American Benefits Council
Benefits Byte


December 3, 2014

The Benefits Byte is the American Benefits Council’s regular e-mail and online newsletter for members only, providing timely reports on legislative, regulatory and judicial developments, along with updates on the Council’s activities in support of employer-sponsored benefit plans.

The Benefits Byte is published by the American Benefits Council, based on staff reports and edited by Jason Hammersla, Council director of communications. Contact information for Council staff related to specific topics can be found at the end of each story.

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House Passes Tax "Extenders" Bill, Including Multiemployer Pension Funding

With time running out in the 2014 legislative calendar, on December 3 the U.S. House of Representatives passed, by a bipartisan vote of 378-46, a short-term extension of certain expiring tax provisions for individuals, families and employers. The measure will now proceed to the Senate for its consideration. The House is expected to adjourn for the year by December 11.

The Tax Increase Prevention Act (H.R. 5771) includes, among other provisions, a one-year extension of the multiemployer pension plan funding rules established by the Pension Protection Act of 2006 (PPA). These rules, which are designed to improve the funding of multiemployer plans that fall into “endangered status” (generally less than 80 percent funded) or “critical status” (generally less than 65 percent funded or the plan is expected to have a funding deficiency or become insolvent within a certain period) are set to expire at the end of 2014.

The newly passed measure would extend amortization periods and funding improvement and rehabilitation plan rules of the Pension Protection Act of 2006 (PPA) through December 31, 2015. On December 1, Representative Joseph Crowley (D-NY) introduced H.R. 5773, a bill that provides for a stand-alone extension of the multiemployer plans.

H.R. 5771 also adopts many of the provisions included in the U.S. Senate Finance Committee’s Expiring Provisions Improvement Reform and Efficiency (EXPIRE) Act, which intended to provide a two-year extension of several tax provisions expiring in 2013 and 2014. The EXPIRE Act was approved by the committee in an April 2 mark-up session (see the April 3 Benefits Byte). A section-by-section summary of the bill, prepared by the House Ways and Means Committee, is now available.

A number of these expiring tax provisions affect employee benefits, including:

  • Mass transit benefit parity: the American Taxpayer Relief Act of 2012 (H.R. 8) provided for an increase in the pre-tax allowance for mass transit expenses, making it equal to the benefit provided for parking ($245 per month). H.R. 5771 extends this parity treatment through the end of 2014.
  • Distributions from Individual Retirement Plans for Charitable Purposes: The expiring provision allows taxpayers age 70.5 and older to make a tax-free distribution from an IRA of up to $100,000 to a 501(c)(3) organization and simultaneously satisfy the minimum required distribution rules. H.R. 5771 extends the provision through the end of 2014.

However, the bill does not include several of the provisions approved by the Senate Finance Committee, notably the health care tax credit extension for certain trade adjustment assistance (TAA) and Pension Benefit Guaranty Corporation (PBGC) benefit eligible individuals. This expiring provision provided a health insurance tax credit to individuals who are dislocated from their work due to trade competition.

Senate Finance Committee Chairman Ron Wyden (D-OR) and ranking Republican committee member Orrin Hatch (R-UT) have expressed disappointment that a longer-term deal has not been reached. “I would’ve preferred the two-year package. I thought we did a really good job in committee,” said Hatch. “It’s something that should’ve been given a little more credibility than it was.” 

Discussions last week between Senate Majority Leader Harry Reid (D-NV) and House Ways and Means Committee Chairman Dave Camp (R-MI) would have provided for a longer-term extenders deal, but talks collapsed after the White House threatened a veto due to complaints that it tilted too heavily toward corporations and not low-income families.

For more information, contact Diann Howland, vice president, legislative affairs, at (202) 289-6700.

House Approves ABLE Act

In a bipartisan 404-17 vote on December 3, the U.S. House of Representatives approved a measure extending savings assistance to families with disabled children.

The Achieving a Better Life Experience (ABLE) Act (H.R. 647) authorizes the creation of special savings accounts that would permit a beneficiary to save for expenses such as education, medical and dental care, community support services, employment training and support, moving and assistive technology, housing and transportation. These accounts, structured like 529 college savings accounts, would be available to individuals eligible to receive supplemental security income benefits under Title XVI of the Social Security Act. A new section-by-section summary, prepared by the House Ways and Means Committee, is now available.

The Ways and Means Committee approved the measure in a bipartisan voice vote on July 31. Prior to its approval on the House floor, the measure was amended to offset its $2 billion cost using a variety of non-benefits-related provisions.

The measure has also been introduced in the U.S. Senate as S. 313, sponsored by Subcommittee Chairman Bob Casey (D-PA). This legislation was the subject of a Senate Finance Committee’s Taxation and IRS Oversight Subcommittee hearing on July 23 (as we reported in the July 23 Benefits Byte). S. 313 has 74 Senate cosponsors, including Majority Leader Harry Reid (D-NV) and Minority Leader Mitch McConnell (R-KY) but is not yet on the Senate schedule for consideration.

For more information, contact Diann Howland, vice president, legislative affairs, at (202) 289-6700.

The American Benefits Council is the national trade association for companies concerned about federal legislation and regulations affecting all aspects of the employee benefits system. The Council's members represent the entire spectrum of the private employee benefits community and either sponsor directly or administer retirement and health plans covering more than 100 million Americans.

Notice: the information contained herein is general in nature. It is not, and should not be construed as, accounting, consulting, legal or tax advice or opinion provided by the American Benefits Council or any of its employees. As required by the IRS, we inform you that any information contained herein was not intended or written to be used or referred to, and cannot be used or referred to (i) for the purpose of avoiding penalties under the Internal Revenue Code, or (ii) in promoting, marketing or recommending to another party any transaction or matter addressed herein (and any attachment).