Easy Money…2022 IRS Limits Announced Today

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by Lyn Domenick

The IRS has announced the 2022 cost of living adjustments to qualified plan limits. As expected, many of the limits increased significantly compared with prior years. Below are the highlights, and our full historical chart can be found here for easy reference.

401(k), 403(b), Profit-Sharing Plans, etc.
2022 2021 2020
Annual Compensation 305,000 290,000 285,000
Elective Deferrals 20,500 19,500 19,500
Catch-up Contributions 6,500 6,500 6,500
Defined Contribution Limit 61,000 58,000 57,000
ESOP Distribution Limits 1,230,000
245,000		 1,165,000
230,000		 1,150,000
230,000
Defined Benefit Limit 245,000 230,000 230,000
HCE Threshold 135,000 130,000 130,000
Key Employee 200,000 185,000 185,000
457 Elective Deferrals 20,500 19,500 19,000
Taxable Wage Base 147,000 142,800 137,700

Oh Won’t You Stay…A Little Bit Longer…Because There’s No Need to Sign Your Distribution Form in Person

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by Elizabeth Nedrow and Becky Achten

In June 2020, the IRS issued Notice 2020-42 providing temporary relief from the physical presence requirement for certain participant distribution and beneficiary designation elections required to be witnessed by a notary public or plan representative.  This temporary relief was scheduled to expire June 30, 2021, and now has again been extended by the IRS.

As the COVID-19 pandemic continues, the IRS issued Notice 2021-40, again extending the temporary relief through the 12-month period ending June 30, 2022, as long as the prior requirements are met.  See our January 25, 2021 blog posting for a summary of the requirements. Read more

This is the End: Employers Must Provide Notice of the Expiring COBRA Subsidy Period

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by Brenda Berg

The COBRA subsidy from COVID-19 stimulus bill – The American Rescue Plan Act of 2021 (ARPA) – is nearing an end and in many cases requires employers to provide notices by September 15. The COBRA subsidy covered 100% of COBRA premiums for assistance-eligible individuals for periods of coverage beginning on or after April 1, 2021 through September 30, 2021. We previously covered the details of the subsidy in these posts: These Boots Are Made For Walking…But If You Quit, You Might Not Get the COBRA Subsidy and Lean on Me…New Guidance on Federal COBRA Subsidy. Because eligible individuals have 60 days to elect COBRA, there are still a couple months of coverage periods for which individuals may still be able to elect the subsidy. Read more

Here Comes the Sun: The DOL Intends to Shine the Light on Mental Health Parity

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by Bret F. Busacker

We previously blogged about the new Mental Health Parity and Addiction Equity Act (MHPAEA) reporting and disclosure requirements established by the Consolidated Appropriation Act, 2021 (CAA).

As a refresher, employers and carriers that sponsor group health plans are now required to provide upon request a full analysis of the process followed by the plan in establishing non-quantitative treatment limitations (NQTLs) for the plan and the impact these NQTL’s have on mental health and substance use disorder (MH/SUD) benefits provided by the plan.  This disclosure requirement went into effect on February 10, 2021.

The DOL has recently signaled its intent to focus on MHPAEA issues in filing suit against United Healthcare Insurance Company (“UHIC”) and United Behavioral Health (“UBH”).   Read more

I Can’t Go For That, No Balance Billing

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by Leslie Thomson

The Consolidated Appropriations Act of 2021 (“CAA”) established, among other things, new protections from surprise billing and excessive cost-sharing for consumers receiving health care items and services (“No Surprises Act”).

Most group health plans and health insurance issuers that offer group or individual health insurance coverage have a network of providers and health care facilities that agree to accept a specific payment amount for their services. Providers and facilities that are not part of a plan’s or issuer’s network usually charge higher amounts than the in-network providers and facilities. Group health plans and issuers typically do not cover the entire out-of-network costs, leaving the individual with higher costs than if they had been seen by an in-network provider. In many cases, the out-of-network provider may bill the individual for the difference between the billed charge and the amount paid by their plan or insurance, unless prohibited by state law (known as “balance billing”). Read more

Here We Go Again, PCORI’s Back in Town

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By Benjamin Gibbons

For those employers that sponsor a self-insured health plan, it’s important to be aware that the deadline for your 2021 PCORI filing is August 2, 2021. This deadline applies for plan years ending on December 31, 2020 (or any others between October 1, 2020 and October 1, 2021).  If you haven’t yet made your PCORI filing on IRS Form 720, we recommend doing so as soon as possible. Read more

E-P-C-R-S, find out what it means to me … new IRS Correction Guidance

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by Lyn Domenick

On July 16, 2021, the IRS released updated Employee Plans Compliance Resolution System (EPCRS) guidance for Plan corrections in the form of Rev. Proc. 2021-30. The changes affect the three programs offered by the IRS for correction of plan failures: Self-Correction Program (SCP), Voluntary Correction Program (VCP) and Audit Closing Agreement Program (Audit CAP). The principal changes outlined below are effective as of July 16, 2021, unless otherwise indicated. Read more

Time Has Come Today…For Form 5500 Season

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By Benjamin Gibbons

Days are getting longer, temperatures are getting warmer, plants are looking greener, schools are letting out, Brood X cicadas are emerging…it can only mean one thing…5500 season is approaching.

However, unlike the cicadas and their 17-year cycle, the Form 5500 filing requirements arise every summer for calendar year-end ERISA covered retirement plans and health and welfare plans that cover at least 100 participants.  While it may be easy enough to file an extension and hit the snooze button until October, now is great time for plan sponsors to start thinking about their 5500 obligations. Read more

Baby, What a Big Surprise! Right Before My Very Eyes…

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by Becky Achten

The No Surprises Act (part of the Consolidated Appropriations Act introduced earlier this year) is poised to eliminate some of the surprises that group health plan participants encounter from unexpected charges.  One way the new legislation intends to accomplish this is with Advanced Explanation of Benefits (EOBs). Read more

Lean on Me . . . New Guidance on Federal COBRA Subsidy

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By Kevin Selzer

We posted on April 6th about the COBRA subsidy that was made available through the American Rescue Plan Act of 2021 (ARPA).  In short, the law gives certain individuals who are entitled to COBRA due to a reduction of hours or involuntary termination of employment a 100% subsidy for health coverage that is continued under COBRA or equivalent state laws. Read more