Health FSA Limit Will Increase for 2018
The Affordable Care Act (ACA) imposes a dollar limit on employees’ salary reduction contributions to health flexible spending accounts (FSAs) offered under cafeteria plans. This dollar limit is indexed for cost-of-living adjustments and may be increased each year.
On Oct. 19, 2017, the Internal Revenue Service (IRS) released Revenue Procedure 2017-58, which increased the FSA dollar limit on employees' salary reduction contributions to $2,650 for taxable years beginning in 2018. Read our compliance bulletin for more information, including a list of limits for other tax-advantaged plans (HSAs, 401ks, etc.).
News Rules for Disability Benefit Claims May Be Delayed
On Dec. 16, 2016, the Department of Labor (DOL) released a final rule to strengthen the claims and appeals requirements for plans that provide disability benefits and are subject to the Employee Retirement Income Security Act (ERISA). The final rule is currently scheduled to apply to claims that are filed on or after Jan. 1, 2018. However, on Oct. 10, 2017, the DOL proposed to delay the final rule for 90 days — until April 1, 2018.
Consistent with President Donald Trump’s executive order on reducing regulatory burdens, the DOL will review the final rule to determine whether it's unnecessary, ineffective or imposes costs that exceed its benefits.
California Extends Parental Leave to Smaller Employers, Bans Salary Inquiries
A new law enacted on Oct. 12, 2017 will require California employers with 20 or more employees to grant up to 12 weeks of unpaid, job-protected leave for employees to bond with a new child.
The New Parent Leave Act extends the state’s parental-bonding leave requirements, which previously applied only to employers with 50 or more employees, to smaller employers starting on Jan. 1, 2018.
The law will allow employees who are employed at a worksite where the employer has 20 or more employees within 75 miles to take parental leave within the first year after their child is born, adopted or placed with them for foster care. Visit the DFEH website for more information on California’s leave laws.
Also on Oct. 12, California Governor Jerry Brown signed into law a bill that prohibits both public and private employers from seeking, considering or relying on a job applicant’s salary history information during the hiring process. California joins Delaware, Massachusetts and Oregon in enacting statewide restrictions on salary history inquiries. Employers should make any needed changes to their employment applications and hiring practices to ensure compliance when the new law takes effect on Jan. 1, 2018.
Rhode Island Enacts Paid Sick Leave
On Sept. 28, 2017, Governor Gina Raimondo signed the Healthy and Safe Families and Workplaces Act into law. The Act requires Rhode Island employers with 18 or more employees to provide paid sick leave to employees effective July 1, 2018. Annual maximum paid sick leave accruals will be phased in as follows:
- Up to 24 hours during the 2018 calendar year;
- Up to 32 hours during the 2019 calendar year; and
- Up to 40 hours each calendar year after 2019.
Employers with fewer than 18 employees must provide employees with unpaid, job-protected sick leave in the same amounts. The Rhode Island Department of Labor and Training will issue guidelines and regulations to implement the paid sick leave law. The regulations may include employer notice or workplace posting requirements, which are not specified under the Act itself. They may also include specific employer record keeping requirements.
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