With just days to go before the new year, President Biden signed the Consolidated Appropriations Act, 2023, into law on December 29, 2022, which includes the SECURE 2.0 Act of 2022 (“SECURE 2.0”). SECURE 2.0 expands on and, in some cases, modifies changes to the laws governing retirement plans brought about by the Setting Every Community Up for Retirement Act of 2019 (the “2019 SECURE Act”). Key provisions of SECURE 2.0 that amend the Employee Retirement Income Security Act (“ERISA”) and Internal Revenue Code (the “Code”) include a mandatory automatic enrollment and escalation feature for new Section 401(k) and 403(b) plans starting in 2025, updated required beginning dates for taking required minimum distributions, an expansion of the Internal Revenue Service (“IRS”) Employee Plans Compliance Resolution System (“EPCRS”), and more “Rothification” of savings opportunities for retirement plan participants. Plan amendments under SECURE 2.0 are generally required by the last day of the first plan year beginning on or after January 1, 2025 for single-employer plans. SECURE 2.0 also directs the Department of Labor (“DOL”) and IRS to issue various new regulations in accordance with its provisions. This blog post summarizes some of the key features of SECURE 2.0.
IRS Releases 2023 Cost of Living Adjustments for Benefit Plans
The Internal Revenue Service (IRS) has released its annual cost-of-living adjustments applicable to employee benefit plans for 2023. A year-to-year comparison of limitations can be found here: 2023 Annual Limitations Chart
These contribution limits are generally adjusted for inflation and, consistent with prior years, the IRS has increased the limits based on a cost-of-living index. For 2023, the adjustments to qualified retirement plan limitations include an increase in the contribution limit (section 415 limitation) for defined contribution plans from $61,000 to $66,000, and an increase to the annual compensation limit for purposes of Internal Revenue Code Section 401(a)(17) from $305,000 to $330,000 (from $450,000 to $490,000 for certain governmental plans).…
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Transparency in Coverage Deadline Looms – Are You Ready?
The Affordable Care Act contains broad provisions requiring health insurers and group health plans to make substantial amounts of information available to the public to facilitate transparency in health care pricing, and several recent Executive Orders have also focused on the availability of health pricing information. In 2020, under the authority of the Affordable Care Act, the Departments of Health and Human Services, Labor, and the Treasury issued transparency in coverage regulations (often referred to as the “TiC Rules”), which require most health plans and health insurance issuers in the group and individual markets (“Plans and Issuers”) to publicly disclose health plan pricing and cost sharing information. The first deadline under the TiC Rules was originally set for January 1, 2022, but was delayed to July 1, 2022 in part due to the enactment of the Consolidated Appropriation Act (which contained additional, and somewhat overlapping, transparency in coverage rules).
Specifically, by July 1, 2022, the TiC rules require that each Plan and Issuer make two “machine readable files” (or “MRFs”) of pricing information available on its public website. Generally speaking, the MRFs that must be available must include (1) the payment rates negotiated between plans or issuers and providers for all covered items and services (the “In-Network File”), and (2) the unique amounts a plan or issuer allowed, as well as the associated billed charged for covered items or services furnished by out-of-network providers during a specified time period (the “Out-of-Network File”). (The deadline for a third file, which must contain pricing information for prescription drugs, was originally January 1, 2022, and has been extended indefinitely pending coordination with similar requirements under the Consolidated Appropriations Act.) Plans and Issuers are not required to disclose information that would violate health privacy laws. The MRFs must be updated monthly and clearly note the date they were last updated. The MRFs must be in a non-proprietary, open-standards format that is “platform independent” and available to the public without restrictions that would impede re-use, such as a JSON file. Microsoft Word, Microsoft Excel, and PDF files are not acceptable because they are proprietary formats.…
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IRS Releases 2022 Cost of Living Adjustments for Benefit Plans
The Internal Revenue Service has come through on its annual holiday gift of releasing annual cost-of-living adjustments applicable to employee benefit plans. A year-to-year comparison of limitations applicable to benefit plans can be found here: 2022 Annual Limitations Chart
As in prior years, most of the benefit plan limitations have increased. Notably, these increases include…