• Employees will be able to contribute up to $2,650 to a health flexible spending account (FSA), a $50 increase from 2017.
• The monthly limits on the qualified transportation fringe benefit, as well as the qualified parking benefit, will increase to $260 (from $255).
• The annual compensation that makes a company’s officer a “control employee”, for fringe benefit valuation purposes, will rise from $105,000 in 2017 to $110,000 (announced separately in Notice 2017-64).
• The bar for “highly compensated employee” is unchanged at $120,000, and the dollar limit that defines a “key employee” in a top-heavy plan remains $175,000.
• The maximum amount that may be excluded from an employee’s gross income under an employer-provided adoption assistance program rises to $13,840 (up $270 from 2017). In addition to this increase, the maximum adoption credit allowed to an individual for the adoption of a child will also be $13,840 (a $270 increase from 2017). Both the exclusion and the credit will begin to be phased out for individuals with modified adjusted gross incomes greater than $207,580 and will be entirely phased out for individuals with modified adjusted gross incomes of $247,580 or more (both up $4,040 from 2017).
• Rev. Proc. 2017-58 raises the long-term care (LTC) insurance premium amounts that will be deductible in 2017. These will range from $420 for taxpayers aged 40 or younger, to $5,200 for those older than 70. The per diem limitation on LTC insurance payments remains $360.
• The maximum amount of payments and reimbursements under a Qualified Small Employer Health Reimbursement Arrangements (QSEHRA) cannot exceed $5,050 for individual coverage and $10,250 for family coverage (a $100 and $200 increase from 2017, respectively).

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Employer-based wellness incentive programs have existed in the U.S. for a number of years, but the scope of potential incentive programs were expanded by the American Care Act (ACA). The following are changes to Wellness Incentive Programs under the ACA in 2014.

• The permissible incentive limit is increased from 20% to 30%
• For tobacco use, the limit is 50% (minus other health-based incentives)
• Incentive is based on total premium (i.e., the sum of the employee’s and the employer’s contributions)
• Must still offer reasonable alternative
• If alternative is an educational program (e.g., tobacco cessation), employer must make the program available and pay for it
• Potential implications include effect on 9.5% of coverage affordability standard

If you have questions regarding Wellness Incentive Programs and other benefits as they relate to Healthcare Reform, call 1.800.250.2741 or email us at solutions@gsanational.com to contact one of our Healthcare Reform subject matter specialists.
 
Please also feel free to refer to our Healthcare Reform page.

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