21 Jul The ClearPath Advisor – July 2020
The ClearPath Advisor – July 2020
Compliance Check
what you need to know
May was a busy month in the employee benefits world.
The Internal Revenue Service (IRS) issued IRS Notice 2020-29 that provides increased flexibility for making mid-year elections or changes under a Section 125 cafeteria plan during calendar year 2020 and provides increased flexibility to apply unused amounts in health flexible spending accounts (FSAs) to medical care expenses. The IRS also issued IRS Notice 2020-33 that increases the limit for unused health FSA carryover amounts and clarifies the ability of a health plan to reimburse individual insurance policy premium expenses incurred prior to the beginning of the plan year for coverage provided during the plan year.
The Department of Labor (DOL) released updated Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) model notices and frequently asked questions (FAQs) providing general information on the updated model notices. The Centers for Medicare and Medicaid Services (CMS) issued a bulletin noting it will adopt a temporary policy of relaxed enforcement to extend timeframes otherwise applicable to non-federal governmental group health plans and health insurance issuers offering group health plans, and their participants and beneficiaries.
DOL Releases Updated COBRA Model Notices and FAQs. The Department of Labor (DOL) released updated Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) model notices and frequently asked questions (FAQs) providing general information on the updated model notices. The FAQs note that the DOL provides a model general COBRA notice and model COBRA election notice that plans may use to satisfy the requirements to timely provide both of these notices to qualified beneficiaries. The DOL has updated these model notices to ensure that qualified beneficiaries have a better understanding of the interactions between Medicare and COBRA.
Recalibrating Your Work-Life Balance. One of most indicative signs of a healthy lifestyle is a measured work-life balance. In fact, many candidates cite work-life balance as a deciding factor when looking for jobs. But since the onset of self-quarantine and stay-at-home orders, the physical distinction between work and home has been all but erased—and as a result, many of our work-life balances have suffered.
IRS Notices
IRS Issues Notice 2020-29. The IRS issued IRS Notice 2020-29 (Notice) that provides increased flexibility for making mid-year elections or changes under a Section 125 cafeteria plan during calendar year 2020 related to employer-sponsored health coverage, health flexible spending arrangements (health FSAs), and dependent care assistance programs (DCAPs). This notice also provides increased flexibility to apply unused amounts in health FSAs to medical care expenses incurred through December 31, 2020, and unused amounts in dependent care assistance programs to dependent care expenses incurred through December 31, 2020.
IRS Issues Notice 2020-33. The IRS issued IRS Notice 2020-33 (Notice) that increases the limit for unused health FSA carryover amounts from $500 to a maximum of $550 (carried over from a 2020 plan year to a 2021 plan year), as adjusted annually for inflation. Notice 2020-33 also clarifies the ability of a health plan to reimburse individual insurance policy premium expenses incurred prior to the beginning of the plan year for coverage provided during the plan year. According to Notice 2020-33, the Department of the Treasury (Treasury) and the IRS intend to revise the proposed cafeteria plan regulations to reflect the guidance in this notice, but taxpayers may rely upon Notice 2020-33 in the meantime.
IRS Issues Notice 2020-35. On March 13, 2020, the President of the United States issued an emergency declaration under the Robert T. Stafford Disaster Relief and Emergency Assistance Act in response to the ongoing Coronavirus Disease 2019 (COVID-19) pandemic (Emergency Declaration). The Emergency Declaration instructed the Secretary of the Treasury “to provide relief from tax deadlines to Americans who have been adversely affected by the COVID-19 emergency, as appropriate, pursuant to 26 U.S.C. 7508A(a).”
The IRS has issued relief in Notice 2020-35 (Notice). Much of the relief does not affect employer sponsored group health plans. However, the Notice extends the deadline for providing HSA contribution information to the account beneficiary and filing Form 5498-SA with the IRS to August 31, 2020, following the calendar year to which the information relates (the deadline had previously been extended to July 15, 2020). This deadline extension also applies to Archer MSAs and Medicare Advantage MSAs.
Choosing the Best HR Expert for Your Business
Featuring Denise Kestner, Chief Talent Officer and HR Practice Leader
Most certainly, the first common challenge among all employers is keeping up with the changes to legal compliance issues. For Denise, there have been a variety of compliance issues that have been constantly brought to her attention in the last five months, all of which employers should be keeping up-to-date with:
- ACA and Benefit Compliance
- Tracking & Measuring
- Client Communication regarding Exempt versus Non-exempt Employees
- Intermittent Versus Continuous FMLA Utilization
- Discriminatory and Harassment Issues
“At ClearPath, we ensure – based on size and industry – that we are engaging and notifying employers in best practices when there is a compliance update. We watch their growth too, to [help] keep them compliant. They rely on ClearPath HR advisors to keep their company on track with the latest [and greatest],” Denise said. “Our goal is to always lift the burden from the employers’ shoulders, so they can focus primarily on the management of their organization. We try to find their pain point and help lessen the stress of it.” – Denise Kestner
Summer Favorites with ClearPath Benefits
In honor of Independence Day, this month’s Dish features some of ClearPath’s favorite summer recipes!