American Benefits Council
Benefits Byte


July 16, 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.

Click here to read past issues on the Benefits Byte Archive page.

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Senate Blocks Bill Addressing Contraceptive Care

In a July 16 vote, the U.S. Senate failed to move forward with a Democratic measure to reinforce the contraceptive coverage requirement of the Patient Protection and Affordable Care Act (PPACA), which was recently limited by the U.S. Supreme Court in its June 30 “Hobby Lobby” decision.

As we reported in a June 30 Benefits Byte story, the high court’s narrowly worded decision held that PPACA’s preventive care regulatory provisions promulgated to implement the Patient Protection and Affordable Care Act (PPACA) do not require comprehensive coverage of contraceptive services where a “closely-held” employer holds religious objections to such coverage.

The Protect Women’s Health from Corporate Interference Act(S. 2578, also referred to colloquially as the “Not My Boss’s Business Act”), introduced by Senator Patty Murray (D-WA), expressly stated that “an employer that establishes or maintains a group health plan for its employees (and any covered dependents of such employees) shall not deny coverage of a specific health care item or service with respect to such employees (or dependents) where the coverage of such item or service is required under any provision of Federal law or the regulations promulgated thereunder.”

With a 56-to-43 vote (including three Republicans – Senators Susan Collins (R-ME), Mark Kirk (R-IL) and Lisa Murkowski (R-AK) – voting in favor), the Senate failed to obtain the 60 votes necessary to invoke cloture and end debate on the measure. Senate Majority Leader changed his vote to “no” prior to the close of the vote, allowing him to bring up the bill later, if he so chooses. 

A collection of Republican Senators, led by Kelly Ayotte (R-NH), have introduced an alternative measure, the Preserving Religious Freedom and a Woman’s Access to Contraception Act (S. 2605), which seeks to “reaffirm that the Supreme Court’s decision in Hobby Lobby did nothing to change a woman’s ability to access birth control and other contraception. If she chooses, a woman is free to purchase contraception regardless of the views of her employer.” S. 2605 would also:

  • Recommend that the Food and Drug Administration should study whether contraceptives can be made available safely without a prescription to adults.
  • Repeal PPACA’s limit on the use of Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs) to medications that require a prescription.
  • Lift the $2,500 cap on FSAs.

Senate Republicans were not permitted to bring S. 2605 for a vote as a substitute amendment during floor consideration. Further consideration of the issue on the Senate floor is unclear. 

An identical version of the Protect Women’s Health from Corporate Interference Act (H.R. 5051) has been introduced in the U.S. House of Representatives, though floor consideration of that measure is very unlikely. A House version of S. 2605 has not yet been introduced.

For more information, contact Katy Spangler, senior vice president, health policy, at (202) 289-6700.

IRS Requests Comments on Safe Harbor 401(k) Plans

In a formal information collection request (IFR) issued on July 15, the Internal Revenue Service (IRS) announced that it is soliciting public comments regarding suspension or reduction of safe harbor nonelective contributions to 401(k) plans.

The request refers to final regulations, issued by IRS in November 2013, that revised the requirements for permitted mid-year reductions or suspensions of safe harbor non-elective contributions and permitted mid-year reductions or suspensions of safe harbor matching contributions to 401(k) and 401(m) plans (see the November 14 Benefits Byte for details). 

IRS will accept comments through September 15.

The Council provided written comments at the proposed rule stage in August 2009. Many of our suggested modifications were accepted in the final regulations, although the final rule deferred comment on the Council's suggestion that IRS modify the requirement to prorate the compensation limit for required testing.

The Council will consider filing additional comments in conjunction with the new IFR. To provide input or for more information, contact Jan Jacobson, senior counsel, retirement policy, at (202) 289-6700.

NOTE: This is the new version of the Benefits Byte

As you may have noted over the past few weeks, you have been receiving two versions of the Council’s Benefits Byte newsletter. This is because we are transitioning to a new third-party e-mail provider and Benefits Byte format. (Click here to see what both versions look like.) We will continue sending both versions of the Benefits Byte for a limited time.

If you are receiving this "new" version normally, no further action need be taken. If you need additional assistance, however, please consult the following Real Magnet Whitelisting Information or have your technical support staff contact Jason Hammersla, director, communications, 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).