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Benefit Issues for 2017

Wilkins Finston Friedman Law Group “wrapped up” the year 2016 with their predictions of the benefit issues employers will face in 2017. Here are their top four benefit issues for 2017:

•Health Care Reform. Speculation is rampant as to the extent of the upcoming changes to the Patient Protection and Affordable Care Act (“PPACA” or so called “Obamacare”). While we do not anticipate the complete repeal of PPACA in 2017, employers should expect some changes to be made, such as a repeal of the Medicaid expansion, the individual mandate penalty and marketplace subsidies. Beyond this, lawmakers will need to come up with workable alternatives that preserve the goodies of Obamacare, such as no preexisting conditions or lifetime maximums, and replace or modify the more objectionable provisions, such as the employer mandate and Cadillac tax. This will not be a quick or easy process given the complexities of the health care law.

•Wellness Programs. The long awaited release of final wellness regulations by the Equal Employment Opportunity Commission (“EEOC”) brought both clarity and confusion to employers regarding the design of their wellness programs due to the inconsistency between the EEOC guidance and the PPACA wellness rules. Employers should expect to continue to make changes to their wellness programs as new developments in this area of the law unfold.

•Executive Compensation. The new administration’s promise of deregulation may result in the repeal or modification of certain of the executive compensation provisions in the Dodd-Frank Wall Street Reform and Consumer Protection Act. Provisions we see as likely targets for change include the CEO pay ratio rule, the requirement for mandatory clawbacks and the pay for performance proxy disclosure rules. Employers subject to these rules will want to continue to monitor developments in this area.

•401(k) Plan Investments. The flood of litigation regarding 401(k) plan fees and mutual fund share classes is not likely to abate. Employers should expect continued scrutiny of their 401(k) plans regarding fees, the number of investment funds offered, self-directed brokerage account windows and target date funds. Accordingly, employers and plan fiduciaries should continually monitor their 401(k) plan investment structure with respect to these issues.

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