Resecō Inform

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).

Legal Update HeaderThe 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.

What Is Social Well-being?

HR Compliance Bulletin header imageThe 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.

Legal Update HeaderOn 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.

The Affordable Care Act (ACA) has made a number of significant changes to group health plans since the law was enacted in 2010. Since that time, a number of changes have been made to various ACA requirements that employers and plan sponsors should be aware of. It is important for employers to periodically review their benefit plans in order to maintain compliance with these various requirements.

Changes to some ACA requirements take effect in 2021 for employers sponsoring group health plans, such as increased dollar limits. To prepare for 2021, employers should review these upcoming requirements and develop a compliance strategy. This ACA Overview provides an ACA compliance checklist for 2021. Please contact Reseco Group for assistance or if you have questions about changes that were required in previous years.

Legal Update HeaderThe Internal Revenue Service (IRS) has released Notice 2020-79, containing cost-of-living adjustments for 2021 that affect amounts employees can contribute to 401(k) plans and IRAs, most of which remain unchanged.

Key limits that remain unchanged include the following:
  • The employee contribution limit for 401(k) plans will remain $19,500. The catch-up contribution limit for employees aged 50 and over also remains unchanged at $6,500.
  • The employee contribution limit for IRAs will remain $6,000. The catch-up contribution limit for employees aged 50 and over also remains unchanged, at $1,000.
  • The employee contribution limit for SIMPLE IRAs and SIMPLE 401(k) plans will remain $13,500.
  • The limits used to define a “highly compensated employee” and a “key employee” will remain $130,000 and $185,000, respectively.

Trends at a glance header

One In 10 People In The United States Will Get The Flu In A Given Season, According To Estimates From The Centers For Disease Control And Prevention (CDC).

And while viruses can live year-round, flu activity tends to rise in October and then peak between December and February. With COVID-19 a factor this year, it’s even more important to take precautions to prevent the flu from spreading.