States Adjust Minimum Wage Rates for 2011                         

The following states have announced an increase in minimum wage rates, effective January 1, 2011:

• Arizona: The state minimum wage will increase to $7.35 per hour.
• City of San Francisco, California: The City of San Francisco's minimum wage rate will rise to $9.92 per hour.
• Colorado: The minimum wage will increase to $7.36 per hour, and $4.34 for tipped employees.
• Montana: The state minimum wage will rise to $7.35 per hour.
• Ohio: The state minimum wage will increase to $7.40 for non-tipped employees, and $3.70 for tipped employees. The federal minimum wage of $7.25 may be paid to employees whose employers gross $271,000 or less per year.
• Oregon: The minimum wage will rise to $8.50 per hour.
• Vermont: The state minimum wage will increase to $8.15 per hour, and $3.95 per hour for tipped employees.
• Washington: The minimum wage will increase to $8.67 per hour.

 For more information on state minimum wage laws, including poster requirements, please visit the HR360 State Laws Section, and click on your state.

 

Federal Agencies Delay Nondiscrimination Requirements for
Group Health Insurance Plans                         

Business Benefits Group

The Internal Revenue Service (IRS) has issued Notice 2011-1 which delays the requirement under the Affordable Care Act that non-grandfathered insured group health plans comply with the requirements of IRS Code Section 105(h)(2), prohibiting discrimination in favor of highly compensated individuals, for plan years beginning on or after September 23, 2010.

What are the nondiscrimination requirements under the Affordable Care Act?
 
Section 10101(d) of the Affordable Care Act, which adds § 2716 to the Public Health Service Act, provides that a group health plan (other than a self-insured plan) must satisfy the requirements of § 105(h)(2) of the Internal Revenue Code and that 'rules similar to the rules contained in paragraphs (3) [nondiscriminatory eligibility classification], (4) [nondiscriminatory benefits], and (8) [certain controlled groups] of § 105(h) of such Code shall apply.' Section 2716 also provides that the term 'highly compensated individual' has the meaning given by § 105(h)(5). Section 2716 does not apply to grandfathered health plans.

Why has the requirement for compliance with the nondiscrimination rules been delayed?

According to Notice 2011-1, comments received raised fundamental concerns about plan sponsors' ability to comply with § 2716 without regulatory guidance, including, in particular, guidance regarding the meaning of § 2716(b)(1), which provides that '[r]ules similar to the rules contained in paragraphs (3), (4) and (8) of section 105(h) of such Code shall apply' [emphasis added] to insured plans. The § 2716(b)(1) reference to rules 'similar to' means that guidance must specify in what respects insured plans are subject to the same statutory provisions that apply to self-insured plans under § 105(h)(3), (4) and (8) and in what respects insured plans are subject to rules reflecting a different (although 'similar') application of those statutory provisions.

What is the timing of the delay?
Because regulatory guidance is essential to the operation of the statutory provisions, the Treasury Department and the IRS, as well as the Departments of Labor and Health and Human Services (collectively, the Departments), have determined that compliance with § 2716 should not be required (and thus, any sanctions for failure to comply do not apply) until after regulations or other administrative guidance of general applicability has been issued under § 2716.
 
In order to provide insured group health plan sponsors time to implement any changes required as a result of the regulations or other guidance, the Departments anticipate that the guidance will not apply until plan years beginning a specified period after issuance.

For more information regarding the delay, you may view Notice 2011-1 by clicking here.