In 2010, the Affordable Care Act ("ACA") added Section 18A to the Fair Labor Standards Act requiring employers with more than 200 full-time employees to automatically enroll new full-time employees in one of the employer's health benefits plans. After being delayed several times, this requirement has now been repealed by the Bipartisan Budget Act which President Obama enacted late last year. As a result, there will be no requirement for automatic enrollment.
Rollovers to SIMPLE IRAs
Among other things, the Protecting Americans from Tax Hikes ("PATH") Act allows rollovers to SIMPLE IRAs from additional new sources.
Prior to PATH, a SIMPLE IRA could only accept rollovers from another SIMPLE IRA. With the enactment of PATH (enacted on December 18, 2015), a SIMPLE IRA may now accept rollovers from a traditional IRA, a qualified trust, a qualified annuity, a 403(b) tax-sheltered annuity, or a governmental 457 plan.
However, any rollover from one of these sources may not be made into a SIMPLE IRA until two years after the participant first participates in the SIMPLE IRA. Other restrictions are described in Internal Revenue Code ("Code") Section 72(t)(6).
PACE Act Impacts Cafeteria Plan Rules
Generally speaking, a qualified health plan ("QHP") under the ACA may not be offered through an employer's cafeteria plan. A QHP is a plan that meets certain certification requirements, provides "essential health benefits," and is offered by an insurer.
Code Section 125(f)(3), however, provides an exception to this general rule and states that a "qualified employer" may offer its employees a QHP through a cafeteria plan.
The Protecting Affordable Coverage for Employees ("PACE") Act changes the impact of the Code Section 125(f)(3) exception.
Prior to PACE, a qualified employer was any "small employer" with 100 or fewer employees in the previous plan year. PACE changes the definition of "small employer" to any employer with 50 or fewer employees in the previous plan year.
As a result of PACE, the exception available under Code Section 125(f)(3) - allowing certain qualified employers to offer a QHP through a cafeteria plan - has been narrowed to employers with 50 or fewer employees.