The Internal Revenue Service has issued welcome guidance related to the COBRA subsidy provisions under the American Rescue Plan Act (“ARPA”) in the form of IRS Notice 2021-31 (the “Notice”). As background, for the period from April 1, 2021, through September 30, 2021, ARPA requires employers to provide a 100% COBRA premium subsidy (the “COBRA Subsidy”) for “assistance eligible individuals” (an “Eligible Individual”). In general, an Eligible Individual is anyone who elects COBRA continuation coverage…
The American Rescue Plan Act of 2021 (the “ARPA”), was signed into law on March 11, 2021, and creates a temporary COBRA premium subsidy for certain qualifying individuals. This COBRA premium subsidy applies to all group health plans subject to the Employee Retirement Income Security Act of 1974. Thus, most employers will be impacted by the new COBRA subsidy. Employers will need to evaluate the impact of the ARPA not only with respect to COBRA…
Many employers will be surprised to learn that the American Rescue Plan Act of 2021 (“ARPA”), which was signed into law on March 11, 2021 and is primarily intended to provide an economic stimulus package of $1.9 trillion, expanded the group of covered employees under section 162(m) of the Internal Revenue Code of 1986, as amended (“Section 162(m)”), to include the five most highly compensated employees in addition to certain of the individuals already included…
On June 19, 2020, the IRS released Notice 2020-50 (the Notice) which provides additional guidance on tax-favored distributions from retirement plans and expanded plan loan relief under the “Coronavirus Aid, Relief, and Economic Security Act” (the CARES Act). As noted in our prior alert, the CARES Act provides that during the period January 1, 2020 to December 30, 2020, “qualified individuals” may take coronavirus-related distributions of up to $100,000 from their eligible retirement plans. A…
Employers considering COVID-19-related layoffs and RIFs right now should add one more item to their checklist of considerations: the possibility of inadvertently triggering a “partial termination” of their tax-qualified retirement plan. Where plan participant numbers decrease substantially, the plan may incur what’s known as a “partial termination.” This is significant because, once triggered, the IRS requires the benefits of all “affected employees” be fully vested. Failure to provide such vesting could put the plan’s tax-qualified…
The Coronavirus Aid, Relief, and Economic Security Act (the “Act”) was passed by the US House of Representatives by a voice vote today after being passed by the US Senate on Wednesday. The bill now heads to the White House, where President Trump is expected to sign it very soon. Below are some key retirement plan features of the Act: Coronavirus-Related Distributions. The Act would allow participants in eligible retirement plans to take distributions in 2020 of…
On September 24, 2018, the IRS issued Notice 2018-71 (Notice) on the temporary employer tax credit introduced by the Tax Cuts and Jobs Act for wages paid to Qualifying Employees while on covered family or medical leave under new Section 45S of the Internal Revenue Code (Code). In brief: Where the requirements of the Notice are met, the new credit may be claimed during tax years 2018 and 2019 for paid family and medical leave…
After an abrupt mid-year change, the IRS recently released Revenue Procedure 2018-27, which provides relief for employees with family coverage under a High Deductible Health Plan who also contribute to a Health Savings Account (HSA), by permitting such employees to use the previously announced $6,900 contribution limit for 2018 contributions. In May 2017, the IRS released Revenue Procedure 2017-37 which provided the annual inflation adjusted contribution limits for HSAs and stated that the 2018 contribution…