Better Late Than Never: IRS Issues Guidance Clarifying COBRA Premium Subsidy Rules

S&W Insight: The IRS clarified several trailing issues with respect to COBRA premium subsidies under the American Rescue Plan Act, including extended election periods, eligibility for other coverage, and rules about allocating premium credits among employers. In addition, a notice deadline is on the horizon.

Many employers have been grappling with the ramifications of the American Rescue Plan Act (“ARPA”) since it was enacted earlier this year. Among other provisions, ARPA provided a temporary subsidy for certain insurance premiums under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”).

We previously summarized this relief in the following SW Benefits Updates: “Help Is on the Way – Important Changes to COBRA under the American Rescue Plan Act,” “DOL Clarifies Key Provisions, Issues Model Notices for COBRA Relief under ARPA,” and “Ironing Out the Wrinkles – IRS Answers 86 Questions about COBRA Relief under the American Rescue Plan Act. Read More ›

Posted in Health & Welfare Plans, Health Care Reform | Tagged , , , , , ,

Share this Article:

For the Long Haul: SCOTUS Ruling Means ACA Coverage and Reporting Rules Here to Stay

Despite myriad legal challenges, the Affordable Care Act (“ACA”) remains the law of the land. We previously reported on the Supreme Court’s latest validation of the law in our SW Benefits Update, “Three Strikes You’re Out – The Affordable Care Act Survives a Third Legal Challenge.

The Court’s ruling means that employers and their group health plans must continue to comply with the requirements of the ACA, including its large employer shared responsibility provisions. For employers evaluating their ACA compliance strategies, here is a short refresher:

Large Employer Shared Responsibility Payments: Large employers can be subject to penalties if any full-time employee receives a premium tax credit and either (a) the employer fails to offer minimum essential coverage (“MEC”) to 95% of its full-time employees (and their dependents) or (b) the coverage is either not affordable or does not provide minimum value. Read More ›

Posted in Employee Benefits

Share this Article:

Credit Where Credit Is Due: IRS Offers Long-Sought Guidance on Employer Retention Credit Program

As we previously reported, the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) provided for an employee retention credit (“ERC”) designed to encourage employers to retain workers during the COVID-19 crisis.  In general, the ERC permits eligible employers to claim a refundable tax credit of a portion of qualified wages paid to employees over a given period.

Initially, the IRS issued guidance on ERCs in the form of online Frequently Asked Questions (the “FAQs”).  The FAQs were non-binding and subject to change.  As of March 1, 2021, the IRS published formal rules with respect to ERCs in Notice 2021-20 (the “Notice”).  Read More ›

Posted in Employee Benefits, Executive Compensation, Health & Welfare Plans, Health Care Reform, Qualified Retirement Plans | Tagged , , , , , , ,

Share this Article:

IRS Clarifies SECURE Act Changes to Qualified Automatic Contribution Arrangements

The IRS recently published Notice 2020-86 (the “Notice”), which provides clarification with respect to certain changes made by the Setting Every Community Up for Retirement Enhancement Act of 2019 (the “SECURE Act”). In particular, the Notice answers several outstanding questions related to the maximum default deferral rate for qualified automatic contribution arrangements.

As previously reported here, the SECURE Act raised the maximum permissible deferral rate for qualified automatic contribution arrangements to 15% of compensation from 10% of compensation for the second plan year and all subsequent plan years. The maximum deferral rate through the end of the first year remains set at 10% of compensation. Read More ›

Posted in Employee Benefits, Qualified Retirement Plans | Tagged , , , , , ,

Share this Article:

Finally, Some Good News: IRS Extends Certain ACA Reporting Deadlines and Transition Relief

As in prior years, the IRS has provided relief for employers preparing to comply with the Affordable Care Act’s (“ACA”) information reporting requirements in early 2021 for the 2020 calendar year. In particular, Notice 2020-76 (the “Notice”) extends the deadline to furnish Forms 1095-B and 1095-C to employees. The new deadlines are provided, below.

Original Deadline Extended Deadline
Form 1095-B (to employees) January 31, 2021 March 2, 2021
Form 1095-C (to employees) January 31, 2021 March 2, 2021

Importantly, the Notice does not extend the deadline for filing Forms with the IRS.  Instead, the deadline to file with the IRS remains February 28, 2021 (for paper filings) and March 31, 2021 (for electronic filings). Read More ›

Posted in Employee Benefits, Health & Welfare Plans, Health Care Reform | Tagged , , , , ,

Share this Article:

Enjoy the End of the Decade with Some Employee Benefit Plan Checklists

Each year, we publish health and welfare, cost-of-living, qualified retirement plan, and executive compensation plan checklists to help individuals and employers stay apprised of updates to the law of employee benefits.  We just published the last of these annual checklists.  In case you missed them, the links are below.

Happy Holidays!

2019 End of Year Plan Sponsor “To Do” List (Part 1) Health & Welfare

2019 End of Year Plan Sponsor “To Do” List (Part 2) Annual Cost of Living Adjustments

2019 End of Year Plan Sponsor “To Do” List (Part 3) Qualified Retirement Plans

2019 End of Year Plan Sponsor “To Do” List (Part 4) Executive Compensation

 

  Read More ›

Posted in Employee Benefits, Executive Compensation, Health & Welfare Plans, Health Care Reform, Qualified Retirement Plans | Tagged , , , , , , ,

Share this Article:

A Post-Thanksgiving Treat: IRS Extends Certain ACA Reporting Deadlines and Transition Relief

The IRS provided welcome news to employers preparing to comply with the Affordable Care Act’s (“ACA”) information reporting requirements in early 2020 for the 2019 calendar year. In particular, Notice 2019-63 (the “Notice”) extends the deadline to furnish Forms 1095-B and 1095-C to employees. The new deadlines are provided, below.

 

  Original Deadline Extended Deadline
Form 1095-B (to employees) January 31, 2020 March 2, 2020
Form 1095-C (to employees) January 31, 2020 March 2, 2020

Importantly, the Notice does not extend the deadline for filing Forms with the IRS. Instead, the deadline to file with the IRS remains February 28, 2020 (for paper filings) and March 31, 2020 (for electronic filings). Read More ›

Posted in Health & Welfare Plans, Health Care Reform | Tagged , , , , , , ,

Share this Article:

Form 5500 Penalty Relief Deadline Approaching for MEPs

On July 24, 2019, the Department of Labor (the “DOL”) issued Field Assistance Bulletin 2019-01 (the “Bulletin”), which provides transition relief to multiple employer plans (“MEPs”) that failed to comply with certain annual reporting requirements. 

The Bulletin focuses on a Form 5500 reporting requirement added by the Cooperative and Small Employer Charity Pension Flexibility Act, which requires MEPs to report on the Form 5500 all participating employers and an estimate of the percentage of contributions made by participating employers during the plan year.  This disclosure requirement first became effective for plan years beginning after December 31, 2013.             

The DOL has identified widespread and ongoing failure by MEPs to comply with the above reporting requirement.  Read More ›

Posted in Employee Benefits, Qualified Retirement Plans | Tagged , , , , ,

Share this Article:

Reassigning Section 1557: Trump Administration Proposes Reversal of Transgender Benefits Rule

In 2016, the Department of Health and Human Services (“HHS”) Office of Civil Rights issued final regulations implementing the nondiscrimination provisions of the Affordable Care Act (“Section 1557”), which prohibit the categorical refusal of health coverage to transgender participants and require that individuals be treated consistent with their self-selected gender identity. These regulations drew sustained legal challenges and prompted HHS to withdraw, revise and reissue the Section 1557 regulations (the “Proposed Regulations”).

In short, the Proposed Regulations would repeal large portions of the original nondiscrimination rules and would redefine the scope of various protections under Section 1557. Specifically, the Proposed Regulations negate the provisions of Section 1557 covering nondiscrimination based on sex and gender identity. Read More ›

Posted in Employee Benefits, Health & Welfare Plans, Health Care Reform | Tagged , , , , , ,

Share this Article:

Reopening the Floodgates: IRS Announces Expanded Determination Letter Program

As we previously reported, the Internal Revenue Service (the “Service”) scaled back its determination letter program for individually designed retirement plans effective as of January 1, 2017. In the intervening years, the Service received a multitude of comments requesting the reopening of the program.

Now, the Service has decided to offer a limited expansion of the determination letter program as outlined in Revenue Procedure 2019-20 (the “Revenue Procedure”). In particular, the Revenue Procedure provides that the Service will accept determination letter applications for both individually designed statutory hybrid plans and individually designed merged plans.

Hybrid Plans

The Revenue Procedure indicates that plan sponsors may submit determination letter applications for individually designed statutory hybrid plans during the twelve-month period beginning September 1, 2019 and ending August 31, 2020. Read More ›

Posted in Employee Benefits, Qualified Retirement Plans | Tagged , , , ,

Share this Article: