December 2016
Vol. 6 No. 5
In This Issue
EEOC To Collect Summary Data
Social Security Earnings Base to Increase
IRS Announces 2017 401(k) Contribution Limits
2017 FSA Contribution Limit Raised
Workplace Injuries on the Decline
PCORI Fee to Increase in 2017
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and affiliated organizations, enabling them to realize their mission while maintaining their
status as economically viable entities.
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EEOC To Collect Summary Pay Data on EEO-1 Form Beginning in 2018
The Equal Employment Opportunity Commission (EEOC) has published revisions to the annual
EEO-1 report that require employers with 100 or more employees to submit annual EEO-1
reports that include W-2 pay and hours worked data for their entire workforce. The EEOC and
the Office of Federal Contract Compliance Programs will monitor and test employer data and
investigate pay practices of those employers whose data suggests indefensible pay disparities.
The first modified reports will be required to be filed in March 2018. Rather than file EEO-1
reports as usual in the fall of 2017, the revised EEO-1 pay data report must be filed by March
31, 2018. In subsequent years, March 31 will be the annual filing deadline. Thus, employers will
need to pull W-2 pay data only once a year for both tax and EEO-1 reporting purposes. EEO-1
reports for 2016 will be filed as usual without the pay data.
Social Security Earnings Base to Increase in 2017
The Social Security Administration has announced that the maximum amount of earnings
subject to the Social Security tax will climb 7.3% to $127,200 in 2017, up from $118,500 in 2015
and 2016. The worker's share of Social Security payroll tax is 6.2% of eligible wages. Employers
likewise pay a 6.2% tax on eligible wages. Self-employed individuals pay the employer's and
employee's share of the tax.
The jump in the taxable-earnings cap, the largest one-year increase since 1983, reflects rising
wages and the fact that federal law kept the taxable maximum unchanged in 2016 due to the
absence of a cost-of-living increase. The cost-of-living figure also plays a major part in
determining premiums for Medicare Part B, which covers doctor visits and other types of
outpatient care for elderly and disabled Americans.
IRS Announces 2017 401(k) Contribution Limits
For plan year 2017, maximum employee 401(k) contributions remain at $18,000 with an
additional $6,000 "catch-up" contribution allowed for those age 50 or older. Maximum
contributions from employer and employee combined will rise by $1,000. The IRS announced
the changes in Notice 2016-62. Annual limits and maximums for 401(k) and similar defined
contribution retirement plans are largely holding steady due to the small increase in the costof-living index, which rose by 1.09% between the third quarters of 2015 and 2016. Employers
can contribute an additional $1,000 next year even if plan participants contribute to the
individual limit. The annual defined contribution limit from all sources increases from $53,000
to $54,000 (plus the $6,000 catch-up if age 50 or older), or 100 percent of an employee's
compensation. The annual ceiling on employee compensation used to calculate employee
deferrals and employer matching contributions is increasing from $265,000 to $270,000. The
limit used to define a highly compensated employee for nondiscrimination testing remains at
$120,000, while the dollar limit for defining key employees in a top-heavy plan moves from
$170,000 to $175,000.
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2017 FSA Contribution Limit Raised to $2,600
For 2017, the voluntary employee salary reduction limit for contributions to health FSAs will
increase to $2,600. This and other benefits limitations, including caps for qualified
transportation benefits and adoption assistance programs, were published by the Internal
Revenue Service in Revenue Procedure 2016-55, released on October 25. FSAs can be funded
on a pretax basis by employees, employers or both. The $2,600 annual cap applies to the total
of both employee and employer contributions to a health FSA. Since 2013, plans have been
able to offer a carryover or grace period option for handling unused funds in a health FSA at
year-end.
Workplace Injuries on the Decline
Occupational injuries and illnesses have been falling for most of the last 13 years and that trend
continued in 2015, according to a report released by the Bureau of Labor Statistics. Private
employers reported about 2.9 million nonfatal workplace injuries and illnesses to the
Occupational Safety and Health Administration (OSHA) in 2015, a rate of three cases per 100
full-time equivalent (fte) workers, the lowest recorded rate since 2002. That's 48,000 fewer
cases than the previous year. Six of the 19 private industry sectors reported a decline in the
rate of injuries and illnesses in 2015 including health care and social assistance. The incident
rate in Pennsylvania for 2015 was 3.5 incidents per 100 fte workers. The national hospital
incident rate was 6.0 per 100 fte workers while the national nursing and residential care facility
incident rate was 6.8 per 100 fte workers.
PCORI Fee to Increase in 2017
The annual fee to fund the Patient Centered Outcomes Research Institute (PCORI), paid by
employers that sponsor self-insured health plans and by commercial group health insurance
providers, will increase next year by 9 cents per plan enrollee. The fee was created by the
Affordable Care Act to pay for research on the clinical effectiveness of medical procedures and
is assessed for each plan year ending after September 30, 2012 and before October 1, 2019.
The amount of the fee is adjusted each year for inflation. IRS Notice 2016-64 provides that the
PCORI fee for plan years ending on or after October 1, 2016, and before October 1, 2017,
including 2016 calendar year plans, is $2.26 per person covered under the applicable health
plan, up from $2.17 for the previous plan year.
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