Compliance – ACA & Other

FICA
Social Security Tax is 6.2% on income up to $168,600
Medicare Tax unlimited 1.45% to Unlimited

ACA Affordability — The ACA benchmark for determining the affordability of employer-sponsored health coverage will drop significantly to 8.39% of an employee’s household income for the 2024 plan year.

High Deductible Health Plans
Minimum Annual Deductible (Individual/Family) $1,600 / $3,200
Maximum Out-of-Pocket Limit (Individual/Family) $8,050 / $16,100

Health Savings Accounts
Individual / Family $4,150 / $8,300
Catch-up Contribution $1,000

Excepted Benefit HRA $2,100

Excepted-benefits health plans are non-traditional, fully insured and tax-advantaged health plans that are exempt from Affordable Care Act (ACA) requirements, which means they can be offered to select (versus all) employees at the employer’s discretion, including practice owners/partners.

ACA Plan Limits
Out-of-Pocket Limits Individual / Family $9,450 / $18,900

Flexible Spending Accounts
Health Care Flexible Spending Account Maximums $3,200 Maximum carryover $640
Dependent Care Spending Account Maximum $5,000

Dependent Care Spending Account Maximum for highly compensated ($150,000 in 2023) employees $3,000
The dependent care FSA maximum is set by statute and is not subject to inflation-related adjustments.

Standard Mileage Rates
65.5 cents per mile for business miles driven
22 cents per mile for medical or moving purposes
14 cents per mile driven in service of charitable organizations

Parking (monthly) $315
Mass Transit Passes (monthly) $315

Compensation
Compensation Limit $345,000
Highly Compensated Employee Salary Amount $155,000
Annual Compensation for Key Employee $220,000
Defined Benefit Plan Limit $275,000
Defined Contribution Plan Limit $69,000

Retirement Plans
401(k) $23,000
401(k) Catch-up $7,500

IRA Limit $7,000/$8,000 for age 50+
Simple IRA Limit $16,000/$3,500 Catch-Up

Employee Benefit Advisors provides employee benefits, tax-advantaged healthcare, compliance guidance for ACA and Health & Welfare DOL Audits, and PEO Advisory & Consulting Services.

The Consolidated Appropriations Act, 2023 (CAA23) was signed into law on December 23, 2022. One of the health provisions contained in the law was the relief on telehealth coverage offered through HSA Qualified High Deductible Health Plans (HDHPs).

Typically, HSA-qualified HDHPs cannot pay for covered services, except for specified preventive care, until the individual satisfies the plan’s deductible. The CARES Act that passed into law in 2020 permitted people who have coverage through a HDHP to receive telehealth care at no cost, regardless of the plan’s annual deductible, without impacting their eligibility to contribute to an HSA. This provision was set to expire on December 31, 2022. Now, the CAA23 creates a safe harbor for first-dollar telehealth coverage offered through an HDHP for plan years beginning after December 31, 2022 through December 31, 2024.

Plan sponsors can only begin taking advantage of this new relief once their plan renews after December 31, 2022. This means that groups with plans renewing on January 1, 2023, can offer the relief immediately, whereas groups with plans that renew in a different month of the year will need to wait until the start of their 2023 plan year to begin offering it.

The way the legislation is written, there is a small gap for non-calendar year plans. The new extension applies for plan years beginning after December 31, 2022. For example, an HDHP with a plan year beginning June 1 could not offer telehealth before the deductible for the period from January 1, 2023 through the end of May 2023. Any HDHP that does not have a calendar plan year would have a similar gap between January 1, 2023 and its plan year start.

The telehealth relief is optional for plan sponsors. Group plan sponsors are not required to offer their participants access to telehealth coverage at all, nor do they have to offer it on a first-dollar basis for any type of plan offering, including HDHPs. If a group decides to adopt this relief, they also need to make sure their plan documents are amended accordingly.

Employee Benefit Advisors provides employee benefits, tax-advantaged healthcare, compliance guidance for ACA and Health & Welfare DOL Audits, and PEO Advisory & Consulting Services.

FICA
Social Security Tax is 6.2% on income up to $160,200
Medicare Tax unlimited 1.45% to Unlimited

Individual Mandate’s Affordability Exemption — required contribution percentage is 8.17%.

High Deductible Health Plans
Minimum Annual Deductible (Individual/Family) $1,500 / $3,000
Maximum Out-of-Pocket Limit (Individual/Family) $7,500 / $15,000

Health Savings Accounts
Individual / Family $3,850 / $7,750
Catch-up Contribution $1,000

ACA Plan Limits
Out-of-Pocket Limits Individual / Family $9,100 / $18,200

Flexible Spending Accounts
Health Care Flexible Spending Account Maximums $3,050 Maximum carryover $610
Dependent Care Spending Account Maximum $5,000
The dependent care FSA maximum is set by statute and is not subject to inflation-related adjustments.

Mileage & Transportation

The IRS has not announced the official 2023 mileage rates. Considering that fuel prices are not at a peak high anymore as back in June and July of 2022, there is a chance the IRS mileage rate 2023 remains at the same levels, currently being:

Standard Mileage Rates
62.5 cents per mile for business miles driven
22 cents per mile for medical or moving purposes
14 cents per mile driven in service of charitable organizations

Parking (monthly) $300
Mass Transit Passes (monthly) $300

Compensation
Compensation Limit $330,000
Highly Compensated Employee Salary Amount $150,000
Annual Compensation for Key Employee $215,000
Defined Benefit Plan Limit $265,000
Defined Contribution Plan Limit $66,000

Retirement Plans
401(k) $22,500
401(k) Catch-up $7,500

IRA Limit $6,500/$7,500 for age 50+
Simple IRA Limit $15,500/$3,500 Catch-Up

Employee Benefit Advisors provides employee benefits, tax-advantaged healthcare, compliance guidance for ACA and Health & Welfare DOL Audits, and PEO Advisory & Consulting Services.

The Affordable Care Act (ACA) benchmark for determining the affordability of employer-sponsored health coverage will significantly decrease to 9.12% of an employee’s household income for the 2023 plan year. This is a significant decrease from the 2022 level of 9.61%. This affordability percentage affects an individual’s eligibility for federally subsidized coverage from a marketplace exchange. It also can potentially affect the employer’s liability for shared-responsibility assessments.

Employee Benefit Advisors provides, employee benefits, Healthcare Consumption Audits, tax-advantaged healthcare, compliance guidance for ACA and Health & Welfare DOL Audits, and PEO Advisory & Consulting Services. We can customize a wellness plan for your budget and culture.

The U.S. Department of Health and Human Services (HHS) has increased the following penalty affecting group health plans:

Medicare Secondary Payer (MSP): Violating the prohibition of offering Medicare beneficiaries financial or other benefits as incentives not to enroll in or to terminate enrollment in a group health plan that would otherwise be primary to Medicare will now trigger penalties of up to $9,753.

Employee Benefit Advisors provides, employee benefits, Healthcare Consumption Audits, tax-advantaged healthcare, compliance guidance for ACA and Health & Welfare DOL Audits, and PEO Advisory & Consulting Services. We can customize a wellness plan for your budget and culture.

Employers are considering vaccine incentives and potential penalties for workers who remain unvaccinated against COVID-19. Before adding a premium surcharge, employers will want to consider how they may impact the affordability of an employer’s health plans. While there is an exception for tobacco, there’s nothing currently in the ACA rules that similarly applies to a surcharge or penalty for non-COVID-19 vaccinated employees.

• Under current ACA guidelines, a premium surcharge for choosing to be unvaccinated against COVID-19 could be added to the cost of your company’s lowest-cost health plan.

• If the cost including the surcharge renders the plan as unaffordable, and the employee goes to the exchange and receives a premium tax credit, the employer may be subject to Penalty B. That’s $4,060 penalty per year for each full-time employees who did not have an offer of affordable coverage and also received a premium tax credit.

Credit Kyle Scott is assistant vice president of compliance at Health e(fx), an Equifax company. She earned her Juris Doctor, Cum Laude, from Hamline University School of Law and her BA in Psychology from Purdue University.

Employee Benefit Advisors provides, employee benefits, Healthcare Consumption Audits, tax-advantaged healthcare, compliance guidance for ACA and Health & Welfare DOL Audits, and PEO Advisory & Consulting Services. We can customize a wellness plan for your budget and culture.

The American Rescue Plan Act of 2021 (“ARPA”) includes major changes to COBRA administration in 2021.

The Act creates an opportunity for free COBRA coverage during a six-month period from April through September 2021 for employees (and their family members) who experience a loss of group health coverage due to involuntary termination or reduced hours of employment.

The following will begin effective on 4/1/2021. – Employee Benefit Advisors would like to thank Diversified Administration in Hollywood Florida for providing the outline of the ARPA.

100% subsidies for COBRA Qualified Beneficiaries where the qualifying event was an involuntary termination of employment or reduction in hours, beginning 4/1/2021 (if signed this month) through September 2021 (6 months)
• The 100% subsidy is based on a COBRA premium that includes the 2% administrative fee that health plans are permitted to charge for COBRA. The assistance eligible individual does not pay the COBRA premium, but rather the premium initially is “advanced” by the employer, plan, or insurer and then reimbursed by the government through a refundable tax credit (against Medicare hospital insurance (HI) taxes).
• The subsidy will begin for coverage periods beginning on April 1, 2021 and ending on September 30, 2021. The subsidy would end sooner if the qualified beneficiary’s maximum COBRA coverage period ends or if the individual is eligible for another group health plan or Medicare.

Anyone in the COBRA-Election-Window, extending all the way back to last March (3/1/2020), or anyone who terminated COBRA early will have a special enrollment period for 60 days from the date that they receive a new required COBRA notice to make a new election for COBRA. Their COBRA will begin 4/1 and will be free for up to 6 months
• The COBRA Participant can have a GAP in coverage from their event date through 4/1 (This is entirely new to COBRA)
• If someone’s 18 months of COBRA expires before September, they do not get extra time on COBRA, their COBRA expiration date(s) are not extended in any way.

Anyone on COBRA, in the Election-Window or terminated COBRA early who is still within their COBRA Maximum Coverage Period (usually 18 months) can change plans (to a lower plan) 4/1/2021 in the special enrollment window.
• This is Optional and an employer can choose whether or not to offer this option to COBRA Qualified Beneficiaries.

Employers will have to review and audit all terminated employees back to March 1 of last year and determine if any former employees’ terminations were voluntary or involuntary.
• We have this reporting ability already, so some employers are already sending this info. However, many employers use the generic “Termination of Employment” option, all those will need to be reviewed by HR
• If your company uses file feeds, those must be updated accordingly to send the specifics on each termination of employment event.
• If your company uses our online COBRA event tools, the options to select Voluntary/Involuntary Terminations has always been an option, we will remove the option to submit Termination of Employment from the web-portals before 3/31/2021.

Employers are required to send notices to everyone terminated since last March
• The Act tasks the Department of Labor (DOL) and Internal Revenue Service (IRS) with issuing regulations and guidance regarding the application and administration of the COBRA subsidy provisions of the Act.
• In addition, the Act requires the DOL to produce model COBRA election notices within 30 days of enactment and a model COBRA premium subsidy expiration notice within 45 days of enactment.
• Employers will have to wait for these model notices to send, to ensure compliant notices are sent.
• Diversified Administration (my go to COBRA Administrator) will handle the generation and distribution of the notices for all COBRA clients once model notices are released.

Employers also have a second notice requirement at the end of the person’s subsidy period, to advise them of such.
• Diversified Administration will handle the generation and distribution of the notices for all COBRA clients.

Employers will have to pay up front for COBRA participants coverages and then get the money back through payroll tax credits/refunds
• Premium initially is “advanced” by the employer, plan, or insurer and then reimbursed by the government through a refundable tax credit (against Medicare hospital insurance (HI) taxes).
• For self-insured plans, the COBRA premium is covered by the employer and reimbursed through a payroll tax credit.
• For fully insured plans, the tax credit is claimable by the insurer and/or employer.
• This mechanism as described in the legislation is complex, and we’re awaiting the DOL/IRS guidance on the specifics of the credits.

Employee Benefit Advisors provides employee benefits, tax-advantaged healthcare, compliance guidance for ACA and Health & Welfare DOL Audits, and PEO Advisory & Consulting Services. We can customize a wellness plan for your budget and culture.

Yes, employers can require mandatory vaccinations, as a matter of prior health crises and common law. There will be some industries where it is going to be a mandate, like healthcare.

There are however possible exceptions; medical conditions, bona fide religious objection.

Two important questions.

1. How can employers enforce this rule?
2. What are alternatives to an employer mandate to get employees on board?

EBA has the answers to these questions and more.

Employers will need to have an administration process in place including privacy issues will play. Where can employers turn for guidance to formulating and implementing a plan? Contact Employee Benefit Advisors, we work with top HR Consultants like Ivelices Thomas, HR & Beyond.

Employee Benefit Advisors provides employee benefits, tax-advantaged healthcare, compliance guidance for ACA and Health & Welfare DOL Audits, and PEO Advisory & Consulting Services. We can customize a wellness plan for your budget and culture.