Understanding Employee Benefits and key developments in the employee benefits field and items of interest to our clients. MORE

On August 3, 2022, the IRS published Notice 2022-33, which extends the deadlines for amending retirement plans and IRAs to reflect certain changes to the law made by the SECURE Act; the Bipartisan American Miners Act; and section 2203 (allowing waiver of 2020 required minimum distributions) of the CARES Act.  Before the IRS released Notice 2022-33, retirement plans with a calendar year plan year and IRAs generally were required to amend their plan documents to reflect those law changes by December 31, 2022 (although governmental plans and collectively bargains plans were subject to a later deadline); now, that deadline generally is December 31, 2025.  This new amendment deadline varies based on the type of retirement plan and the sponsor of such retirement plan.  The table below shows the original and revised amendment adoption deadlines for IRAs and various types of retirement plans.  Plan sponsors will notice that under Notice 2022-33, the amendment deadline for the applicable SECURE Act, Miners Act, and CARES Act provisions is the same.  The IRS anticipates that this will allow plan sponsors to adopt a single amendment that covers all three pieces of legislation, as applicable.

One key thing for the retirement plan sponsors to remember is that if they operationally implemented any of the other retirement plan provisions from the CARES Act, such as allowing coronavirus-related distributions or increasing the amount that participants could borrow from a retirement plan during 2020 or extending the repayment due date of plan loans outstanding during 2020, the deadline to adopt an amendment reflecting a retirement plan’s implementation of those provisions has not been extended by Notice 2022-33.  This means that sponsors of nongovernmental, calendar-year plans still have a December 31, 2022 deadline for those amendments.

The extended deadlines apply to both individually designed retirement plans and retirement plans using pre-approved plan documents.  Notice 2022-33 does not provide any relief for retirement plans that are terminated before the extended deadline – those plans are still required to be amended for all law changes in connection with their termination.  Nor did Notice 2022-33 extend the deadline for plan sponsors using pre-approved plan documents to adopt a cycle 3 restatement.  If a plan sponsor failed to adopt a cycle 3 restatement by July 31, 2022, it may correct this error using the IRS Voluntary Correction Program (“VCP”).

Please feel free to contact any member of Stinson’s Employee Benefits practice if you any questions about the deadline to amend a retirement plan or using VCP to correct a failure to timely adopt a cycle 3 restatement.


Employers sponsoring 401(k) or other types of defined contribution plans “pre-approved” by the Internal Revenue Service (IRS) should be aware that the restatement deadline is quickly approaching. The IRS requires pre-approved plans to be amended and restated every six years to incorporate recent law changes. The deadline for the current restatement cycle, “Cycle 3,” is July 31, 2022. You should have received one or more notices from your current document provider. Failing to timely adopt a Cycle 3 restatement may jeopardize a plan’s favorable tax status.

Employers should also be aware that due to the timing of the IRS’s review and approval of pre-approved plan documents, Cycle 3 plan documents only includes law changes prior to February 1, 2017. Therefore, employers must separately adopt good-faith interim amendments for more recent law changes, for example the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

Stinson sponsors pre-approved defined contribution plan documents. Please contact any member of the Stinson Employee Benefits Group about timely updating of your defined contribution plan document. Contacts for the Minneapolis, Minnesota office are: Jeff Cairns and Audrey Fenske. Contacts for the Kansas City, Missouri office are: Phil McKnight, Tom Dowling, Sam Butler, and Elizabeth Delagardelle.

On March 15, 2022, the Consolidated Appropriations Act of 2022 (“2022 CAA”) was signed into law. Among other things, the 2022 CAA temporarily restores the telehealth relief provided under the CARES Act. The CARES Act permitted high deductible health plans (“HDHP”) to provide telehealth services or other remote care services without applying a deductible. This allowed individuals covered under a HDHP that waived the deductible for telehealth services or other remote care to maintain HSA eligibility.  Under the CARES Act, this relief was available for plan years beginning on or before December 31, 2021, meaning it expired for calendar year plans at the end of 2021.

Under the 2022 CCA, HDHPs may, but are not required to, provide telehealth and other remote services without applying a deductible for the months of April 2022 through December 2022 without running afoul of the HSA eligibility rules (“Extended Telehealth Relief”). This means, however, that if a plan year started between January 1, 2022 and March 31, 2022 (the “Gap Period”), such as a calendar year plan, the Extended Telehealth Relief was not available for the plan for the Gap Period. If the plan did not impose the minimum deductible for telehealth or other remote services during the Gap Period, the plan may not be a HDHP during the Gap Period, meaning that participants would be ineligible for HSA contributions during that period.

As mentioned above, the Extended Telehealth Relief is optional.  If a plan sponsor decides to implement the Extended Telehealth Relief, it should take the following steps:

  • If the HDPH is fully insured, the plan sponsor should contact its HDHP carrier to ascertain whether the carrier’s plans will adopt the Extended Telehealth Relief from April 2022 to December 2022. If the Extended Telehealth Relief is adopted, the plan sponsor should also ensure that the changes are made to its plan documents and are communicated to HDHP participants.
  • If the HDHP is self-insured, the plan sponsor should consult with its stop-loss carrier and third party administrator regarding the telehealth relief extension. It should also ensure that the changes are made in its plan documents and that HDHP participants are notified of such changes.

Additionally, if a plan sponsor of a calendar year HDHP (or other plan year beginning before April 1) did not impose the minimum deductible for telehealth or other remote services during the Gap Period, it should contact experienced benefits counsel to determine the appropriate course of action.

Section 405 of the Employee Retirement Security Act of 1974 (ERISA) provides for joint liability for co-fiduciaries of a pension, health or welfare benefit plan.  In this case, there was an enrollment error in signing up an employee for life insurance coverage with his employer – Georgio Armani Corp.  The surviving spouse, Soohyun Cho sued the insurance carrier – Reliance for the balance of the $500,000 death benefit after Reliance paid her only $50,000 on the claim.

The Federal District Court in the Central District of California dismissed a Third-Party Action impleading the employer Armani for contribution or indemnification as a co-fiduciary administrator for the life insurance plan.  The District Court relied on 9th Circuit case law which found that there is no recognized claim for indemnification against another fiduciary.  The 8th Circuit (which includes, Minnesota, North Dakota and Missouri) has ruled similarly.

In the District Court, Reliance was found liable for the $500,000 coverage amount under the group life insurance plan. Interestingly, the District Court found that the enrollment was defective as no proof of insurability was given by the employee, but because the plan accepted the higher premiums for “over a year” without proof of insurability, the carrier was ordered to pay the benefit.

Reliance brought an appeal to the 9th Circuit, which was denied on July 9th, 2021.  Reliance petitioned the 9th Circuit decision to the U.S. Supreme for certiorari. On February 22, 2022, the Supreme Court denied review of the decision and let the split in the Circuits remain. The Second and Seventh Circuits allow indemnification from co-fiduciaries. This decision is another reason for plan administrators and other fiduciaries to maintain adequate fiduciary insurance coverage in the event of claims for breach of fiduciary duty.

As indicated in our January 11, 2022 blog post and alert, the Department of Labor, the Department of Health and Human Services, and the Treasury (the “Agencies”) issued FAQs Part 51 on January 10, 2022, requiring group health plans to cover over-the-counter (“OTC”) COVID-19 tests without participant cost-sharing, preauthorization, or medical management.  In response to stakeholder feed-back regarding FAQs 51, the Agencies released FAQs 52 on February 4, 2022. The new guidance provides additional flexibility for complying with the safe harbor that allows plans providing direct coverage of tests obtained from network pharmacies and a direct-to-consumer shipping program to limit reimbursement for tests purchased from non-preferred pharmacies or retailers to $12 per test (“$12 Safe Harbor”), and answers other questions from stakeholders regarding the mandated OTC COVID-19 test coverage.

Guidance Related to the $12 Safe Harbor

Effective February 4, 2022, the $12 Safe Harbor has been clarified as follows:

  • To comply with the safe harbor’s requirement that the direct coverage program provide adequate access (based on facts and circumstances), OTC COVID-19 tests must generally be made available through “at least one direct-to-consumer shipping mechanism and at least one in-person mechanism.” The Agencies did, however, recognize that there may be some limited circumstances in which a direct program could provide adequate access without providing both a direct-to-customer shipping mechanism and an in-person mechanism.
  • A “direct-to-consumer shipping mechanism” includes programs that provide direct coverage of tests without requiring plan members to procure the OTC COVID-19 test at an in-person location. Examples include online or telephone ordering, and may be provided through a pharmacy or retailer, the plan or health insurance issuer directly, or any other entity on behalf of the plan.
  • Reasonable shipping costs related to the OTC COVID-19 tests must be covered by the plan or issuer. The shipping costs are included in the $12 reimbursement limit.
  • A plan or insurance issuer will not fail to comply with the $12 Safe Harbor if it is temporarily unable to provide adequate access to OTC COVID-19 tests through its direct coverage program because of a supply shortage.
  • The plan or issuer is not required to cover all FDA-approved OTC COVID-19 tests under its direct coverage program to satisfy the adequate access requirement.

Additional Guidance

The February 4, 2022 guidance also provided the following clarifications:

  • The requirement to provide OTC tests without participant cost-sharing, preauthorization, or medical management, described in FAQs Part 51 and Part 52, does not apply to at-home OTC COVID-19 tests that require a laboratory or other healthcare provider to process the results.
  • A plan or insurance issuer may disallow reimbursement for tests purchased from private individuals or on-line auctions, limit reimbursement to established retailers who typically sell OTC COVID-19 tests, and establish other reasonable policies to prevent fraud and problematic behaviors that could limit access to tests.
  • A participant may not double dip by having the medical plan reimburse the participant for the costs of the OTC COVID-19 tests and being reimbursed from a health flexible spending account (FSA), health savings account (HSA), or health reimbursement account (HRA). If a participant is reimbursed by both the medical plan and an FSA or HRA, the participant should contact the plan administrator regarding correction procedures.

Beginning January 15, 2022, and through the duration of the public health emergency, insurers and group health plans must cover at-home COVID-19 diagnostic tests available over-the-counter (OTC) without imposing cost-sharing, prior authorization, or other medical management requirements. This requirement stems from the latest guidance issued on January 10, 2022, by the Department of Health and Human Services, the Department of Labor, and the Treasury.

Group health plans will need to determine whether they will provide this coverage by reimbursing sellers of OTC COVID-19 tests directly (referred to as “direct coverage”) or by requiring participants to submit a claim for reimbursement. Plans that provide direct coverage may not limit coverage to preferred pharmacies or retailers. However, the guidance provides a safe harbor that allows plans to limit reimbursement for tests purchased from non-preferred pharmacies or retailers to $12 per test or the cost of the test, whichever is less.

Regardless of the reimbursement method used, plans may limit the number of OTC COVID-19 tests reimbursed to no less than eight tests per covered individual per 30-day period (or calendar month). The guidance also allows plans to take reasonable steps to address fraud and abuse. For example, plans can require an attestation that the test was purchased for personal use and not employment purposes, will not be reimbursed by another source, and is not for resale.

Given the short timeframe to implement this required coverage, group health plans will need to make reimbursement and limitation decisions quickly. In addition, plans will need to consider how best to communicate OTC COVID-19 testing coverage to participants.

Updated November 18, 2021

On November 4, 2021, the Internal Revenue Service (IRS) released Notice 2021-61, which sets forth the 2022 cost-of-living adjustments affecting dollar limits on benefits and contributions for qualified retirement plans.  The health savings account (HSA) and high deductible health plan (HDHP) annual deductible and out-of-pocket expense adjustments were announced earlier this year in Revenue Procedure 2021-25.  In addition, the Social Security Administration announced its cost-of-living adjustments for 2022 on October 13, 2021, which includes a change to the taxable wage base.

The IRS previously issued guidance on temporary COVID-19 relief for cafeteria plans provided in the Consolidated Appropriations Act.  Among other things, these temporary rules allow employers to amend their cafeteria plans to permit all unused balances at the end of the 2021 plan year in health or dependent care FSAs to be used for expenses in 2022.  For more information about these temporary rules, see Stinson’s previous blog: IRS Guidance on Coronavirus Relief for FSAs, DCAPs, and Cafeteria Plans: Almost Anything Goes.

The following chart summarizes the 2022 limits for benefit plans. The 2021 limits are provided for reference.

  2021 2022
Elective Deferral Limit 401(k), 403(b), 457(b) $19,500 $20,500
Catch-up Limit (age 50+) $6,500 $6,500
(no change)
Defined Benefit Limit $230,000 $245,000
Defined Contribution Limit $58,000 $61,000
Dollar Limit – Highly Compensated Employees $130,000 $135,000
Officer – Key Employee $185,000 $200,000
Annual Compensation Limit $290,000 $305,000
SEP Eligibility Compensation Limit $650 $650
(no change)
SIMPLE Deferral Limit $13,500 $14,000
SIMPLE Catch-up Limit (age 50+) $3,000 $3,000
(no change)
Social Security Taxable Wage Base $142,800 $147,000
ESOP 5 Year Distribution Extension Account Minimum $1,165,000 $1,230,000
Additional Amount for 1-Year Extension $230,000 $245,000
HSA (Self/Family) Maximum Annual Contribution $3,600/$7,200 $3,650/$7,300
HDHP Minimum Deductible Limits $1,400/$2,800 $1,400/$2,800
(no change)
Out-of-pocket Expense Annual Maximum $7,000/$14,000 $7,050/$14,100
Medical FSA $2,750 $2,850


For more information on the 2022 cost-of-living adjustments, please contact Jeff Cairns, Stephanie Schmid or the Stinson LLP contact with whom you regularly work.

On October 4, 2021, the Department of Health and Human Services, Department of Labor and Treasury jointly issued FAQs relating to COVID-19 vaccine incentives and surcharges. Under the guidance, employers may provide incentives such as premium discounts or surcharges through group health plans to incentivize COVID-19 vaccines, provided the incentive complies with the activity-only wellness program regulations. An activity-only wellness program must meet the following requirements:

  1. The program must give individuals eligible for the program the opportunity to qualify for the reward at least once per year.
  2. The reward, along with all other wellness incentives for health-contingent programs under the plan, must not exceed 30% of the total cost of employee-only coverage.
  3. The program must be reasonably designed to promote health or prevent disease.
  4. The full reward must be available to all similarly-situated individuals, including providing a reasonable alternative standard.
  5. The plan must disclose the availability of a reasonable alternative standard in all plan materials describing the wellness program.

The guidance provides examples of ways for employers to meet the five requirements above. For example, to meet the reasonable alternative standard requirement, the wellness program may offer a waiver or a right to attest to following other COVID-19 guidelines (e.g., masking requirements) to individuals for whom it is unreasonably difficult due to a medical condition or is medically inadvisable to receive the COVID-19 vaccine.

The guidance also clarifies how rewards are treated for purposes of determining affordability with respect to employer shared responsibility payments under the Affordable Care Act (ACA). Premium discounts are treated as “not earned” for purposes of determining an employee’s required contribution. Therefore, if a program provides premium discounts for receiving a vaccination, those discounts are disregarded in determining affordability. On the other hand, if a program provides for surcharges to those who do not receive a vaccine, the employer must assume the surcharge applies.  As a result, employers will need to carefully consider how any such program is implemented to appropriately manage potential ACA liability.

Finally, employers should note that the FAQs do not address other wellness program requirements like the Americans with Disabilities Act and Genetic Information and Nondiscrimination Act.

On May 18, 2021, the Internal Revenue Service (IRS) released much-anticipated guidance on premium subsidies for continuation coverage under Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) provided by the American Rescue Plan Act of 2021 (ARPA).  For more information about the ARPA and COBRA subsidies, see Stinson’s previous blog: American Rescue Plan Act Contains Many Employee Benefit Related Provisions.

In addition to providing premium subsidies, the ARPA requires group health plans to provide notice to Assistance Eligible Individuals by May 31, 2021.  Although the Department of Labor (DOL) issued model notices and FAQs regarding premium subsidies and notice requirements, many questions remained. For more information about DOL’s model notices and guidance, see Stinson’s previous blog: DOL’s ARPA COBRA Subsidy Notices and FAQs: Stay Tuned for More. The latest guidance, IRS Notice 2021-31 (the “Notice”), addresses many of those remaining questions in the form of 86 questions and answers.  However, certain questions still remain, and more guidance is expected.  In this blog post, we provide a summary of those portions of Notice 2021-31 that address which qualified beneficiaries for purposes of COBRA are Assistance Eligible Individuals entitled to premium assistance under the ARPA (the “subsidy”), how employers can ascertain whether a qualified beneficiary is an Assistance Eligible Individual, when an Assistance Eligible Individual may elect COBRA continuation coverage, and a few other items of note or where questions remain under Notice 2021-31.  The Notice addresses many other questions, including how to calculate and claim the tax credit.

Who qualifies as an Assistance Eligible Individual

The COBRA subsidy is only available to individuals who qualify as an “Assistance Eligible Individual” under section 9501(a)(3) of the ARPA.  An individual qualifies as an Assistance Eligible Individual if such a person is a qualified beneficiary entitled to COBRA continuation coverage as a result of a covered employee’s reduction of hours or involuntary termination of employment for a reason other than gross misconduct.  Notice 2021-31 provides extensive guidance on what constitutes a reduction of hours or involuntary termination of a covered employee for purposes of determining if an employee and the employee’s spouse and/or dependents qualify as Assistance Eligible Individuals. The table below summarizes the guidance provided in Notice 2021-31.

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How an Employer Determines who is an Assistance Eligible Individual

As mentioned above, in order to qualify for the COBRA subsidy, qualified beneficiaries must be Assistance Eligible Individuals.  However, the COBRA subsidy is not available to qualified beneficiaries who are eligible for coverage under another group health plan or Medicare. Notice 2021-31 states that an employer may require each individual to provide a self-certification or attestation regarding the individual’s eligibility status (i.e., reduction in hours, involuntary termination, and eligibility for Medicare or other disqualifying group health plan coverage).  While an employer is not obligated to require self-certification or attestation regarding the individual’s eligibility status, an employer who claims a tax credit must retain records that substantiate an individual’s eligibility for the COBRA subsidy, which may include the self-certification or attestation. Notice 2021-31 allows an employer to rely on an individual’s self-certification or attestation for such proof of eligibility, unless the employer has actual knowledge that the self-certification or attestation is incorrect.  An employer may also rely on other evidence to substantiate eligibility (e.g., employer’s records regarding a reduction in hours or involuntary termination of employment).

When Assistance Eligible Individuals may elect COBRA 

An Assistance Eligible Individual must elect COBRA coverage with the subsidy within 60 days of receiving an extended election period notice and may elect coverage retroactive to the loss of coverage, if eligible, effective as of April 1, 2021, or prospectively.  However, the COBRA subsidy only applies for coverage beginning on or after April 1, 2021.

Any qualified beneficiary (including a spouse or dependent) who does not have a COBRA election in effect on April 1, 2021, but who would be an Assistance Eligible Individual if such an election were in effect, is eligible for the extended election period under the ARPA.  Even if an individual elected self-only COBRA coverage, a spouse or dependent, who is a qualified beneficiary with respect to a reduction in hours or involuntary termination, must receive a second opportunity to elect COBRA coverage under the ARPA.

A qualified beneficiary who elected some health coverage (for example, dental-only coverage, or health but not dental or vision coverage) upon a reduction of hours or involuntary termination is eligible for a second opportunity to elect coverage that the qualified beneficiary was enrolled in prior to the qualifying event and initially rejected at the time of the qualifying event.

Notice 2021-31 makes clear that the extended election period under the ARPA only applies to group health plans subject to COBRA and does not apply to State mini-COBRA laws, unless the State law specifically provides a similar extended election period.

Other Items of Note

COBRA subsidy election may truncate the Outbreak-related extension:  Q&A-56 of the Notice appears to require that an individual, who received a COBRA notice prior to April 1, 2021 and elects the COBRA subsidy, also elect, by the same deadline, retroactive coverage to the date coverage was lost, or lose the right to that retroactive coverage, cutting short the extended time period for that election that might otherwise be available under the coronavirus outbreak extension.  This impact on the ability to elect retroactive coverage was not addressed in the DOL’s model ARPA COBRA subsidy notice.

Extended second event/disability coverage period eligible for subsidy:  Q&A-17 of the Notice provides that coverage initially triggered by an involuntary termination of employment or reduction in hours, but which is extended by a second event or a disability determination (or state mini-COBRA), so that it extends into the subsidy period is potentially eligible for the COBRA subsidy.  It appears that the individual must have actually elected and remained on COBRA coverage throughout the extended period to be eligible, but it is not clear.  More guidance is expected.

Dental only/vision only COBRA coverage:  Q&A-35 of the Notice makes it clear that dental and/or vision only coverage is eligible for the subsidy.  However, the Notice does not address whether Medicare or medical coverage available through another employer’s plan would prevent the subsidy from being available for dental and/or vision coverage.  However, the statutory language providing for the subsidy seems to prevent an individual who is eligible for Medicare or coverage under an employer’s plan from being eligible for the subsidy, and the attestation in the DOL model COBRA subsidy notices requires the individual to affirm that they are not eligible for Medicare or another employer’s plan to be eligible for any kind of subsidy.  More guidance is expected.

Amount of tax credit:  Q&A-64 of the Notice clarifies that the amount of the credit is limited to the premiums that would have been charged to an individual in the absence of the COBRA subsidy and does not include any amount that the employer would have otherwise provided.  For example, if the applicable premium is $1,000 per month and absent the COBRA subsidy the employer requires individuals electing COBRA coverage to pay $500 per month, then the amount of credit the employer may receive is $500 per month.

On April 14, 2021, the Department of Labor’s (DOL) Employee Benefits Security Administration issued guidance on cybersecurity for the first time to help plan sponsors, fiduciaries, service providers, and participants protect personal information and retirement assets. In the guidance, the DOL identifies evaluating cybersecurity practices as part of the plan sponsor’s or other plan fiduciary’s duty to prudently select and monitor plan service providers and states that ensuring proper mitigation of cybersecurity risks is a fiduciary obligation.  The guidance is provided in three documents:

  • Tips for Hiring a Service Provider, which provides plan sponsors and fiduciaries with questions to ask before selecting a service provider and items to include in contracts with service providers;
  • Cybersecurity Program Best Practices, which includes best practices for recordkeepers and service providers and can be used by fiduciaries to prudently select service providers; and
  • Online Security Tips, which includes steps participants and beneficiaries can take to reduce the risk of fraud and losses to their retirement accounts.

The guidance is intended to complement the DOL’s regulations on electronic records and disclosures, which require a plan administrator using electronic disclosure to take steps reasonably calculated to protect the confidential information of participants and beneficiaries. For more information on the electronic disclosure regulations, see Stinson’s previous blog post: New DOL Electronic Disclosure Safe Harbor Offers Relief for Retirement Plans.

There has been a recent increase in litigation involving cybersecurity and retirement plans. Some of these lawsuits allege a breach of fiduciary duty by a plan administrator or plan sponsor for failing to prudently select and monitor service providers or by a service provider for failing to establish processes to prevent fraudulent withdrawals. Plan sponsors and fiduciaries should carefully review the new DOL cybersecurity guidance as part of broader measures to protect plan assets and personal information.

For more information, contact Audrey Fenske, Stephanie Schmid, or the Stinson LLP contact with whom you regularly work.