Innovative Benefit Planning Blog

After several very quiet months this year, April saw renewed compliance activity. The IRS provided guidance on transportation fringe benefits unused due to COVID-19 workplace changes and announced inflation-adjusted amounts for HSAs and HRAs. The Centers for Medicare & Medicaid Services (CMS) announced Medicare Part D rates and the parameters and thresholds for qualified retiree prescription drug coverage. The Department of the Treasury and the IRS issued a proposed rule to base Marketplace premium tax credit (PTC) eligibility on the cost of family health insurance coverage rather than individual coverage to fix the “family glitch” related to PTC eligibility.Treasury Reminds Employers that Unused Transportation Fringe Benefits Cannot Be Cashed Out or Deposited in FSAThe Department of the Treasury released Information Letter 2022-0002 in which the Office of Associate Chief Counsel (Employee Benefits, Exempt Organizations, and Employment Taxes) reminded employers the Internal Revenue Code (Code) prohibits cafeteria plans from offering qualified…

The IRS issued Revenue Procedure 2022-24, to announce the 2023 inflation adjusted amounts for health savings accounts (HSAs) under Section 223 of the Internal Revenue Code (Code) and the maximum amount employers may contribute for excepted benefit health reimbursement arrangements (HRAs). Significant increases to the limits are a result of the recent spike in inflation seen in the U.S. HSA Limits For calendar year 2023, the HSA annual limitation on deductions for an individual with self-only coverage under a high deductible health plan is $3,850. The 2023 HSA annual limitation on deductions for an individual with family coverage under a high deductible health plan is $7,750. The IRS guidance provides that for calendar year 2023, a “high deductible health plan” is defined as a health plan with an annual deductible that is not less than $1,500 for self-only coverage or $3,000 for family coverage, and the annual out-of-pocket expenses (deductibles, copayments,…

The U.S. Equal Employment Opportunity Commission (EEOC) has announced that the 2021 EEO-1 Component 1 data collection portal is now open. Eligible employers have until May 17, 2022, to submit data to the portal. The EEO-1 Component 1 report is a mandatory annual data collection that requires all private sector employers with 100 or more employees, and federal contractors with 50 or more employees meeting certain criteria, to submit demographic workforce data, including data by race/ethnicity, sex and job categories. The filing by eligible employers of the EEO-1 Component 1 Report is required under section 709(c) of Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e-8(c),  and 29 CFR 1602.7-.14 and 41 CFR 60-1.7(a). Employers can find additional eligibility information here. In an effort to modernize the filing process, the EEOC has rolled out additional self-service options for filers, as well as provided a…

Under the current Affordable Care Act (ACA) regulations, employer-based health insurance is deemed “affordable” if the employee’s contribution for self-only coverage does not exceed the affordability threshold in a given year (9.61% in 2022). Those who do not have access to affordable employer-based coverage may qualify for a premium tax credit through the healthcare marketplace. As a result of the current definition of affordability, an estimated 5 million people fall into what is known as the “family glitch,” which prevents them from receiving a subsidy through the marketplace as the determination of whether the coverage meets the affordability threshold is focused on the employee’s coverage, not the family member’s. On April 5, 2022, the Treasury Department and Internal Revenue Service (IRS), released a proposed rule that, if enacted, would address this policy loophole in the ACA. This proposed rule is a result of an Executive Order President Biden signed in…

In a 414-5 bipartisan vote, the House of Representatives has passed a bill that, if enacted, is said to improve the retirement savings system in the United States by expanding coverage and increasing retirement savings. The Securing a Strong Retirement Act, colloquially known as Secure Act 2.0 builds on the Setting Every Community Up for Retirement Enhancement Act (SECURE), which was signed into law in December 2019. Some highlights from Secure Act 2.0, include: Most employers would be required to automatically enroll eligible workers in NEW 401(k) plans with an initial 3% contribution rate. The contribution rate would then increase on an annual basis until the contribution reaches 10% of the employee’s salary. Eligible employees would have the opportunity to opt out of enrollment or select a different contribution rate Increase in the age for mandatory distributions to begin. Starting January 1, 2022, the age would increase from 72 to…

In May 2020, the Department of Homeland Security (DHS) instituted a temporary policy which allowed employees to present expired List B identification documents for I-9 purposes. As a reminder, Form I-9 is used to verify the identity and employment authorization of individuals hired for employment in the United States. This relief was temporary and initiated as a means to lessen some of the burdens imposed on issuing authorities as they struggled to timely renew documents in the early stages of the COVID-19 pandemic.Starting May 1, 2022, employers will no longer be able to accept expired identification documents when verifying employee work eligibility for Form I-9. Employers who accepted expired documents between May 1, 2020 and April 30, 2022 will be required to update the Form I-9 of current employees with an unexpired document by July 31, 2022. Acceptable documentation includes a renewed version of the previously presented expired List B…

President Biden recently signed The Consolidated Appropriations Act, 2022 (CAA) into law. As part of the 2022 CAA, COVID-related telehealth coverage can be covered at no cost-share for High Deductible Health Plans (HDHPs) in a similar fashion to what was allowed under the CARES Act starting April 1, 2022 through December 31, 2022. The Coronavirus Aid, Relief and Economic Security Act (CARES Act) allowed first-dollar telehealth coverage under HDHPs. This relief allowed participants to utilize telehealth services prior to satisfying the plan’s deductible without risk of disqualification, which would prevent continuing contributions to a health savings account (HSA). The relief afforded under the CARES Act ended December 31, 2021, thus highlighting a need for additional relief, either temporary or permanent. While it is unclear whether permanent legislation expanding telehealth coverage in this manner will be enacted, the new relief, although temporary, comes as welcome news to participants and plan sponsors.This…