Contact Us for More Information

Employee Benefits Changes in 2018

Posted by Paul D. Woodard | Jan 26, 2018 | 0 Comments

Benefits 20change

With each New Year comes the inevitable changes to employee benefits that affect plan sponsors, administrators, and participants. These changes can involve adjustments to the individual plan benefits, plan eligibility, and new state and federal laws. Employers and plan administrators should review all relevant changes to make sure they understand the new rules and the impact of employee benefit changes in 2018.

Tax Law Changes on Employee Benefits

The most wide-reaching changes of 2018 come with the passage of the new tax bill. There are two primary ways the tax bill could lead to employee benefit changes, including:

  • End of the individual mandate to purchase health coverage; and
  • Changes to tax deductibility of executive compensation.

The end of the individual mandate for healthcare coverage may lead to an increase in the number of employees and their family members who will not buy health insurance. If an employer does not offer healthcare benefits to all employees or restricts eligibility to certain employees who work a minimum number of hours, employers may consider expanding eligibility as a benefit to attract and/or retain workers.

However, the changes to the individual mandate do not affect an employer's requirement to provide health insurance under the Affordable Care Act (“ACA”). Employers with 50 or more full-time employees must still offer the minimum coverage requirements or face potential penalties. Employers are also still required to comply with the ACA's reporting obligations.

The tax law will also change executive compensation for some companies by eliminating the tax exemption for commission-based and performance-based pay. This change applies to the company CEO, CFOs, and three top salaried employees. Companies who previously took advantage of this significant tax exemption may want to reevaluate their executive compensation packages for 2018.

Other 2018 Considerations

Employees with employer-provided health coverage may not have enrolled their spouse or children in prior years because their family could have obtained coverage at a lower rate through some other program. As insurance coverage rates change and program eligibility changes, family members may see a benefit in getting covered under their spouse's employer's benefit plan. Employers may see a significant change in the number of participants during open enrollment periods in the coming year.

Health care premiums will increase for a number of employers and employees in the coming year. For some employees, the increased cost of health insurance may lead to a change in healthcare plans during open enrollment. Increased costs in health benefits may also lead some employees to decrease contributions to retirement plans, life insurance, or other employee benefits.

Before the New Year, many benefit plans send out notices to participants regarding changes that will go into effect. Unfortunately, when employees get too many email updates and notifications throughout the year, they often disregard these important notices. As a result, employees may later lodge complaints regarding a change in benefits they were otherwise unaware of. Employers should be ready to field questions from employees regarding changes to their individual benefit plans and know where to direct employees to get the answers they need.

If you have any questions about how employee benefits will change in 2018 and how those changes will impact your company, Butterfield Schechter LLP is here to help. We are San Diego County largest law firm focusing its law practice on employee benefits law. Contact our office today with any questions on how we can help you and your business succeed.

About the Author

Paul D. Woodard

Paul Woodard practices in the areas of Employee Benefits, Employee Stock Ownership Plans, Pension and Profit Sharing Plans, ERISA, ERISA Litigation, Business Law, Qualified Domestic Relations Orders (QDROs), and Estate Planning.


There are no comments for this post. Be the first and Add your Comment below.

Leave a Comment

Retirement Plans

We help establish a customized plan that meets regulatory requirements as a tax qualified plan. Following implementation, our attorneys can assist clients and their plan administrator with regular reviews and updates to help with regulatory compliance for the plan's operation, and continued effectiveness in meeting the client's specific goals.


We are dedicated to employee ownership. When you come to us for ESOP services, you receive influential legal counsel who stand beside you to help you stay informed, in compliance, and abreast of the latest developments-all to help you realize your plan goals as fully and effectively as possible.


A QDRO is a specially designed court order that is required for the division of retirement benefits in a family law case. Many family law attorneys do not possess the expertise necessary to divide retirement benefits or stock options upon divorce. We have extensive experience in dividing qualified plans, government plans, IRAs and stock options between the employee spouse and non-employee spouse.

Butterfield Schechter LLP provides the information in this website as a service to its clients and visitors to the site. This website is for information purposes only and is not intended to create, and receipt of it does not constitute, an attorney-client relationship. The information in this website is provided "as is," and while the information in this website is updated periodically, additional facts or future developments may affect subjects contained herein, and no guarantee is given that the information provided is correct, complete, or up-to-date. Seek the advice of professional counsel before acting or relying upon any article, form, or information in this web site. To ensure compliance with the requirements imposed by the United States Treasury and the Internal Revenue Service, we inform you that any federal tax advice contained in this communication is not intended or written to be used, and cannot be used, for the purpose of: (1) avoiding penalties under the Internal Revenue Code or (2) promoting, marketing, or recommending to another person any transaction or matter addressed herein. Butterfield Schechter LLP has endeavored to comply with all known legal and ethical requirements in compiling this website. In the event that this communication does not conform with any laws or regulations of any state or country in which it may be received, Butterfield Schechter LLP will not accept legal representation based on this communication from a person in such a state or country. Electronic mail is provided as a convenience in communicating with the attorneys at Butterfield Schechter LLP. Contact by e-mail does not alone create an attorney-client relationship. Please remember Internet e-mail is not secure and messages sent to the firm or any of its employees or attorneys should not contain sensitive or confidential information. Thank you for visiting our site.