Benefit Beat - 2011 through current

The New York City’s Earned Safe and Sick Time Act (ESSTA) was amended in September to align the law with the state’s paid sick leave law.  As a result of these changes, affected employers are required to provide an updated notice of ESSTA rights to their employees by January 1, 2021.  To satisfy this requirement, the City’s enforcement agency released an updated model notice that can be used by impacted employers.

The state of Maine enacted a broad paid personal leave law last spring, which takes effect January 1, 2021.  To implement the provisions of this law, the state’s Department of Labor recently issued final rules.  With the fast-approaching effective date, employers impacted by this law are encouraged to review their obligations to ensure compliance with the law. 

To assist health insurers, third party administrators, plan sponsors and employers in their compliance with the federal mental health parity laws, the tri-governing agencies (Departments of Labor, Health and Human Services and Treasury) continue to provide tools and guidance.  In its bi-annual obligation to provide a compliance tool, the DOL released a revised version of a Compliance Tool.  Plans sponsors are encouraged to review the Tool to ensure that their group health plan is in compliance with the law.

The Department of Labor’s Employee Benefit Security Administration enforces compliance with laws governing private sector retirement and welfare benefit plans.  The agency recently published its enforcement actions accomplished in fiscal year 2020.  As an example of its enforcement action, EBSA provides a good reminder about proper handling of participant contributions and how essential it is to ensure that participant contributions are used for the exclusive purpose for which they are withheld. 

Many types of account-based plans have been negatively impacted by the COVID turmoil.  Given the changed landscape of employment, many participants have not been able to use amounts from their account-based plans, such as a medical flexible spending account, dependent care spending account, or qualified transportation account.  Two recent IRS Information letters address these situations. 

The Social Security Administration announced a 1.3% inflationary adjustment applicable to the maximum amount of earnings subject to the Social Security tax for 2021. 

Certain contribution and income limitations applicable to defined benefit and defined contribution plans are subject to indexing.  The IRS has released various 2021 cost of living adjustments for several of these plans. 

November 03, 20202021 Benefit Plan Limits

The IRS released several 2021 cost of living adjustments for various aspects of benefits including the flexible medical spending account cap, transportation and adoption assistance benefits, Archer MSA limits, long term care premium, the small business tax credit and small employer health reimbursement arrangements, and the premium tax credit for coverage under a qualified health plan.

Individuals employed in the state of New Jersey may be entitled to temporary benefits for a disability caused by non-occupational sickness or accident, including pregnancy and related medical conditions.  The law applies to those employers who are subject to the state’s Unemployment Insurance law.  The New Jersey Department of Labor and Workforce Development released the maximum unemployment (UI) and temporary disability insurance (TDI) benefit rates, the alternative earnings and base week amounts, and the taxable wage base contribution rates for calendar year 2021.

In response to the COVID-19 outbreak this year, many existing paid sick leave laws in states and local jurisdictions have been enacted to provide for certain benefit and leave protections.  This article highlights a few state and local developments with regard to these temporary COVID-related leaves of absence laws, namely California, Sacramento County, District of Columbia, and Philadelphia.  Of particular note, a new law in California imposes a new reporting and notification obligation on employers.

Mayor De Blasio signed amendments to the New York City’s Earned Safe and Sick Time Act (ESSTA).  These amendments align the ESSTA with the state’s paid sick leave law, which took effect on September 30, 2020.

California’s Governor Newsom signed a law that makes significant changes under two of the state’s existing family and medical leave entitlements.  First, the new law expands the California Family Rights Act (CFRA) to apply to small employers, as well as expands the definition of family members and the reasons for job protected leave.  Secondly, as a result of the changes made by the CFRA amendments, the state’s New Parent Leave Act will sunset.  In Massachusetts and New York, the relevant state enforcement agencies of their respective paid family leave programs provide updates for 2021 under their state-wide leave programs.

October 08, 2020SECURE Act Updates

The IRS recently issued guidance addressing several aspects of the Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act).  Of particular note, this guidance clarifies provisions relating to plan participation for long-term part-time employees, withdrawals for birth or adoption expenses, and the tax credit available for costs associated with establishing small employer pension plans.

Two recent cases point out the importance of abiding by ERISA plan language.  In one case, the court decision made clear that if the intent is to require participants to follow an administrative process, it must be communicated clearly to them.  The other court decision emphasizes that if a plan wants the court to respect its discretionary authority, it should make certain that plan participants know about it.

As employers and insurers are negotiating plan renewals, a new wrinkle is important to consider.  Rather than reducing premium rates, insurers are offering employers/plan sponsors a variety of concessions. These concessions are coming in many shapes, colors and forms. If the employer/plan sponsor does not consider these carefully, these concessions could end up being ‘wolves dressed in sheep’s clothes’, particularly as it relates to ERISA.