The American Institute of Certified Public Accountants (AICPA) issued a new audit standard for employee benefit plans in July 2019. The new standard is commonly referred to as SAS 136, but its official name is “Statement on Auditing Standards (SAS) No. 136, Forming an Opinion and Reporting on Financial Statements of Employee Benefit Plans Subject to ERISA.” Although SAS 136 imposes new duties on auditors, plan sponsors also have increased responsibilities under this new standard.
Participants in dependent care assistance programs (DCAPs) will get the best of both worlds (at least in 2021) under new guidance from the Internal Revenue Service (IRS).
The American Rescue Plan Act of 2021 (ARPA) implemented a 100 percent COBRA subsidy for certain qualified beneficiaries beginning on April 1, 2021, and ending September 30, 2021. On May 18, 2021, more than a month into the subsidy period, the Internal Revenue Service (IRS) released Notice 2021-31. This guidance, provided in the form of questions and answers (Q&As)—86 Q&As!—addresses issues of interest to employers, including issues related to reporting the Medicare tax credit and receiving advance payment of payroll tax credits that exceed Medicare taxes owed and withheld. Here are the key takeaways for employers.
The first part of this two-part blog series focused on the Biden administration’s first 100 days and reviewed the administration’s legislative plans. The second part of the series addresses policy developments occurring at the executive branch agencies and independent agencies.
The Consolidated Appropriations Act (CAA), 2021 had far-reaching effects on employee benefit plans. One of the more onerous changes introduced by the CAA relates to the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA). MHPAEA requires that group health plans offering mental health and substance use disorder benefits (MH/SUD benefits) provide those benefits on no less generous terms than medical and surgical benefits.
April 30, 2021, marked President Joe Biden’s 100th day in office, and his administration has wasted little time advancing its policy priorities. At this moment, the administration is focusing most of its attention on repealing much of the policy accomplishments of the previous administration but can be expected to advance its own proposals in short time. Additionally, Democrats in the U.S. House of Representatives are looking for ways around the U.S. Senate’s legislative filibuster in order to advance their ambitious legislative agenda. Below is a very brief outline of the major labor and employment legislative actions of President Biden’s first 100 days.
On May 10, 2021, the Internal Revenue Service (IRS) announced the 2022 health savings account (HSA) annual contribution limit and the 2022 high deductible health plan (HDHP) definitional limit per Internal Revenue Code Section 223.
Retirement plans are increasingly subject to cybersecurity issues, and the U.S. Department of Labor (DOL) is taking notice. On April 14, 2021, the DOL published cybersecurity guidance “for plan sponsors, plan fiduciaries, record keepers and plan participants on best practices for maintaining cybersecurity, including tips” for hiring service providers and online security tips for participants. In recent years, DOL guidance that eased rules related to electronic communications to plan participants might have helped make participants more susceptible to phishing attempts that masquerade as official plan communications.
The new 100 percent premium subsidy applies to individuals eligible for Consolidated Omnibus Budget Reconciliation Act (COBRA) coverage due to either a reduction in hours or an involuntary termination of employment, and it applies for the period from April 1, 2021, to September 30, 2021. The U.S. Department of Labor (DOL) has already produced model notice forms and initial guidance consisting of a summary sheet and frequently asked questions (FAQs). Employers are still awaiting formal regulations and guidance from the Internal Revenue Service (IRS).
More than a year into the COVID-19 pandemic, employers are happy to be more focused on vaccine issues than on issues relating to furloughs and layoffs.
Less than a month after the American Rescue Plan Act of 2021 (ARPA) was signed into law, new U.S. Department of Labor (DOL) guidance and model forms are clearing up a number of employer concerns about the 100 percent COBRA coverage subsidy for continuing health benefits that runs from April 1, 2021, to September 30, 2021.
The U.S. Department of Labor’s (DOL) Employee Benefits Security Administration (EBSA) published EBSA Disaster Relief Notice 2021-01 in the nick of time on February 26, 2021. EBSA Disaster Relief Notice 2021-01 was released just two days before the date that certain benefit plan deadline extensions were potentially expiring. The DOL and the Internal Revenue Service (IRS) issued joint guidance on May 4, 2020, which provided that certain employee benefit plan deadlines for participants would be tolled or suspended during the COVID-19 “Outbreak Period,” which began on March 1, 2020, and which ends 60 days after the end of the COVID-19 national emergency. Certain deadlines applying to plan administrators were also tolled last year as set forth in EBSA Disaster Relief Notice 2020-01.
On February 26, 2021, the U.S. Department of Labor (DOL), U.S. Department of Health and Human Services (HHS), and the U.S. Department of the Treasury issued guidance entitled “FAQs About Families First Coronavirus Response Act and Coronavirus Aid, Relief, and Economic Security Act Implementation Part 44.” The guidance addresses frequently asked questions (FAQs) that stem from the requirements under the FFCRA and CARES Act that group health plans and issuers cover COVID-19 testing (including certain related items and services) and vaccinations without cost sharing during the public health emergency declared by HHS. The declared public health emergency is expected to be in place until at least the end of 2021.
On February 26, 2021, the U.S. Department of Labor, along with the U.S. Department of Health and Human Services and the U.S. Department of the Treasury, issued answers to new frequently asked questions (FAQs) interpreting certain provisions of the Families First Coronavirus Response Act and the Coronavirus Aid, Relief, and Economic Security (CARES) Act. This article reviews the portion of the FAQs that directly apply to employer vaccination incentive programs. Previous guidance addressed coverage requirements for COVID-19 vaccines and diagnostic testing.
The American Rescue Plan Act of 2021 (ARPA), which became law on March 11, 2021, provides a 100 percent subsidy of premiums under the Consolidated Omnibus Budget Reconciliation Act (COBRA) beginning on April 1, 2021, through September 30, 2021, with employers to recoup the missing premiums through Medicare tax credits.
On March 11, 2021, President Joe Biden signed the American Rescue Plan Act of 2021 (ARPA). The ARPA is the latest installment of COVID-19–related stimulus packages passed by Congress in the last 12 months. Similar to the Families First Coronavirus Response Act (FFCRA) and the Coronavirus Aid, Relief, and Economic Security Act (CARES) Act, the ARPA contains a number of employee benefit plan and executive compensation provisions, which are highlighted below.
We had pondered when this day would come. The doomsday scenario that the Pension Benefit Guaranty Corporation (PBGC) would become insolvent in five to six years is now old history. (The new estimated time of PBGC insolvency is the mid-2040s.) Plan participants, the plans, employers, unions, and the PBGC had all been patiently waiting for relief—and they have apparently been rewarded with the relief they were seeking.
On March 11, 2021, President Joe Biden signed into law the American Rescue Plan Act of 2021—a $1.9 trillion economic relief package. While the legislation marks the first major legislative victory for President Biden and the administration, it is the sixth federal legislative relief package aimed at addressing the COVID-19 pandemic and its economic fallout. The legislation continues some programs established in these previous efforts, but it also adds some important components. Set forth below are some of the major provisions of the American Rescue Plan Act.
In Announcement 2020-7, the Internal Revenue Service (IRS) announced employers’ deadline by which to adopt new plan documents related to Notice 2017-37. The new announcement informs employers that maintain defined contribution plans (e.g., 401(k) plans, profit-sharing plans, and money purchase plans) through the adoption of IRS pre-approved plan documents that they have until July 31, 2022, to adopt the new pre-approved plan documents restated as a result of the changes to the Notice 2017-37 requirements regarding retirement plan qualification, generally known as the 2017 Cumulative List.
The Consolidated Appropriations Act, 2021 (CAA) contained temporary relief measures aimed at addressing unused contributions to health flexible spending accounts (FSA) and dependent care assistance programs (DCAP).
The Consolidated Appropriations Act (CAA), 2021 includes a provision that modified and extended the Small Business Administration’s (SBA) Paycheck Protection Program (PPP). Specifically, Section 311 of the Additional Coronavirus Response and Relief provisions of the CAA provides for PPP second draw loans for eligible businesses. Employers seeking a PPP loan may apply through March 31, 2021. Below are answers to some key questions regarding second draw PPP loans.
Employers are facing uncertainty as to the expiration of the COVID-19 relief the U.S. Department of Labor (DOL) and Internal Revenue Service (IRS) issued in a joint guidance on May 4, 2020.
At the beginning of 2021, extensive changes in German employment law came into effect, including some of particular significance to employers. In addition, on January 19, 2021, the German Federal Government implemented restrictions on public life in order to contain the coronavirus pandemic that affect employers.
As COVID-19 vaccines become available to greater swaths of the population, many employers are considering ways to incentivize employees to get vaccinated. Incentives can take many forms, including extra pay, paid time off, gift cards, or tangible gifts. Employers that offer incentives to employees to get vaccinated may be creating group health plans under the Employee Retirement Income Security Act of 1974 (ERISA).
On January 20, 2021, the Puerto Rico Department of the Treasury (Departamento de Hacienda, commonly known as “Hacienda”) issued Administrative Determination No. 21-01 (AD 21-01), which provides that lump-sum distributions from the retirement plan for Puerto Rico government employees are eligible for direct and indirect rollovers into Puerto Rico–qualified retirement plans maintained by private-sector employers. In practice, however, this determination is unlikely to have much of an impact on the operation of private-sector employer plans.
Last year, in response to the COVID-19 pandemic, the United States Congress and the Puerto Rico Department of Treasury (Hacienda) granted favorable tax treatment to coronavirus-related distributions (CRDs) and participant loans from U.S.-qualified plans and Puerto Rico-qualified plans, respectively. Recently, both jurisdictions extended similar tax treatment to certain distributions, hardship withdrawals, and plan loans related to non-COVID-19 disasters.
The Consolidated Appropriations Act (CAA), 2021, enacted late in 2020, imposes a new requirement on group health plans to ensure compliance with the Mental Health Parity and Addiction Equity Act (MHPAEA). Unlike many of the other provisions of the CAA that affect group health plans, the MHPAEA requirement under CAA section 203 goes into effect very soon—on February 10, 2021.
For a host of legal and practical reasons, the only feasible alternative for disposing of the accounts of missing participants in a terminating 401(k) or other defined contribution retirement plan qualified only in Puerto Rico (commonly known as a “P.R.-only plan”) is, after making reasonable efforts to locate the missing participants, depositing with the proper state unclaimed property fund(s) the retirement money of those participants who cannot be located.
The U.S. Equal Employment Opportunity Commission (EEOC) recently issued its revamped proposed rules governing employer-sponsored wellness programs. These proposed rules have been a long time coming, with the EEOC’s prior rules on the topic having been invalidated by a court and then partially revoked. In this current proposal, the EEOC has issued two separate sets of regulations: one under the Americans with Disabilities Act (ADA) and one under the Genetic Information Nondiscrimination Act of 2008 (GINA).
On December 27, 2020, President Trump signed into law Congress’s spending bill, the Consolidated Appropriations Act (CAA), 2021, which included the Additional Coronavirus Response and Relief (ACRR) provisions that modified the Small Business Administration’s (SBA) Paycheck Protection Program (PPP). The PPP, a loan program designed to provide a direct incentive to businesses to retain their employees, was enacted under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. PPP borrowers are eligible for loan forgiveness if the funds are used for eligible payroll and non-payroll costs.