HCM Insights July 2022

Form 5500 - Due August 1

The upcoming Employers with employee benefit plans that operate on a calendar year must file their 2021 annual reports (Forms 5500) with the Department of Labor (DOL) by August 1, 2022. 

An employer must file a Form 5500 for each separate employee benefit plan that it maintains unless a filing exemption applies. Employers can combine different welfare benefits under a single plan to simplify their Form 5500 reporting obligation. 

Small welfare benefit plans (fewer than 100 covered participants) that are unfunded or fully insured (or a combination of unfunded and insured) are exempt from the Form 5500 filing requirement. 

Employers with calendar year plans that do not qualify for the filing exemption should work with their service providers to complete their Form 5500 and file it by August 1, 2022.

Typically, Form 5500 is due by July 31 for calendar year plans, but if the filing due date falls on a Saturday, Sunday, or federal holiday, it may be filed on the next business day. Employers can request an extension by filing Form 5588 by August 1, 2022.

The End of Transitional Good Faith Relief

Regulatory changes at the end of 2021 provided an automatic extension for filing Affordable Care Act (ACA) forms while ending the Internal Revenue Service (IRS) Transitional Good Faith Relief for ACA reporting.

Transitional Good Faith Relief went into effect in 2015 to allow organizations time to familiarize themselves with ACA reporting requirements. The policy was in place from 2015-2021. During that time, the IRS did not assess penalties for inaccuracies on forms such as names, addresses, social security numbers, or coding if the employer made good faith efforts to comply with the standing regulations.  

IRS publication reg-109128-21 states, “the transitional good faith relief from penalties under sections 6721 and 6722 for the reporting of incorrect or incomplete information on information returns or statements is not available for reporting for tax year 2021 and subsequent years.” 2021 is the first reporting where companies are subject to penalties. Fines can include $280 for the late/incorrect Forms 1095-C furnished to employees and $280 for the late/incorrect Forms 1094-C and 1095-C filed with the IRS. Employers can be fined simultaneously for inaccuracies on these forms, meaning a potential penalty of $560 per employee. (Note: The above penalties are separate from Employer Shared Responsibility Provisions (ESRP) penalties, which could apply should inadequate medical coverage be in question.) 

Penalty Snapshot 

• $280 - late/incorrect Forms 1095-C furnished to employees  
• $280 – late/incorrect Forms 1094-C and 1095-C filed with the IRS 
• $560 – Total possible fine for late/incorrect 1094-C & 1095-C forms 

Avoid Penalties 

Best practices suggest incorporating an ACA solution that ensures your reporting is accurate.  

Correct and timely filing of returns is essential to minimize any IRS penalty. 

Filing forms 1094-C and 1095-C and furnishing a copy to the employee is a requirement under the ACA’s Employer Mandate.  

Filing Deadlines 

According to the proposed regulations, employers have an automatic 30-day extension to furnish Forms 1095-B and 1095-C to their employees. This year employers had until March 2, 2022, to provide employees with these forms, which was 30-days after the original January 31, 2022, deadline. In years to come, this same regulation will allow employers until March 2 (or the next business day if March 2 falls on a weekend or holiday) to furnish the forms to employees.  

Prepare Your Team for an Active Shooter

The thought of losing a loved one, a friend, or a co-worker in an act of violence is unthinkable. In recent years, the increase in violent events in the workplace has forced employers to take action to keep employees safe. While workplace violence could occur in a variety of ways, the most frequently publicized are workplace shootings.  

Ways HR can Prepare for an Active Shooter 

There is no way to be truly prepared for an event of this caliber. However, HR teams can have plans that provide employees with tips and strategies they can act upon in the event of an active shooter.  

Emergency Action Plan 

To best prepare staff for an active shooter event, create an emergency action plan (EAP) and conduct training exercises. Together, the EAP and training activities will prepare team members to respond and help effectively minimize the loss of life. It is essential to create the EAP with the input of several stakeholders, including HR, the employee training department, facility owners or operators, property managers, and local emergency responders.  

Around the Office 

Having resources posted around the office is crucial to make it easier if a situation arises and will help employees and office visitors know what to do. Evacuation routes should be posted throughout the building. Crisis manuals should be readily available and include phone numbers for facility security and emergency services (local emergency information line, local police department, local fire department, local hospital, and local FBI field office). Ensure your facility’s address, including floor, suite, and room numbers, is also easily accessible, along with your office phone number and extension.  

New for 2023 - Benefits Coverage Transparency Rules

Companies planning for the 2023 benefits open enrollment need to consider some new requirements. For plan years beginning on or after January 1, 2023, group health plans and health insurance issuers must provide participants, beneficiaries, and enrollees with an internet-based price comparison tool. This requirement comes from final rules regarding transparency in coverage (TiC Final Rules) issued by the Departments of Labor, Health and Human Services, and the Treasury (Departments) in November 2020.

These rules were issued to increase transparency in health care and eliminate surprise medical bills. According to the Departments, the price comparison tool will enable individuals to obtain real-time, accurate estimates of their potential cost-sharing liability for covered items and services they might receive from different providers. This information will allow individuals to understand and compare health care costs before receiving care.  

Action Steps 

Employers with fully insured health plans should confirm that their health insurance issuer will comply with the price comparison tool requirements, beginning with 2023 plan years, and ensure this compliance responsibility is reflected in a written agreement. Similarly, employers with self-insured plans should reach out to their third-party administrators (TPAs) (or other service providers) to confirm they will be in compliance by the deadline and update agreements, as necessary, to reflect this responsibility.   

Most employers will rely on their health insurance issuers or TPAs to develop and maintain the price comparison tool and provide related disclosures. The TiC Final Rules require health plans and issuers to provide this information in paper form upon request. In addition, to comply with a transparency requirement added by the Consolidated Appropriations Act, 2021 (CAA), issuers should be prepared to give this comparison information over the telephone. 

New Mileage Rate Goes into Effect

With the increase in fuel prices, the Internal Revenue Service (IRS) announced an increase in the optional standard mileage rate. New rates went into effect on July 1, 2022, marking the third time since 2008 that the IRS has made a mid-year increase in the standard mileage rate. The IRS provided legal guidance on the new rates in Announcement 2022-13.

As of July 1, 2022, the standard mileage rates for the use of a car (including vans, pickups, or panel trucks) are as follows:

• 62.5 cents (up 4 cents from the rate for January – June 2022)
• 22 cents per mile driven for medical or moving purposes for qualified active-duty members of the Armed Forces (up 4 cents from the rate for January – June 2022)
• 14 cents per mile driven in service of charitable organizations. The rate is set by statute and remains unchanged

“The IRS is adjusting the standard mileage rates to better reflect the recent increase in fuel prices," said IRS Commissioner Chuck Rettig. “We are aware a number of unusual factors have come into play involving fuel costs, and we are taking this special step to help taxpayers, businesses, and others who use this rate.”

EEOC Offers Employers Training Workshops on EEO Laws 

To prevent employment discrimination, The Equal Employment Opportunity Commission (EEOC) is offering virtual training to both public and private sector employers. Course registration opened on June 8, 2022, and training sessions started on June 13, 2022, for Federal employers and on June 28, 2022, for private-sector employers.

About the EEOC Courses 

These workshops provide technical assistance and training and are designed for Human Resource (HR) professionals, EEO staff, attorneys, supervisors, managers, state and local government officials, federal agency EEO personnel, staffing agencies, and union officials. “The EEOC is the industry expert. We are excited to offer an array of courses and workshops for private-sector employers that are designed to address the most pressing needs in today’s workplace,” said Katrina Grider, EEOC’s revolving fund associate director for curriculum, training, and education.  

Private Employers   

The EEOC workshops for employers in the private sector began on June 28, 2022, and run through September. Classes cost $95 - $255 per person, depending on the class session length. These courses are generally designed for HR professionals, managers, supervisors, staffing agency representatives, and similar professionals who work in the private sector. Some of the topics being covered include: 

• Pay equity 
• Gender Inequities 
• Harassment 
• Racial justice and systemic discrimination 
• Civil rights and the pandemic 
• Retaliation 
• Algorithmic fairness and artificial intelligence 
•  LGBTQI+ issues 
• EEOC 2022 Legal Updates 

According to the EEOC website, pre-approval of the Society for Human Resource Management (SHRM) and HR Certification Institute (HRCI) recertification credits is requested for all seminars. Continuing Legal Education (CLE) credits are requested for most of their workshops.  

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The information contained in this HCM Insights is not intended to be legal, accounting, or other professional advice, nor are these comments directed to specific situations. This information is provided as general guidance and may be affected by changes in law or regulation. This information is not intended to replace or substitute for accounting or other professional advice. You must consult your own attorney or tax advisor for assistance in specific situations. This information is provided as-is, with no warranties of any kind. CBIZ shall not be liable for any damages whatsoever in connection with its use and assumes no obligation to inform the reader of any changes in laws or other factors that could affect the information contained herein.