Category: News

The Department of Labor published the annual adjustments for 2022 that increase certain penalties applicable to employee benefit plans.

The Department of Labor (DOL) published the annual adjustments for 2022 that increase certain penalties applicable to employee benefit plans.

Annual Penalty Adjustments for 2022

The following updated penalties are applicable to health and welfare plans subject to ERISA.

Description	2022 Penalty (New)	2021 Penalty (Old)
Failure to file Form 5500	Up to $2,400 per day	Up to $2,259 per day
Failure of a MEWA to file reports (i.e., M-1)	Up to $1,746 per day	Up to $1,644 per day
Failure to provide CHIP Notice	Up to $127 per day per employee	Up to $120 per day per employee
Failure to disclose CHIP/Medicare coordination to the State	$127 per day per violation (per participant/beneficiary)	$120 per day per violation (per participant/beneficiary)
Failure to provide SBCs	Up to $1,264 per failure	Up to $1,190 per failure
Failure to furnish plan documents (including SPDs/SMMs) to DOL on request	$171 per day $1,713 cap per request	$161 per day $1,613 cap per request
Genetic information failures	$127 per day (per participant/beneficiary)	$120 per day (per participant/beneficiary)
De minimis failures to meet genetic information requirements	$3,192 minimum	$3,005 minimum
Failure to meet genetic information requirements – not de minimis failures	$19,157 minimum	$18,035 minimum
Cap on unintentional failures to meet genetic information requirements	$638,152 maximum	$601,152 maximum

Employer Action

Private employers, including non-profits, should ensure employees receive required notices timely (SBC, CHIP, SPD, etc.) to prevent civil penalty assessments. In addition, employers should ensure Form 5500s are properly and timely filed, if applicable. Finally, employers facing document requests from EBSA should ensure documents are provided timely, as requested.

This document is designed to highlight various employee benefit matters of general interest to our readers. It is not intended to interpret laws or regulations, or to address specific client situations. You should not act or rely on any information contained herein without seeking the advice of an attorney or tax professional.

Determine which federal posters are required for your company in order to stay compliant with the Department of Labor (DOL).

elaws – FirstStep Poster Advisor (dol.gov)

FMLA Advisor

Understand your company’s rights and responsibilities under the federal Family and Medical Leave Act (FMLA).

elaws – Family and Medical Leave Act Advisor (dol.gov)

2022 ACA Maximum Out-of-Pocket Expenses (non-grandfathered plans)

Applicable to plan years beginning on or after 1/1/2022:
• $8,700 for self-only coverage (increase from $8,550 in 2021)

• $17,400 for family coverage (increase from $17,100 in 2021)

2022 HSA & HDHP Design Maximums

• Catch-up contribution (Age 55 and older by the end of the tax year): $1,000
• Note: DOL, HHS, and IRS guidance requires group health plans to embed an individual out-of-pocket maximum in the plan’s family coverage when the family out-of-pocket maximum exceeds the ACA’s out-of- pocket maximum for self-only coverage

Health FSA Limits

• The annual limit on employee salary reduction contributions for plan years beginning in 2021 is $2,750. The limit for plan years beginning in 2022 is $2,850.
• The limit on the amount that may be carried over from the plan year beginning in 2021 to the plan year beginning in 2022 is $550. The limit on the amount that may be carried over from the plan year beginning in 2022 to the plan year beginning in 2023 is $570.
• Relief allowing pre-tax election changes for group health care plan coverage, health FSA elections, and dependent care FSA elections for plan years ending in 2021 ends.
• Health FSA spend-down provision for plan years ending in 2021 (part of COVID-19 relief)

Dependent Care FSA limits

• Dependent Care FSA annual (calendar year) limit on the amount of benefits excluded from income will revert to $5,000 ($2,500 for married filing separately).
• Relief allowing pre-tax election changes for group health care plan coverage, health FSA elections, and dependent care FSA elections for plan years ending in 2021 ends.

Transportation Limits

The 2021 monthly limitation for the qualified transportation fringe benefit is $270, as is the 2021 monthly limitation for qualified parking. The limits for 2022 are $280.

Affordability Safe Harbors

The safe harbor percentage for 2022 is 9.61%, down from the 2021 level of 9.83%.

Employer Shared Responsibility Tax (employer mandate) for the 2022 Plan Year

• 4980H(a) Tax for not offering minimum essential coverage to at least 95% of full-time eligible employees: For 2022, the ESRP is projected to be $2,750 (annually) per all full-time eligible employees (less 30 full-time eligible employees).
• 4980H(b) Tax for offering coverage that is not minimum value or not affordable to an eligible full-time employee or failing to offer coverage to a full-time employee when coverage is offered to at least 95% of full-time employees: For 2022, the Employer Shared Responsibility Provisions (ESRP) is projected to be $4,120 (annually) for each eligible employee not offered such coverage that receives an exchange subsidy.

PCORI Fee

Selecting a Benchmark Plan

• The final Market reform rules require self-insured and large insured plans to select one of the three Federal Employees Health Benefit Program (FEHBP) options or a state benchmark plan to define essential health benefits (EHB) for purposes of ensuring the plan imposes no annual or lifetime dollar limits on EHBs.
• This requirement applies to benefits provided in- or out-of-network.

Wellness Incentive and Reward Limits

HIPAA
• Participation-only programs (e.g., fitness club discounts): unlimited.
• Outcomes-based: Tobacco cessation 50% of employer + employee premium contribution. All other programs (e.g., biometrics) 30% of employer + employee premium contribution. Note: If combined, the total can be no more than 50% of employer + employee premium contribution, with any percentage over 30% being attributable to tobacco cessation.
ADA – NOTE
• New EEOC rules withdrawn per President Biden’s regulatory freeze order (January 2021).
• Employers should be careful about structuring incentives for wellness programs that ask for health information or involve medical exams.
• It is possible the EEOC will issue new wellness rules prior to the end of calendar year 2021.

GINA
Applies to incentives linked to the spouse or children of an employee participating in a medical exam or providing information regarding current or past health status: the maximum inducement to the employee was 30% of the employee only rate and if the spouse can participate, an additional 30% of the employee only rate. However, these rules have also been withdrawn.

Transparency
Plans and issuers must make available or disclose certain cost-sharing and pricing information to participants, the public, and the federal government, including making cost-sharing information available through a self-service tool available on an internet website (e.g., the insurance issuer’s, TPA’s, or plan sponsor’s website). Some rules are applicable starting with the first plan year beginning on or after January 1, 2022, while others are applicable July 1, 2022, or as of the first plan year beginning in 2023. Some rules have been delayed indefinitely. Note: The first report on prescription drug prices, which originally was due December 27, 2021, has been delayed until December 27, 2022, but must include information for 2020 and 2021.

No Surprises Act

• Prohibits surprise billing for emergency services. • Prohibits high out-of-network cost-sharing for emergency and non-emergency services.
• Prohibits out-of-network charges for ancillary care (like an anesthesiologist or assistant surgeon) at an in-network facility in all circumstances.
• Prohibits other out-of-network charges without advance notice.
• Applicable to plan years beginning on or after January 1, 2022.

Outbreak Period

• Extensions for certain deadlines under COBRA, HIPAA, and claims filing timeframes are disregarded
until the earlier of
a. 1 year from the date they were first eligible for
relief, or
b. 60 days after the announced end of the National
Emergency (the end of the Outbreak Period).
• On the applicable date, the timeframes for individuals and plans with periods that were
previously disregarded under the Notices will resume. In no case will a disregarded period
exceed 1 year.
• The Outbreak Period has not ended as of December 2021.

This document is designed to highlight various employee benefit matters of general interest to our readers. It is not intended to interpret laws or regulations, or to address specific client situations. You should not act or rely on any information contained herein without seeking the advice of an attorney or tax professional.

Voluntary benefits provide a solution for employers to offer a complete benefits package to employees. Employers are able to provide benefits that employees want, while employees will have a variety of insurance options available in one convenient place. 

What Are Voluntary Benefits?

Voluntary benefits are coverages and products made available to employees for purchase. They generally allow employees to enroll in the benefits most important to them, are cost-efficient and portable, and contribute to an employee’s work-life balance. Because of this, voluntary benefits have become a core component of many companies’ benefits strategies. There are four key characteristics to these offerings:

• Employee-paid
• Offered through an employer
• Solicited and enrolled through a carrier or enrollment firm
• Paid via automatic payroll deductions

Some common voluntary benefits include:

• Disability income insurance
• Accidental death and dismemberment insurance
• Dental insurance
• Vision insurance
• Pet health insurance
• Supplemental health insurance
• Identity theft insurance

Advantages of Offering Voluntary Benefits

Employers should consider expanding their benefit offerings to include voluntary benefits because they are not only cost-efficient but also easy to implement, and employees are looking for them. Voluntary benefits appeal to both employee and employer needs.

Employer advantages include:

• A cost-efficient way to supplement health care benefits
• Increased expense control in the face of rising benefits costs
• Improved employee morale 

Employee advantages include:

• Affordable premiums
• Easy enrollment process
• Freedom to choose benefits that suit their needs

Voluntary benefits may not be the right solution for all employers and employees. Employers should examine their current benefits package to determine which benefits are popular. In addition, talking to employees can help determine which voluntary benefits they would prefer. This section will provide you with a breakdown of specific voluntary benefits, like vision or dental insurance. Employers looking to learn more about different voluntary benefits can select that benefit.