to seek medical information pertaining to an FMLA absence like requesting additional opinions.
In Hurley v. Kent of Naples, an appellate court found that an employee diagnosed with depression could not preemptively ask for FMLA leave, noting the law’s specifics allow leave only to treat a serious medical condition that presents current incapacity, according to FMLA Insights. “FMLA does not [protect] any leave that is medically beneficial simply because the employee has a serious health condition.” Since Hurley, by his own testimony, wasn’t presently incapacitated, but rather thought he might need FMLA in the future to seek treatment, the court ruled for his employer, vacating an earlier court’s judgment that Hurley had been wrongfully terminated.
A Supreme Court ruling states that companies must pay taxes for Social Security and Medicare for severance packages in cases where paid workers are laid off involuntarily, Reuters reports.
In the case of Quality Stores, the retailer filed for bankruptcy in 2001 and argued against paying these taxes. If Quality Stores had won, according to the news outlet, thousands more employers could have filed for refund claims with the IRS—possibly totaling up to $1 billion.