HR Professionals and small business owners are constantly bombarded with new labor laws or changes in the existing ones.
While state labor laws and local ordinances already keep HR professionals busy, the federal government also churns out new rules, proposed rules and updated regulations on a regular basis.
Here are two recent updates that will impact employers going into the new fiscal year.
Federal Per Diem Rates Updated for Fiscal Year 2017
The General Services Administration (GSA) has announced the per diem rates that apply to the lower 48 Continental United States (CONUS) for the federal government's fiscal year 2017, which begins October 1, 2016.
Per diem rates are flat, daily dollar amounts, which are divided into lodging, meal, and incidental expenses (M&IE). They represent the maximum amount that federal employees may receive in travel reimbursements when they travel on official business.
Per diem allowances, however, do not apply only to federal government employers. Any employer can use these rates when reimbursing employees who travel on business overnight, in lieu of reimbursing their actual expenses.
For private employers, per diem allowances that are equal to or less than the GSA's rates for the locality of travel are excluded from an employee's taxable income.
In addition, an employee who receives a per diem allowance does not need to submit substantiation for the expenses covered by the allowance. The employee, however, must continue to substantiate the time, place and business purpose of his or her travel.
Note that any per diem allowances that exceed the federal rates are treated as taxable wages and subject to employment taxes for the difference between the allowance and the federal rate.
New Per Diem Rates for 2017
Based on the GSA's calculations, the standard lodging amount will increase for fiscal year 2017 to $91 per night, from the current $89.
Most continental U.S. locations will be covered by the standard per diem rate of $142, which is a combination of $91 for lodging and $51 for meals and incidental expenses. In fiscal year 2017, there are about 350 Non-Standard Areas (NSAs) that have per diem rates that are higher than the standard CONUS rate.
For all locations within lower 48 Continental United States that not shown on the GSA's area list, the lodging per diem rate is $91 and the M&IE rate is $51, for a combined maximum standard per diem rate is $142.
The combined rates for the listed locations, however, range from an “off-season” low of $142 in several locations, to a “peak-season” high of $412 for Aspen, Colorado.
The GSA now has a mobile app that employers and employees can use to look up per diem rates.
IRS Proposed Regulations Clarifying Reporting of ACA Minimum Essential Coverage
The IRS's proposed regulations address issues under Section 6055 that were previously identified in IRS Notice 2015-68 (September 2015). The IRS indicated in the Notice that it would eventually issue proposed regulations on these issues. The July 2016 proposed regulations accomplish this goal.
Form 1095-B is used to report MEC by insurance carriers for fully-insured MEC and by small employers with self-insured MEC who are not otherwise subject to the employer shared responsibility provisions of the Affordable Care Act. Form 1095-C, Part III is used by large employers with self-insured MEC.
The Section 6055 reporting requirement, which applies to all entities that provide MEC, generally is satisfied by filing IRS Form 1095-B. However, employers that sponsor self-insured health plans must file Form 1095-C (Part III), instead of Form 1095-B, to report Section 6055 information for individuals enrolled in the self-insured coverage.
HRA Reporting and Reporting Supplemental Coverage
The proposed regulations were written to clarify reporting rules for supplemental forms of MEC. These were particularly confusing for employers. Essentially, the proposed regulations state that:
- If an individual is covered by more than one MEC plan made available by the same reporting entity, then reporting is required for only one of the plans or programs, which is reffered to as the first rule.
- Reporting is not required for an individual's MEC if the individual is eligible for that coverage only if the individual also is covered by other MEC for which Section 6055 reporting is necessary, which is called the second rule.
The two rules generally apply on a month-by-month and individual-by-individual basis.
The second rule, however, only applies to employer-sponsored coverage if the supplemental coverage is offered by the same employer that offered the employer-sponsored coverage for which Section 6055 reporting is required.
Reporting of MEC is not required for a month if that coverage is offered only to individuals who also are covered by other MEC for which reporting is required (e.g., Medicare, TRICARE, etc.).
For those circumstances, the following applies:
- The program for which reporting is required represents the primary coverage.
- The other MEC is supplemental to the primary plan.
TIN Solicitation Change
Another change of significance for reporting entities is the revised safe harbor for soliciting TINs (e.g., SSNs) from covered participants.
The revised safe harbor still requires up to three attempts to obtain a covered participant’s TIN pursuant to specific procedures set out in the proposed regulations. The covered participant’s date of birth may continue to be used as a substitute for solicited TINs missing when reporting is due.
A reporting entity does not have to make all three solicitations if a TIN is received beforehand. In other words, if the TIN is no longer missing before all three solicitations are made. The revised solicitation safe harbor may be considered as retroactive to the 2014 calendar year.
Looking for Professional Help With Your HR Requirements
An updated and streamlined reporting strategy will help your organization meet its obligations, while providing accuracy and timeliness. So take time to understand the law and prioritize accurate record keeping. In this way, you will make compliance a sure thing.
Another key step in maintaining HR compliance and increasing your company's cost-effectiveness is to consider outsourcing. A professional agency such a Accuchex can provide much-needed help with Human Resources needs and questions.
Accuchex is a full spectrum Payroll Management Services provider offering expertise in Time Management, Insurance and Retirement issues, as well.