HCM Insights September 2023

Upcoming Holidays

Columbus Day

The upcoming Columbus Day Holiday falls on Monday, October 9, 2023.  While CBIZ HCM offices will be open this day, this is a Federal Reserve Bank Holiday, which means payroll draft dates may need to be adjusted.

Important Payroll Deadlines

New Transition Period for Roth Catch-Up Requirements

Employers now have two more years to adjust their benefits plans to meet the catch-up contributions changes outlined in the Secure Act 2.0.
Updated guidance from the IRS extends the transition period for pre-tax Roth catch-up contributions until 2026. Before this announcement, many plans were racing to meet the January 1, 2024, deadline.

ACA Pay or Play Affordability Percentage Decreases

Employers may need to raise their contribution towards employee health premiums due to the Affordable Care Act's (ACA) affordability percentage decrease, which lowers the employee contribution threshold.

Per a recent IRS announcement, the ACA affordability percentage for 2024 is 8.39%, the lowest rate since the start of the ACA employer mandate. This means that employees will be required to pay a smaller percentage towards their monthly medical premiums than in 2023.

Section 125 Premium Only Plan Basics

Premium-only plans (POPs) have become increasingly popular in employee benefits, in large part because these plans allow employees to pay their share of insurance premiums with pre-tax dollars, leading to considerable tax savings for both employers and employees. While many understand the tax advantages of POPs, it’s important to note that certain requirements must be met to maintain compliance.

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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.