Many employee benefits are subject to annual dollar limits that are periodically updated for inflation by the IRS. The following commonly offered employee benefits are subject to these limits:
• High deductible health plans (HDHPs) and health savings accounts (HSAs);
• Health flexible spending accounts (FSAs);
• 401(k) plans; and
• Transportation fringe benefit plans.
The IRS typically announces the dollar limits that will apply for the next calendar year well in advance of the beginning of that year. This gives employers time to update their plan designs and make sure their plan administration will be consistent with the new limits.
The IRS has released Revenue Procedure 2020-45, which includes cost-of-living adjustments for employee qualified transportation fringe benefits for the 2021 taxable year, along with annually adjusted numbers for 2021 for a number of other tax provisions.
The combined monthly limit for transportation in a commuter highway vehicle and a transit pass remains unchanged from 2020 at $270. The monthly limit in 2021 for qualified parking is also unchanged from 2020, also at $270.
While any workers’ compensation claims can result in costly ramifications for your organization, one category of claim in particular—known as a “mega claim”—has the potential to carry significant consequences.
True to its name, a mega claim is characterized as an exceptionally large claim— typically totaling $3 million or more in incurred losses. In the realm of workers’ compensation, these claims usually stem from employees experiencing severe injuries or illnesses on the job.
Mega claims are not only expensive, but often lengthier and more complex in nature than a typical claim. Such claims can leave lasting impacts on your employees by way of life-altering injuries and illnesses, as well as your overall organization through hefty costs, lost time and the potential for severe reputational damage.
The Occupational Health and Safety Administration (OSHA) has been citing establishments for violations related to COVID-19. These citations have resulted in more than $1 million in penalties since the pandemic began.
OSHA announces new enforcement actions weekly. These announcements provide penalty totals and the number of establishments that receive citations. Taken together, these announcements provide insight on how OSHA is enforcing compliance with COVID-19 workplace safety guidelines.
Some common COVID-19 employer citations include failures to:
Employers that sponsor group health plans should provide certain benefit notices in connection with their plans’ open enrollment periods. Some of these notices must be provided at open enrollment time, such as the summary of benefits and coverage (SBC).
Other notices, such as the Women’s Health and Cancer Rights Act (WHCRA) notice, must be distributed annually. Although these annual notices may be provided at different times throughout the year, employers often choose to include them in their open enrollment materials for administrative convenience.
In addition, employers should review their open enrollment materials to confirm that they accurately reflect the terms and cost of coverage. In general, any plan design changes for 2021 should be communicated to plan participants either through an updated summary plan description (SPD) or a summary of material modifications (SMM).
The Affordable Care Act (ACA) imposes a dollar limit on employees’ salary reduction contributions to health flexible spending accounts (FSAs) offered under cafeteria plans. This dollar limit is indexed for cost-of-living adjustments and may be increased each year.
On Oct. 27, 2020, the IRS released Revenue Procedure 2020-45 (Rev. Proc. 20-45), which announced that the health FSA dollar limit on employee salary reduction contributions will remain at $2,750 for taxable years beginning in 2021. It also includes annual inflation-adjusted numbers for 2021 for a number of other tax provisions.
Employers should ensure that their health FSAs will not allow employees to make pre-tax contributions in excess of $2,750 for the 2021 plan year, and communicate the 2021 limit to their employees as part of the open enrollment process.
Working from home has grown more popular than ever due to the COVID-19 pandemic. Although it can make the workday more flexible and safe, it poses challenges for employees and employers alike. In particular, challenges regarding social well-being and connectivity are among some of the top concerns with working remotely.
Although it’s tough, there are some ways to stay connected while working from home.
The Work Opportunity Tax Credit (WOTC) is a federal tax credit available to employers that hire individuals from certain “targeted groups” that have consistently faced significant barriers to employment.
An employer may claim the WOTC for wages paid to these individuals during their first year of employment, as long as they are hired before Dec. 31, 2020, and work at least 120 hours for the employer during that first year. The credit is calculated as:
25% of the wages paid to an employee who worked between 120 and 400 hours; or
40% for an employee who worked more than 400 hours.
On Oct. 29, 2020, the Departments of Labor (DOL), Health and Human Services (HHS) and the Treasury (Departments) issued a final rule regarding transparency in coverage that imposes new transparency requirements on group health plans and health insurers in the individual and group markets. These provisions only apply to non-grandfathered coverage, including both insured and self-insured group health plan sponsors.
This final rule was issued in response to an executive order issued on June 24, 2019, aimed at improving price and quality transparency in health care.