HR Alert
October 2016
In order to avoid costly penalties and administratively burdensome correction procedures, plan sponsors must remain up-to-date with respect to applicable Health and Welfare plan limits. Yesterday,October 26, 2016, the IRS announced cost-of-living adjustments affecting 2017 dollar limitations for Health and Welfare plans and other related Health and Welfare Benefits items. We’ve included some of the most commonly used business benefits below, and the entire IRS publication is available HERE. While some limits remain the same, there have been a number of adjustments.
| Health and Welfare Plan Inflation-Adjusted Limits for 2017 | ||||
| Item | IRS Code Section | 2017 Limit | 2016 Limit | Note |
| Unearned Income of Minor Children Taxed as if Parent’s Income | 1(g) | $1,050 | $1,050 | The child’s gross income must be greater than $1,050 but less than $10,500. |
| Adoption Credit | 23 | $13,750 | $13,460 | The credit begins to phase out for taxpayers with modified adjusted gross income more than $203,540. |
| Employee Health Insurance Expense of Small Employers | 45R | $26,200 | $25,900 | The limit of $26,500 is used in calculations to determine the actual credit for an employer. |
| Cafeteria Plans | 125 | $2,600 | $2,550 | Limit on voluntary employee salary reductions for contributions to health FSA. |
| Qualified Transportation Fringe Benefit | 132(f) | $255 limit on commuter highway vehicle
$255 limit on qualified parking |
$130 limit on commuter highway vehicle and transit pass
$255 limit on qualified parking |
Monthly limit on the amount that may be excluded from an employee’s income for qualified transportation benefits. |
| Adoption Assistance Programs | 137 | $13,570 | $13,460 | The credit begins to phase out for taxpayers with modified adjusted gross income more than $203,540. |
Hall Benefits Law, LLC recommends that you consult with ERISA legal counsel to assist you with any questions you may have regarding applicable limits for your Health and Welfare Benefits plans.
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Hall Benefits Law, LLC
HBL offers employers comprehensive legal guidance on benefits in mergers and acquisitions, Employee Stock Ownership Plans (ESOPs), executive compensation, health and welfare benefits, healthcare reform, and retirement plans. We counsel a wide spectrum of clients including small, mid-sized, and large companies, 401(k) investment advisors, health insurance brokers, accountants, attorneys, and HR consultants, just to name a few. HBL is passionate about advising clients, and we are dedicated to our mission: to provide comprehensive, personalized, and practical ERISA and benefits legal solutions that exceed client expectations.
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