On October 26, 2020, the Internal Revenue Service (IRS) released Revenue Procedure 2020-45, which maintains the health flexible spending account (FSA) salary reduction contribution limit from 2020, which is $2,750, for plan years beginning in 2021. Thus, for health FSAs with a carryover feature, the maximum carryover amount is $550 (20% of the $2,750 salary reduction limit) for plan years beginning or ending in 2021. The Revenue Procedure also contains the cost-of-living adjustments that apply to dollar limitations in certain sections of the Internal Revenue Code.
Qualified Commuter Parking and Mass Transit Pass Monthly Limit Increase
For 2021, the monthly limits for qualified parking and mass transit are $270 each (which remain the same from 2020).
Adoption Assistance Tax Credit Increase
For 2021, the credit allowed for adoption of a child is $14,440 (up $100 from 2020). The credit begins to phase out for taxpayers with modified adjusted gross income in excess of $216,660 (up $2,140 from 2020) and is completely phased out for taxpayers with modified adjusted gross income of $256,660 or more (up $2,140 from 2020).
Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) Increase
For 2021, reimbursements under a QSEHRA cannot exceed $5,300 (single) / $10,700 (family), an increase of $50 (single) / $100 (family) from 2020.
Reminder: 2021 HSA Contribution Limits and HDHP Deductible and Out-of-Pocket Limits
Earlier this year, the IRS announced the inflation adjusted amounts for HSAs and high deductible health plans (HDHPs).
|
2021 (single/family) |
2020 (single/family) |
Annual HSA Contribution Limit |
$3,600 / $7,200 |
$3,550 / $7,100 |
Minimum Annual HDHP Deductible |
$1,400 / $2,800 |
$1,400 / $2,800 |
Maximum Out-of-Pocket for HDHP |
$7,000 / $14,000 |
$6,900 / $13,800 |
The ACA’s out-of-pocket limits for in-network essential health benefits have also increased for 2021. Note that all non-grandfathered group health plans must contain an embedded individual out-of-pocket limit if the family out-of-pocket limit is above $8,550 (2021 plan years). Exceptions to the ACA’s out-of-pocket limit rule are also available for certain small group plans eligible for transition relief (referred to as “Grandmothered” plans). Unless extended, relief for Grandmothered plans ends December 31, 2021.
|
2021 (single/family) |
2020 (single/family) |
ACA Maximum Out-of-Pocket |
$8,550 / $17,100 |
$8,150 / $16,300 |
ACA Reporting Penalties (Forms 1094-B, 1095-B, 1094-C, 1095-C)
The table below describes late filing penalties for ACA reporting. The 2021 penalty is for returns filed in 2021 for calendar year 2020, and the 2022 penalty is for returns filed in 2022 for calendar year 2021. Note that failure to issue a Form 1095-C when required may result in two penalties, as the IRS and the employee are each entitled to receive a copy.
Penalty Description |
2022 Penalty |
2021 Penalty |
Failure to file an information return or provide a payee statement |
$280 for each return with respect to which a failure occurs |
$280 for each return with respect to which a failure occurs |
Annual penalty limit for non-willful failures |
$3,426,000 |
$3,392,000 |
Lower limit for entities with gross receipts not exceeding $5M |
$1,142,000 |
$1,130,500 |
Failures corrected within 30 days of required filing date |
$50 |
$50 |
Annual penalty limit when corrected within 30 days |
$571,000 |
$565,000 |
Lower limit for entities with gross receipts not exceeding $5M when corrected within 30 days |
$199,500 |
$197,500 |
Failures corrected by August 1 |
$110 |
$110 |
Annual penalty limit when corrected by August 1 |
$1,713,000 |
$1,696,000 |
Lower limit for entities with gross receipts not exceeding $5M when corrected by August 1 |
$571,000 |
$565,000 |
Failure to file an information return or provide a payee statement due to intentional disregard |
$570 for each return with respect to which a failure occurs (no cap) |
$560 for each return with respect to which a failure occurs (no cap) |
————————————————————————————————————————-
About the Authors. This alert was prepared by Marathas Barrow Weatherhead Lent LLP, a national law firm with recognized experts on the Affordable Care Act. Contact Danielle Capilla (danielle.capilla@aleragroup.com) with questions. |
The information provided in this alert is not, is not intended to be, and shall not be construed to be, either the provision of legal advice or an offer to provide legal services, nor does it necessarily reflect the opinions of the agency, our lawyers or our clients. This is not legal advice. No client-lawyer relationship between you and our lawyers is or may be created by your use of this information. Rather, the content is intended as a general overview of the subject matter covered. This agency and Marathas Barrow Weatherhead Lent LLP are not obligated to provide updates on the information presented herein. Those reading this alert are encouraged to seek direct counsel on legal questions. © 2020 Marathas Barrow Weatherhead Lent LLP. All Rights Reserved. |
I hope you all had a wonderful weekend! Below please find this week’s curated list of wellbeing resources. Feel free to share these resources, as appropriate, with your team. Have a safe and healthy week!
Alera Virtual Wellbeing Fair
Career Wellbeing
Social & Family Wellbeing
Financial Wellbeing
Physical Wellbeing
Emotional Wellbeing
Community Wellbeing
Employer Focused Wellbeing
This is the ninth article in our Compliance 101 blog series where we use six questions to break down important compliance topics. Below you will learn more about the Affordable Care Act (ACA) Measurement Methods. Read more below! Download this article.
Definition:
ALE, as defined in section 4980H(c)(2) of the Internal Revenue Code, enacted by the Affordable Care Act (ACA), with respect to a calendar year, is an employer that employed an average of at least 50 full-time or full-time equivalent employees on business days during the preceding calendar year.
Definitions:
What is an hour of service?
Key LBMM Terms:
• In general, the same measurement method (or measurement periods) must be used for the same category of employee. For example, if the look back-back method is used for variable hour employees than all hourly employees must be measured by the look-back method.
Definitions:
NOTE: No guidance has been released that changes any of the ACA “play or pay” requirements for purposes of COVID-19. The general rules as of this blog date (10/15/2020) are still applicable and employers should ensure they are in compliance with the ACA employer mandate to avoid penalties
Disclaimer: This blog was written by Michelle Turner, MBA, CEBS, Compliance Consultant, Alera Group Central Region. This blog post intends to provide general information regarding the status of, and/or potential concerns related to, current employer HR & benefits issues. This blog should not be construed as, nor is it intended to provide, legal advice. The opinions expressed herein are based upon the author’s experience as a Compliance Consultant and may not reflect the opinions of your counsel.
The information contained herein should be understood to be general insurance brokerage information only and does not constitute advice for any particular situation or fact pattern and cannot be relied upon as such. Statements concerning financial, regulatory or legal matters are based on general observations as an insurance broker and may not be relied upon as financial, regulatory or legal advice. This document is owned by Alera Group, Inc., and its contents may not be reproduced, in whole or in part, without the written permission of Alera Group, Inc.
This article was last reviewed and up to date as of 10/15/2020.
4
The Alera Virtual Wellbeing Fair starts today! We hope you and your employees can join us! Each day there are fitness breaks, mindfulness sessions, and a wide variety of Wellbeing breakout sessions. Key sessions and registration links are noted below. I am attaching some communications pieces you can use to let your employees know about the event. If you have any questions, please don’t hesitate to reach out to me.
Have a safe and healthy week!
Career Wellbeing
Social & Family Wellbeing
Financial Wellbeing
Physical Wellbeing
Emotional Wellbeing
Employer Focused Wellbeing
Alera Group, a national employee benefits, property and casualty, retirement services and wealth management firm, announced today that it has acquired Gordon Atlantic Insurance Agency, effective October 1, 2020.
Located in Norwell, Massachusetts, Gordon Atlantic works with clients throughout the Northeast to meet personal and business insurance needs. Motivated by their motto of “Making Insurance Make Sense,” the Gordon Atlantic team has helped clients throughout the region by creating custom insurance programs that provide both clarity and coverage.
“As we continue to grow in the Northeast, we are thrilled to have Gordon Atlantic as an Alera Group company,” said Alan Levitz, CEO of Alera Group. “Their decades of industry expertise will be a valuable addition to our expanding presence in the greater Boston area. We are proud to welcome them to Alera Group.”
“At Gordon Atlantic, we take great pride in providing our clients with the best possible insurance solutions for their needs. As an Alera Group company, we are strategically positioned to continue to grow and meet our clients’ needs with industry-leading resources,” said Geoffrey Gordon, Managing Partner of Gordan Atlantic. “We look forward to the collaborative future ahead as part of Alera Group.”
Gordon Atlantic joins Alera Group through local firm Sylvia Group. The Gordon Atlantic team will continue serving clients in their existing roles. Terms of the transaction were not disclosed.
###
About Alera Group
Based in Deerfield, IL, Alera Group’s over 2,000 employees serve thousands of clients nationally in employee benefits, property and casualty, retirement services and wealth management. Alera Group is the 11th largest privately held firm in the country. For more information, visit www.jmjwebconsulting.com or follow Alera Group on Twitter: @AleraGroupUS.
There is nothing preventing an insurance contract/policy year to be longer than 12 months, it is, however, impermissible under ERISA, ACA and the Internal Revenue Code to have the plan year longer than 12 months. Therefore, when an employer extends their insurance policy (e.g. 13-month rate guarantee) or changes their renewal date (e.g. mid-year carrier change) if they also are considering changing their ERISA plan year to keep it consistent with their policy renewal date, there are compliance issues to consider.
Download our whitepaper to learn more.
If you have any questions, please reach out to your local advisor or email us at info@aleragroup.com.
Disclaimer: This blog was written by Michelle Turner, MBA, CEBS, Compliance Consultant, Alera Group Central Region. This blog post intends to provide general information regarding the status of, and/or potential concerns related to, current employer HR & benefits issues. This blog should not be construed as, nor is it intended to provide, legal advice. The opinions expressed herein are based upon the author’s experience as a Compliance Consultant and may not reflect the opinions of your counsel.
The information contained herein should be understood to be general insurance brokerage information only and does not constitute advice for any particular situation or fact pattern and cannot be relied upon as such. Statements concerning financial, regulatory or legal matters are based on general observations as an insurance broker and may not be relied upon as financial, regulatory or legal advice. This document is owned by Alera Group, Inc., and its contents may not be reproduced, in whole or in part, without the written permission of Alera Group, Inc.
This article was last reviewed and up to date as of 10/13/2020.
Alera Group today announced that John Mollica has been appointed as Vice President, Business Intelligence and Transformation, effective October 12, 2020. Mollica will be responsible for overseeing Alera Group’s data and analytics strategy across the United States.
Mollica is an accomplished executive with over 20 years of experience in Financial Services, most recently serving as Head of Product and General Manager of RiskMatch, Inc., a subsidiary of Vertafore, Inc. He has a unique combination of financial, business intelligence, data analytics and business transformation experience, which he will leverage while supporting the national data and analytics strategy for Alera Group.
“We are incredibly excited to welcome John to the Alera Group team, and the experience he brings in leading the strategic deployment and execution of data and analytical solutions to progressive insurance intermediaries,” said Billy Corrigan, Chief Operating Officer of Alera Group. “John’s combination of leadership skills, InsurTech knowledge and financial acumen will be instrumental in helping Alera Group continue its growth trajectory for the foreseeable future.”
“As Vice President, Business Intelligence and Transformation of Alera Group, I look forward to working closely with the leadership team to strengthen the company’s ability to harness the power of its underlying data sources. Through this, we will provide data-backed insight to our firms that will fuel continued growth and transformation,” said Mollica. “I have had the opportunity to work closely with the Alera Group team over the past three years, and have been hugely impressed with the progress they have made in a short time, and the quality of the brand it has already established. I look forward to working collaboratively with our sales teams, business line Practice Leaders and shared services teams to support our ongoing growth.”
Mollica will be based out of Norwalk, Connecticut. He joins Alera Group as the latest member of an industry-leading team of professionals across the United States. For more information about Alera Group, visit www.jmjwebconsulting.com
###
About Alera Group
With over 80 locations across the country and nearly 2,000 teammates, Alera Group works together to deliver solutions in employee benefits, property and casualty, retirement services and wealth management. Built on a unique model of collaboration, Alera Group is now the 17th largest independent insurance agency in the United States. For more information, visit jmjwebconsulting.com.
Looking to take your virtual open enrollment to the next level? This on-demand webinar will help you create an engaging OE plan, even in the middle of a global pandemic.
Paper shuffling, bewildered looks, and frantic note-taking. It’s another open enrollment season — the annual 30-day period during which workers choose their benefits for the coming year
For calendar-year benefit plans that begin Jan. 1, open enrollment often takes place in November. However, enrollment this year won’t be business as usual. The COVID-19 pandemic and the need for social distancing have made things more complicated.
To add to enrollment challenges, this year more than ever, it’s imperative employers communicate with employees about their choices for benefits. Whether the benefits are health, dental, life insurance or ancillary benefits, employees must understand what benefits are available so they can best take advantage of them. They also need to know which benefits are fully paid for by the employer, which ones are employee-paid through salary deferral, and which ones are shared costs.
There is no requirement that open enrollment be held for a certain length of time, although most employers have an open enrollment period of at least two to four weeks. To determine the timeline that works best for you, work backwards from the date that the information must be completed for the carriers and then work forward to deliver the communications program. Remember to send reminders to employees about the deadline for making their selections.
Before you start your open enrollment, give serious thought to how you will conduct open enrollment, taking into account social distancing. Typically, employers and carrier representatives hold enrollment meetings to discuss changes and options. If you decide you cannot safely hold a group meeting — either all at once or in stages — consider hosting a virtual enrollment meeting via a group video call.
Many small businesses still enroll employees through the traditional paper process. If that is your situation, talk to your broker and insurance carrier about going digital this year. If your carrier doesn’t have a system in place, it may be too late to implement a digital system this year, but you can start planning ahead now.
Best Practices
As always, there are procedures you can put in place to ensure that you have a successful enrollment period. Here are a few ideas recommended by benefit experts:
If you have any questions, reach out to your Alera Group advisor or email us at info@aleragroup.com to learn more about how we can help you create an engaging open enrollment communication strategy.
The Internal Revenue Service (IRS) has released Notice 2020-76, which extends the deadline for furnishing 2020 Forms 1095-B and 1095-C to individuals from January 31, 2021 to March 2, 2021. The Notice also provides penalty relief for good-faith reporting errors and suspends the requirement to issue Form 1095-B to individuals, under certain conditions.
The due date for filing the forms with the IRS was not extended and remains March 1, 2021 (March 31, 2021 if filed electronically).
The regulations allow employers to request a 30-day extension to furnish statements to individuals by sending a letter to the IRS with certain information, including the reason for delay; however, because the Notice’s extension of time to furnish the forms is as generous as the 30-day extension contained in the instructions, the IRS will not formally respond to requests for an extension of time to furnish 2020 forms to individuals. Employers may obtain an automatic 30-day extension for filing with the IRS by filing Form 8809 on or before the due date. An additional 30-day extension is available under certain hardship conditions. The Notice encourages employers who cannot meet the extended due dates to furnish and file as soon as possible and advises that the IRS will take such furnishing and filing into consideration when considering whether to abate penalties for reasonable cause.
Relief from Furnishing Form 1095-B to Individuals
Due to the individual mandate penalty being reduced to zero starting in 2019, an individual does not need the information on Form 1095-B in order to complete his or her federal tax return. Therefore, the IRS is granting penalty relief for employers who fail to furnish a Form 1095-B to individuals, provided that the reporting entity:
Note that Applicable Large Employers (ALEs) are still required to furnish Form 1095-C to their full-time employees. They must also complete Part III if the employee is enrolled in self-insured coverage. The relief from furnishing Form 1095-B does not extend to IRS reporting. Forms 1095-B must still be submitted to the IRS, as applicable.
In general, this relief from furnishing Form 1095-B applies to insurers, and non-ALEs that sponsor self-insured plans, as they complete Form 1095-B for covered participants.
Extension of Good-Faith Relief (Final Year)
As with calendar year 2015 – 2019 reporting, the IRS will not impose penalties on employers that can show that they made good-faith efforts to comply with the requirements for calendar year 2020. In determining good faith, the IRS will consider whether employers have made reasonable attempts to comply with the requirements (e.g., gathering and transmitting the necessary data to an agent or testing its ability to transmit information) and the steps that have been taken to prepare for next year’s reporting. The Notice indicates that the good-faith relief was intended to be transitional relief, and therefore 2020 is the last year the IRS intends to provide this relief.
Note that the good-faith relief applies only to furnishing and filing incorrect or incomplete information, and not to a failure to timely furnish or file. However, if an employer is late filing a return, it may be possible to get penalty abatement for failures that are due to reasonable cause and not willful neglect. In general, to establish reasonable cause the employer must demonstrate that it acted in a responsible manner and that the failure was due to significant mitigating factors or events beyond its control. The IRS has been enforcing late filing penalties via Letter 972CG, which may include penalties based on failed to file electronically (when required), or failure to file with correct TIN information.
As in past years, individuals can file their personal income tax return without having to attach the relevant Form 1095. Taxpayers should keep these forms in their personal records, even though the federal individual mandate penalty is not applicable for the 2020 filing year.
About the Authors. This alert was prepared by Marathas Barrow Weatherhead Lent LLP, a national law firm with recognized experts on the Affordable Care Act. Contact Danielle Capilla at danielle.capilla@aleragroup.com with questions.
The information provided in this alert is not, is not intended to be, and shall not be construed to be, either the provision of legal advice or an offer to provide legal services, nor does it necessarily reflect the opinions of the agency, our lawyers or our clients. This is not legal advice. No client-lawyer relationship between you and our lawyers is or may be created by your use of this information. Rather, the content is intended as a general overview of the subject matter covered. This agency and Marathas Barrow Weatherhead Lent LLP are not obligated to provide updates on the information presented herein. Those reading this alert are encouraged to seek direct counsel on legal questions.
© 2020 Marathas Barrow Weatherhead Lent LLP. All Rights Reserved.
October 10th is World Mental Health Day so the Employer Resources section is chock full of webinars and resources that are available to you this week to dive deeper into supporting the Emotional Wellbeing of your teams.
On a lighter note, if you had to cancel your Wellness Fair this year, Alera has created a Virtual Wellbeing Fair that is ready for you and your employees to enjoy! During the week of October 19-23, your employees can participate in fitness breaks, mindfulness sessions, and a wide variety of Wellbeing breakout sessions. Breakout sessions should be finalized tomorrow. We are excited to have a 2-time Olympic Medalist as part of the line-up, as well as an array of national vendors speaking on a range of topics from mental health and support, how to communicate better in the workplace, and taking care of your personal and physical health.
Have a safe and healthy week!
Career Wellbeing
Social & Family Wellbeing
Financial Wellbeing
Physical Wellbeing
Emotional Wellbeing
Community Wellbeing
Employer Focused Wellbeing
About the Author
Andrea Davis, Director of Wellbeing
Andrea joined Alera Group Northeast (formerly CBP) in July 2013, bringing over 15 years of experience in management consulting and strategic solutions. As the Director of Wellbeing, she is responsible for assisting with the development, implementation and evaluation of comprehensive wellness strategies for existing and prospective Alera Group clients. She provides assistance and support to Alera Group clients by developing personalized programs that fit clients’ unique health management needs, wellness program implementation, committee development, promotion and marketing of their programs to encourage participation. In addition, Andrea conducts program analysis and generates reports related to program participation, health assessment and client utilization.