Federal Tax Reform Bill Approved by U.S. House

From PA Chamber of Business & Industry

Last week, the U.S. House voted mostly along party lines – 227 to 205 – in favor of the “Tax Cuts & Jobs Act” – H.R. 1 – which aims to make significant updates to the Federal Tax Code for the first time in more than 30 years. Every member of Pennsylvania’s GOP Congressional delegation voted in the affirmative on the legislation. The U.S. Chamber is leading the charge in urging Congressional passage of federal tax reforms that would simplify the current, burdensome Tax Code; lower federal tax rates to improve the nation’s ability to compete; allow for the expense of capital investments to help free up a company’s cash flow and move to a territorial tax system, among other changes. All told, H.R. 1 would cut taxes by more than $1.4 trillion over the next decade.

The PA Chamber has joined the U.S. Chamber and more than 100 chambers of commerce nationwide in sending letters to Congress, calling on them to pass the legislation because it would improve America’s competitive edge, help to grow the domestic economy and improve our global standing.

Following the House’s action on H.R. 1, the PA Chamber issued a press release calling on both chambers to act quickly and get a federal tax reform package to President Trump’s desk by the end of the year. Two letters recently sent to Washington, D.C. also communicate the PA Chamber’s support for tax reforms – first, to the state’s congressional delegation urging support for a Main Street lending initiative that will help small business growth; and second, to the Commonwealth’s U.S. Sens. Toomey and Casey urging them to support the Tax Cuts & Jobs Act. The U.S. Senate Finance Committee (on which both Toomey and Casey serve) advanced its own version of a tax reform plan late last week, which could be taken up by the full Senate after the Thanksgiving holiday. Toomey voted ‘yes’ on the Senate bill, while Casey voted in the negative.

“The U.S. House and Senate’s approval of their respective tax bills are critical steps toward the ultimate goal of reforming our federal tax structure,” PA Chamber President Gene Barr stated. “The PA Chamber looks forward to working with our elected officials as the bills move through the legislative process and work begins on a final compromise.”

The Columbia Montour Chamber has not yet taken a position on the House’s tax bill. 

PCORI Fees in Health Insurance Plans to be Increased in 2018

From ChamberChoice

PCORI fees, which are used to fund research on patient-centered outcomes, apply to plan and policy years ending before Oct. 1, 2019. The function gives the fee its name, the Comparative Effectiveness Research Fee (sometimes referred to as “CER fees” or “PCORI assessment”). Insurers pay this fee for a fully-insured plan with the cost being built into the premium. Self-insured plan sponsors are responsible for the payment and filing of the fee.

The amount of the fee is adjusted each year for inflation. On Oct. 6, 2017, the Internal Revenue Service issued IRS Notice 2017-61 providing that the PCORI fee will increase by 13 cents.

Fees and Form
The fee is based on the average covered lives for the applicable 12-month policy or plan year. As a reminder, if an employer’s ERISA plan year is different than their policy year, then the ERISA plan year is used for calculating the fee. CER/PCORI fees are due by July 31, 2018 for 2017 calendar plan years and for plan years ending on or after Oct. 1, 2016 and before September 30, 2017.

• For 2017 calendar plan years, employers must pay a $2.39 per average covered life fee by July 31, 2017.

• For plans ending on or after October 1, 2016 and before Sept. 30, 2017, employers must pay a $2.26 per covered life fee by July 31, 2018.

Plan fees must be paid via IRS Form 720 Quarterly Federal Excise Tax Return annually, a plan sponsor will report and pay the fee on the second quarter Form 720.

Counting Lives
There is a special rule for the PCORI fee when coverage is provided under multiple self-insured health plans:

• Generally, separate fees apply for lives covered by each specified health insurance policy or applicable self-insured health plan.

• However, two or more applicable self-insured health plans may be combined and treated as a single applicable self-insured health plan for purposes of calculating the PCORI fee but only if the plans have:
       o The same plan sponsor; and
       o The same plan year.

For example, if amounts in an HRA may be used to pay deductibles and copays under a fully insured health policy, the HRA (an applicable self-insured health plan) and the policy would be subject to separate PCORI fees.

However, an HRA that may be used to pay deductibles and copays under an applicable self-insured health plan is not subject to a separate fee (and the fee will apply only to the applicable self-insured health plan) if both the HRA and the applicable self-insured health plan have the same plan sponsor and the same plan year.

Conclusion
The PCORI fee is not payable until July 31 of next year. However, as employers budget for the new year, the 13 cents per average covered life increase recently published by the IRS needs to be taken into consideration. JRG will publish a reminder of the fee and additional information as the July 31, 2018 due date nears.

Joint Venture Partnership Opportunities Available in Pennsylvania Through Department of Community & Economic Development

Pennsylvania’s Office of International Business Development (OIBD), part of the Department of Community & Economic Development, regularly receives economic development lead opportunities from its authorized international representatives concerning businesses that have expressed interest in locating in, investing in, trading with, contracting with, or partnering with businesses located in PA.

Visit DCED’s website to view the latest opportunities from international companies interested in working with a Pennsylvania-based company. If you or your partner(s) are interested in learning more, please use the contact information at the end of this email to send your request for consideration. All information received will be kept confidential.

Please follow this simple process first for any potential leads before sending inquiries to OIBD for consideration:

  • Contact your local company to confirm they are interested in initiating the conversation.
  • Once confirmed, provide Cindy Hostetler at OIBD with the proper company/contact information.
  • OIBD will then confirm with the international client that they are interested in initiating the conversation and will schedule the introductory conference call, including the local EDC when possible.

OIBD will make every effort to include the local EDC and/or referring contact in any and/or all forward movement with the potential prospect(s).

For information about the available opportunities and/or to be added to the email list, please contact:

Cindy Hostetler, International Marketing Executive
Office of International Business Development
Commonwealth Keystone Building
400 North Street, 4th Floor | Harrisburg, PA 17120-0225
Phone: 717.720.7370 | chostetler@pa.gov

 

Please submit any potential partner information as follows: 

  • Company Name, Address 
  • Phone, Fax, Email 
  • Website URL 
  • Principal Contact Name, Title 
  • Principal Contact Office Phone, Cell Phone, Email 
  • Project ID: JV#### 

All information received will be kept CONFIDENTIAL and should be sent to the OIBD contact listed above for consideration. These companies plan Pennsylvania visits when suitable partners are identified.

PA Public Utility Commission Working to Preserve Rural Broadband Funding

The Pennsylvania Public Utility Commission (PUC) is encouraging residents, businesses, local leaders and other concerned parties – especially in rural communities – to contact the Federal Communications Commission (FCC) in support of efforts to preserve nearly $140 million in funding intended to increase access to high speed internet service in underserved areas in Pennsylvania.

Earlier this year, the PUC and the Pennsylvania Department of Community and Economic Development (DCED) filed a joint petition with the FCC as part of an ongoing effort to address Pennsylvania’s “digital divide” by preserving millions of dollars in federal funding intended to increase access to high speed internet service in rural communities across the Commonwealth.

Funding for the Connect America Fund Phase II program (CAF II) is drawn from the federal universal service surcharges paid by state residents and businesses. It is intended to support the deployment of broadband service in high-cost areas, including many rural communities. Most incumbent local telephone companies serving Pennsylvania’s high-cost areas accepted the CAF II funding, along with the commitment to meet federal benchmarks for broadband speed (10 Mbps download & 1 Mbps upload), but the Verizon companies did not, jeopardizing the continued availability of millions of dollars in broadband support throughout Pennsylvania. While this funding is currently only available to regulated utilities, there are other internet providers in the region willing to work with communities and businesses. The Chamber of Commerce sent a letter to state legislators in June asking for more flexibility in how these dollars can be allocated to expand broadband in rural areas.

“The FCC plans to conduct an auction to allocate the broadband funding that was not accepted by Verizon, and the PUC has been encouraging all concerned parties to work together to keep these dollars in our state,” said PUC Commissioner David W. Sweet. “We remain hopeful that the FCC will consider the joint petition by the PUC and DCED to approve a Pennsylvania-specific weighting factor to the upcoming CAF II auction.”

Information regarding how to submit comments electronically or by mail to the FCC on this issue is available on the PUC’s website

Additionally, the Commission continues to encourage state and local leaders to continue exploring mechanisms to enhance financial support for rural broadband projects – which could help influence the FCC’s decision about where funds should be directed.

IRS Publishes 2018 Benefit Plan Adjustments

From ChamberChoice

It’s the most wonderful time of the year — when the IRS announces limits and adjustments on employee benefit plans. On Oct. 19, the IRS released its 2018 Cost-Of-Living Adjustments (COLAs) for tax-related employee benefits in Revenue Procedure 2017-58 and in IRS Notice 2017-64. Some limits have increased while others remained the same.

What Employers Need to Know

• Health Flexible Spending Accounts Increased. The annual employee salary contribution limit to health flexible spending accounts (FSAs) will increase to $2,650 for 2018 (a $50 increase from 2017). An employer may decide to have a different limitation on employee health FSA contributions, it just cannot be more than the IRS limit. The limit applies on an employee-by-employee basis. Any non-elective employer contributions generally do not count toward the employee’s dollar limit.

• The monthly limit under IRC Section 132 for fringe benefits is $260 for the combined monthly limit for transit pass and vanpooling expenses. The monthly limit for parking expenses is also $260 per month.

• Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) is an HRA that is available only to small employers that are not subject to the employer shared responsibility penalties under health care reform. As of January 1, 2018, the limitation for QSEHRA payments and reimbursements is $5,050 for an individual and $10,250 for family. This is a $50 increase for individual reimbursements and a $250 increase for family reimbursements.

• The penalty for failure to file correct information returns (which include W-2s, W-3s, 1095 and 1094-C’s will increase to $270 per failure. This increased penalty will be applicable for returns required to be filed in 2019.

The table above demonstrates the 2018 limits for many of the common benefits offered by employers. This is not a comprehensive list.

Employers should begin to review their payroll and plan administration systems for the 2018 adjustments. When preparing open enrollment materials, an employer should incorporate these limits in any communications.

Finally, the employer should determine to distribute updated Summary Plan Descriptions (SPD) or provide a Summary of Material Modifications (SMM) for any required amendments.