Don't HR Alone # 36 - Personnel Files, Travel Expenses, and Eating Disorders

CEO’s sightseeing in Spain may be deductible

Q The CEO of your corporation has decided that it is necessary for her to travel to Spain for two weeks in order to meet with prospective buyers and look over some potential corporate office sites. While she is there, she plans to spend five days shopping, watching bullfights, and going to the beach. Since most of her time away will be for business purposes, can she deduct the cost of her travel expenses? If an assistant buyer travels with her, can that person also deduct the costs of the trip?

A Possibly. An individual can deduct the cost of travel expenses incurred outside the United States only if the trip is primarily for business purposes. Travel costs must be allocated between nondeductible personal expenses and business expenses unless the time spent traveling outside the United States is one week or less or the time spent for personal purposes is less than 25 percent of the total time spent away from home. Also, allocation is not necessary if an employee spends less than 25% of her time outside the U.S. on personal activities. So, at first glance, it would appear that the trip cannot be deducted. (Allocation is not required for domestic travel, by the way).

There are exceptions to this rule, however. For example, no allocation for traveling costs to and from a destination would be necessary if a traveling employee is not related to his employer and is not a managing executive. This would be good news for the assistant buyer, but, since a managing executive is any employee who, by reason of his authority and responsibility, is authorized to decide upon the necessity of his business trip without being subject to an effective veto procedure, it is unlikely the CEO would fit into this category.

The CEO might still be able to avoid allocation, however, because another exception to the requirement to allocate expenses is a situation in which a traveling employee can establish that taking a vacation was not a major objective of the trip. To determine whether the major objective of a trip is to take a vacation, all the facts and circumstances relating to the trip must be considered and time spent on business activities in comparison with the time spent on personal activities are determining factors. If it is determined that a trip is primarily personal in nature, the entire reimbursement for the traveling expenses to and from the destination of the trip would be includible in the CEO’s income and wages even if she performs substantial business activities at the destination.

Connecticut enacts filing deadline changes, other tax provisions — CONNECTICUT — Withholding and Reporting

Information return filing deadlines. The Connecticut filing deadline for Form 1099 series and W-2 wage information returns is changed from the last day of February to January 31. The change applies to tax years beginning on or after January 1, 2017 and corresponds to the federal filing deadline for information returns. The filing threshold remains $600 or more, except the filing threshold for Form 1099-R information returns is $10 or more. (Act 17-147 (H.B. 7312), Laws 2017, effective July 7, 2017 and as noted.)

Recently terminated employee not entitled to inspect personnel file — PENNSYLVANIA — Individual rights

A recently terminated employee was not an "employee" and thus was not entitled to inspect her personnel file, according to the Inspection of Employment Records Law. The state high court concluded that the Act's definition of "employee" excludes former employees and reversed a contrary decision by the Commonwealth Court. The Act defines employee as "[a]ny person currently employed, laid off with reemployment rights or on leave of absence. The term ‘employee’ shall not include applicants for employment or any other person" (Thomas Jefferson University Hospitals, Inc. v. Pennsylvania Department of Labor and Industry, June 20, 2017, Wecht, D.).

Eating disorder is mental health condition subject to parity rules, FAQ says

The Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) applies to benefits a plan or issuer may offer for treatment of an eating disorder, according to a frequently asked question (FAQ) that the Departments of Labor (DOL), Health and Human Services (HHS) and the Treasury (Departments) have issued. The FAQ also requests comments on whether further clarification is needed on this and disclosure issues the Departments previously raised in Affordable Care Act Implementation FAQs Part 34.

Generally, MHPAEA requires that the financial requirements and treatment limitations imposed on mental health and substance use disorder (MH/SUD) benefits cannot be more restrictive than the predominant financial requirements and treatment limitations that apply to substantially all medical and surgical benefits. MHPAEA also imposes several disclosure requirements on group health plans and health insurance issuers.

The 21st Century Cures Act (Cures Act) was enacted on December 13, 2016. Among other things, the Cures Act contains provisions that are intended to improve compliance with MHPAEA by requiring the Departments to solicit feedback from the public on how to improve disclosure of the information required under MHPAEA and other laws.

Treatment of an eating disorder. The Departments’ regulations implementing MHPAEA define “mental health benefits” as benefits with respect to items or services for mental health conditions, as defined under the terms of the plan or health insurance coverage and in accordance with applicable federal and state law, which must be defined to be consistent with generally recognized independent standards of current medical practice.

Eating disorders are mental health conditions and, therefore, treatment of an eating disorder is a “mental health benefit” within the meaning of that term as defined by MHPAEA.

Furthermore, in light of section 13007 of the Cures Act, the Departments request comments on whether any additional clarification is needed regarding how the requirements of MHPAEA apply to treatment for eating disorders. Send comments with respect to eating disorders to e-ohpsca-mhpaea-eating-disorders@dol.gov by September 13, 2017.

SOURCE: FAQs about Mental Health and Substance Use Disorder Parity Implementation and the 21st Century Cures Act, Part 38, June 16, 2017.