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New in ’22 for 401(K) Plans – Lifetime Income Disclosures

The SECURE Act added a new disclosure requirement for sponsors of defined contribution plans that becomes effective this year.   Plan sponsors of ERISA-covered defined contribution plans must provide participants with a lifetime income disclosure (at least annually) which estimates the monthly income that a participant’s account balance could produce if paid in the form of a qualified joint and survivor annuity or single life annuity stream of payments, rather than a lump-sum.

For participant-directed plans, the initial lifetime income disclosures must be incorporated into benefit statements no later than June 30, 2022.  For plans under which participants do not direct the investment of their account, the disclosures must be on the statement for the first plan year ending on or after September 19, 2021.  For most plans, this will be October 15, 2022.

Group Health Plans Must Cover OTC COVID-19 Test Kits

Yesterday, the Biden Administration announced that effective January 15, 2022, insurance companies and group health plans will be required to provide expanded coverage of at-home/over-the-counter (OTC) COVID-19 tests.  The announcement is designed to increase access to free testing.

COVID-Related Benefit Mandates: What is Still Required and What is Optional?

As group health plan sponsors head into 2022 and contemplate a third year of COVID-19 related medical claims, many are confused about what COVID-19 related expenses are required to be covered at 100% cost-sharing and for how long.

Reminder for Employers: Home COVID-19 Tests and FSAs, HSAs, and HRAs

Employers should work with their cafeteria plan or other third-party administrators to ensure that their health FSAs, HSAs, and/or HRAs permit employees to be reimbursed for the costs of home COVID-19 tests.

Enforcement of Investment Advice Exemption – On The Horizon

Investment consultants and other service providers who advise plan participants and fiduciaries about rollovers and investment choices received another reprieve from new rules governing that advice.  But the reprieve is only temporary; those consultants and advisors must be prepared to comply by February 1, 2022.

2022 Inflation Adjustments

Following announcements by both the IRS and the Social Security Administration, we now know most of the dollar amounts that employers will need in order to administer their benefit plans for 2022.  The key dollar amounts for retirement plans and individual retirement accounts (“IRAs”) are shown on the front side of our 2022 limits card.

The reverse side of the card shows a number of dollar amounts that employers will need to know in order to administer health flexible spending accounts (“FSAs”), health savings accounts (“HSAs”), and high-deductible health plans (“HDHPs”), as well as health plans that are not grandfathered under the Affordable Care Act.

A laminated version of the 2022 limits card is available upon request.  To obtain one or more copies, please contact any member of our Employee Benefits Group.  You also can contact the Spencer Fane Marketing Department at 816-474-8100 or marketing@spencerfane.com.

Agencies Clarify Implementation Dates for Group Health Plan Transparency Rules

Regulations recently promulgated under the Affordable Care Act (“ACA”) and statutory requirements enacted under the Consolidated Appropriations Act, 2021 (“CAA”) both include new transparency requirements applicable to group health plans. Unfortunately, however, there is substantial overlap and inconsistency among those twin transparency rules, creating confusion among plan sponsors and health care providers.  Guidance issued in August by the Departments of Labor, Treasury, and Health and Human Services attempts to resolve that confusion.

Important Reminder – Special COBRA Notice Deadline is Approaching Fast

The deadline to send a new COBRA notice required under the American Rescue Plan Act of 2021 (“ARPA”) is approaching quickly.  Employers and COBRA administrators will need to send those notices no later than September 15, 2021, to satisfy that obligation.

DOL Issues Cybersecurity Guidance

On April 14, 2021, the Department of Labor’s Employee Benefits Security Administration (“EBSA”) issued cybersecurity guidance for retirement plan fiduciaries and service providers, as well as plan participants.  In the guidance, the EBSA states that ERISA fiduciaries are required to take appropriate steps to mitigate internal and external cybersecurity threats to plan participants and retirement plan assets.   To assist fiduciaries  and service providers in fulfilling this obligation, the EBSA issued two documents that describe cybersecurity best practices – Cybersecurity Program Best Practices and Tips for Hiring a Service Provider.  The EBSA also issued some basic rules – Online Security Tips – to help participants reduce the risk of fraud and loss to their retirement accounts.

COBRA Changes Under the American Rescue Plan Act of 2021

On March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 (“ARPA” or “the Act”) into law.  Among the Act’s many provisions is a temporary subsidy for COBRA coverage that will undoubtedly be a significant benefit for individuals who lost health coverage during the pandemic, but which is just as certain to be a tremendous administrative burden for employers and group health plans.

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