In the midst of everything going on, we wanted to point out a few “under the radar” implications of IRS Notice 2020-23. The Notice, issued on April 9th, provides that tax-related deadlines that fall between April 1, 2020 and July 14, 2020 (the “delay period”) are automatically extended to July 15, 2020.
Delayed 5500s. Most plan sponsors hoping for Form 5500 relief will have to wait for additional guidance since only a small group of plans have Form 5500 deadlines fall during the delay period. For example, the regular Form 5500 due date for calendar year plans (July 31st) falls just outside of the delay period. We note that the DOL has authority under the CARES Act to provide additional Form 5500 relief.
https://www.employeebenefitslawblog.com/wp-content/uploads/2022/10/logo_vertical-v2.png00adminhttps://www.employeebenefitslawblog.com/wp-content/uploads/2022/10/logo_vertical-v2.pngadmin2020-04-20 14:27:132020-05-01 10:18:08Relief . . . Just a Little Bit – IRS Notice 2020-23: Limited Extensions of Form 5500
We’re interrupting our regular programming to let you know that Holland & Hart has launched a new Coronavirus Resource Site.
The Resource Site offers practical guidelines and proactive solutions to help companies protect their business interests and their greatest asset – their workforce. With timely content authored by a multidisciplinary team of experienced practitioners across the firm, the Resource Site consolidates information and resources in one place to help businesses identify questions and address challenges to manage the legal, human, and safety threats of COVID-19.
We’re regularly updating the Resource Site with fresh content as the COVID-19 outbreak itself and the legal and regulatory responses continue to evolve. We encourage you to visit the Resource Site and welcome you to subscribe to receive alerts from Holland & Hart’s Coronavirus Task Force.
Hardship Distributions. It is becoming clearer that COVID-19 may present serious financial difficulties for individuals and employees. Employers and plan administrators should expect to receive inquiries from participants regarding access to retirement savings. COVID-19 could form the basis for a hardship distribution depending upon the terms of the employer-sponsored retirement plan. Most plans limit hardship distributions to the IRS “safe harbor” reasons. The safe harbor definition of permissible hardship expenses includes expenses for medical care (for the employee, employee’s spouse, employee’s dependents or employee’s primary beneficiary) to the extent the care would be deductible under Code Section 213(d). The safe harbor definition also includes expenses and losses incurred by the employee as a result of a FEMA declared disaster.
Health Plan Coverage of COVID-19. Colorado has become the latest state to instruct insured health plans to cover COVID-19 testing and benefits (such as office visits) at no cost to the member. The Colorado guidance is available here. The directive also encourages promotion of telemedicine programs and easing restrictions on prescription refills. Other states that have similar directives include California, Oregon, Washington, and New York. Employers sponsoring insured health plans in these states and Colorado should work with their insurer to confirm that these requirements are being met.
The IRS also clarified in Notice 2020-15 that the cost of testing for or treatment of COVID-19 will not be disqualifying coverage with respect to health savings account (HSA) eligibility for individuals covered by a high deductible health plan (HDHP).
After being on the verge of enactment last spring
but failing to pass, the SECURE Act is now law. The Setting Every Community Up
for Retirement Enhancement Act of 2019 – the SECURE Act – was enacted on
December 20, 2019 as part of the Further Consolidated Appropriations Act, 2020.
Although this legislation is considered major retirement plan legislation, it doesn’t have many immediate impacts on most employer retirement plans. Plan sponsors need to pay attention to the following items – for the most part, the other changes (such as pooled employer plan opportunities and annuity payouts) do not require immediate action.
https://www.employeebenefitslawblog.com/wp-content/uploads/2022/10/logo_vertical-v2.png00adminhttps://www.employeebenefitslawblog.com/wp-content/uploads/2022/10/logo_vertical-v2.pngadmin2020-03-10 13:04:252020-03-10 14:17:23We Interrupt this Program – What in the SECURE Act Do Retirement Plan Sponsors Need to Pay Attention to in 2020?
In the wee hours of December 2019, Congress revived the
PCORI fee and filing obligations of employer sponsors of self-insured group
health plans.
In accordance with the requirements of the Affordable Care
Act, employer sponsors of self-insured group health plans were required to file
an IRS Form 720 and pay the Patient-Centered Outcomes Research Institute fee
(PCORI) by July 31st of the year following last day of the plan year end (e.g.,
December 31, 2018 Plan Year End; employers should have filed the Form 720 by
July 31, 2019).
https://www.employeebenefitslawblog.com/wp-content/uploads/2022/10/logo_vertical-v2.png00adminhttps://www.employeebenefitslawblog.com/wp-content/uploads/2022/10/logo_vertical-v2.pngadmin2020-03-04 11:21:162020-03-04 11:21:20You’ve Got Another PCORI Fee Coming!: Congress revives the PCORI fee and filing obligations
Owners and employees of smaller organizations often find
themselves stretched in many directions.
With all of the demands on one’s time associated with operating a
business, it is not uncommon to see attention to the organization’s medical and
other benefit plans pushed to the back burner.
As a result, smaller organizations tend to rely heavily on their
benefits broker for their employee benefit plan documentation. While brokers can be an excellent resource,
plan sponsors need to be aware that the services provided by a broker can vary
widely from one broker to the next.
https://www.employeebenefitslawblog.com/wp-content/uploads/2022/10/logo_vertical-v2.png00adminhttps://www.employeebenefitslawblog.com/wp-content/uploads/2022/10/logo_vertical-v2.pngadmin2020-02-12 10:08:122020-02-12 10:08:15I Want to Know, Have You Ever Seen…your plan documents?
A plan’s definition of “compensation” tends to be one of the
trickier aspects of 401(k) administration.
Having been asked multiple times in the past 12-months whether deferrals
to a nonqualified deferred compensation plan need to be deducted before
determining eligible compensation for 401(k) deferrals (spoiler: they do), it
seems a blog post on the subject is in order.
The vast majority of 401(k) plan documents define
compensation by starting with one of the following base definitions: W-2 (Box
1) compensation; Section 3401(a) compensation; or Section 415 compensation (the
specifics of these base definitions are beyond the scope of this post). Each definition has its nuances with respect
to whether certain types of compensation should be either included or excluded
from the base definition (e.g., fringe benefits or amounts realized from the
exercise of stock options).
https://www.employeebenefitslawblog.com/wp-content/uploads/2022/10/logo_vertical-v2.png00adminhttps://www.employeebenefitslawblog.com/wp-content/uploads/2022/10/logo_vertical-v2.pngadmin2020-01-22 14:43:382020-01-22 14:43:40The Long and Winding Road… of 401(k) plan compensation definitions
Relief . . . Just a Little Bit – IRS Notice 2020-23: Limited Extensions of Form 5500
/in 401(k) Plans, 403(b) plans, Defined Benefit Plans, DOL, Equity Compensation, Executive Compensation, Health & Welfare Plans, IRS, Retirement PlansBy Kevin Selzer and Lyn Domenick
In the midst of everything going on, we wanted to point out a few “under the radar” implications of IRS Notice 2020-23. The Notice, issued on April 9th, provides that tax-related deadlines that fall between April 1, 2020 and July 14, 2020 (the “delay period”) are automatically extended to July 15, 2020.
Delayed 5500s. Most plan sponsors hoping for Form 5500 relief will have to wait for additional guidance since only a small group of plans have Form 5500 deadlines fall during the delay period. For example, the regular Form 5500 due date for calendar year plans (July 31st) falls just outside of the delay period. We note that the DOL has authority under the CARES Act to provide additional Form 5500 relief.
Read moreCOVID-19: Retirement Plan Considerations
/in Retirement PlansBy Kevin Selzer and Brenda Berg
We’re interrupting our regular programming to let you know that Holland & Hart has launched a new Coronavirus Resource Site.
The Resource Site offers practical guidelines and proactive solutions to help companies protect their business interests and their greatest asset – their workforce. With timely content authored by a multidisciplinary team of experienced practitioners across the firm, the Resource Site consolidates information and resources in one place to help businesses identify questions and address challenges to manage the legal, human, and safety threats of COVID-19.
We’re regularly updating the Resource Site with fresh content as the COVID-19 outbreak itself and the legal and regulatory responses continue to evolve. We encourage you to visit the Resource Site and welcome you to subscribe to receive alerts from Holland & Hart’s Coronavirus Task Force.
Hardship Distributions. It is becoming clearer that COVID-19 may present serious financial difficulties for individuals and employees. Employers and plan administrators should expect to receive inquiries from participants regarding access to retirement savings. COVID-19 could form the basis for a hardship distribution depending upon the terms of the employer-sponsored retirement plan. Most plans limit hardship distributions to the IRS “safe harbor” reasons. The safe harbor definition of permissible hardship expenses includes expenses for medical care (for the employee, employee’s spouse, employee’s dependents or employee’s primary beneficiary) to the extent the care would be deductible under Code Section 213(d). The safe harbor definition also includes expenses and losses incurred by the employee as a result of a FEMA declared disaster.
Read moreCOVID-19: Developments in Employee Benefits
/in Health & Welfare PlansBy Kevin Selzer
Health Plan Coverage of COVID-19. Colorado has become the latest state to instruct insured health plans to cover COVID-19 testing and benefits (such as office visits) at no cost to the member. The Colorado guidance is available here. The directive also encourages promotion of telemedicine programs and easing restrictions on prescription refills. Other states that have similar directives include California, Oregon, Washington, and New York. Employers sponsoring insured health plans in these states and Colorado should work with their insurer to confirm that these requirements are being met.
The IRS also clarified in Notice 2020-15 that the cost of testing for or treatment of COVID-19 will not be disqualifying coverage with respect to health savings account (HSA) eligibility for individuals covered by a high deductible health plan (HDHP).
Read moreWe Interrupt this Program – What in the SECURE Act Do Retirement Plan Sponsors Need to Pay Attention to in 2020?
/in 401(k) Plans, 403(b) plans, 457(b) plans, Defined Benefit Plans, ERISA, Governmental Plans, Legislation, Retirement Plans, SECURE Actby Brenda Berg
After being on the verge of enactment last spring but failing to pass, the SECURE Act is now law. The Setting Every Community Up for Retirement Enhancement Act of 2019 – the SECURE Act – was enacted on December 20, 2019 as part of the Further Consolidated Appropriations Act, 2020.
Although this legislation is considered major retirement plan legislation, it doesn’t have many immediate impacts on most employer retirement plans. Plan sponsors need to pay attention to the following items – for the most part, the other changes (such as pooled employer plan opportunities and annuity payouts) do not require immediate action.
Read moreYou’ve Got Another PCORI Fee Coming!: Congress revives the PCORI fee and filing obligations
/in Health & Welfare Plansby Bret Busacker
In the wee hours of December 2019, Congress revived the PCORI fee and filing obligations of employer sponsors of self-insured group health plans.
In accordance with the requirements of the Affordable Care Act, employer sponsors of self-insured group health plans were required to file an IRS Form 720 and pay the Patient-Centered Outcomes Research Institute fee (PCORI) by July 31st of the year following last day of the plan year end (e.g., December 31, 2018 Plan Year End; employers should have filed the Form 720 by July 31, 2019).
Read moreI Want to Know, Have You Ever Seen…your plan documents?
/in Cafeteria Plans, ERISA, Health & Welfare Plansby Ben Gibbons
Owners and employees of smaller organizations often find themselves stretched in many directions. With all of the demands on one’s time associated with operating a business, it is not uncommon to see attention to the organization’s medical and other benefit plans pushed to the back burner. As a result, smaller organizations tend to rely heavily on their benefits broker for their employee benefit plan documentation. While brokers can be an excellent resource, plan sponsors need to be aware that the services provided by a broker can vary widely from one broker to the next.
Read moreThe Long and Winding Road… of 401(k) plan compensation definitions
/in 401(k) Plans, Executive Compensation, Retirement Plansby Ben Gibbons
A plan’s definition of “compensation” tends to be one of the trickier aspects of 401(k) administration. Having been asked multiple times in the past 12-months whether deferrals to a nonqualified deferred compensation plan need to be deducted before determining eligible compensation for 401(k) deferrals (spoiler: they do), it seems a blog post on the subject is in order.
The vast majority of 401(k) plan documents define compensation by starting with one of the following base definitions: W-2 (Box 1) compensation; Section 3401(a) compensation; or Section 415 compensation (the specifics of these base definitions are beyond the scope of this post). Each definition has its nuances with respect to whether certain types of compensation should be either included or excluded from the base definition (e.g., fringe benefits or amounts realized from the exercise of stock options).
Read more