H.R.1864 - To amend the Internal Revenue Code of 1986 to simplify the antidiscrimination rules applicable to certain employee benefit plans.101st Congress (1989-1990)
|Sponsor:||Rep. Rostenkowski, Dan [D-IL-8] (Introduced 04/13/1989)|
|Committees:||House - Ways and Means|
|Latest Action:||House - 05/03/1989 Committee Hearings Held. (All Actions)|
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Summary: H.R.1864 — 101st Congress (1989-1990)All Information (Except Text)
Introduced in House (04/13/1989)
Amends the Internal Revenue Code to establish a new test for determining whether an employee health plan meets the new (section 89) nondiscrimination requirements for coverage and benefits. Considers a plan as meeting the requirements if: (1) it does not contain eligibility provisions that discriminate in favor of highly compensated employees; (2) the taxable benefit of any highly compensated employee is limited to 133 percent of the premium made available to 90 percent of the employees who are not in this category; and (3) the employer maintains at least one qualified plan that consists primarily of core health benefits and does not require employee weekly contributions of more than $10 per week ($25 for family coverage) (indexed for inflation), and at least 90 percent of all employees who are not highly paid employees are eligible to participate in such a plan.
Revises the definition of "highly compensated employee."
Increases from 17 1/2 hours to 25 hours per week the threshold number of work hours triggering requirements with respect to part-time employees. Adjusts benefits and requirements in connection with employees who work less than 30 hours per week.
Applies the requirements separately in connection with employees covered by a collective bargaining agreement.
Permits an employer to disregard leased employees in connection with requirements if specified conditions are met.
Imposes a 34 percent tax on employers in connection with amounts paid or incurred during any taxable year under a specified employee benefit plan that does not meet enumerated general criteria, including that it be in writing, be maintained exclusively for the benefit of employees, and provide for employee notice about benefits.
Repeals nondiscrimination provisions as applied to group-term life insurance.
Amends the Technical and Miscellaneous Revenue Act of 1988 to delay application of the requirements with respect to retired employees.
Requires employers to report to highly compensated employees amounts of taxable fringe benefits. Imposes a penalty for failure to report.