Complying with the regulations that govern company benefits can be a challenge for employers of any size or industry. This year, benefits compliance will continue to be impacted by the ongoing COVID-19 pandemic, and with a new presidential administration in place, more changes may be on the horizon. As a result, you’ll need to stay abreast of new legislative developments as the year unfolds.
In the meantime, follow these useful tips to keep your benefits program in good compliance health in 2021:
Review ongoing Affordable Care Act (ACA) benefits compliance
The Affordable Care Act is a central fixture in benefits compliance, and it carries no shortage of requirements, many of which have been in place since the law was enacted in 2010. For example, the ACA requires a waiting limit of no longer than 90 days before eligible employees can receive healthcare coverage, as well as coverage for individuals with pre-existing conditions. The ACA also requires employers to provide all new hires with a notice regarding available ACA marketplace coverage.
In 2021, there are some new requirements to ensure your health plans maintain benefits compliance with the ACA. Key changes include:
- Affordability mandate: The ACA has raised the affordability standard for employee contributions from 9.78 percent to 9.83 percent of the employee’s income in 2021. Applicable large employers must make sure employee required contribution amounts do not exceed that amount, or risk ACA non-compliance penalties.
- Out-of-pocket maximums: For non-grandfathered health plans, the annual high deductible health plan (HDHP) out-of-pocket expense limit must not exceed $7,000 for individual and $14,000 for family coverage, up from $6,900 and $13,800, respectively, in 2020.
Follow legal requirements for COVID-19 testing and vaccination
Since early 2020, the Equal Employment Opportunity Commission (EEOC) has provided continuously-updated guidance to help employers understand allowable practices for managing COVID-19 in the workplace. In pre-COVID times, testing and vaccination requirements for illness were prohibited in the workplace as they were deemed discriminatory. Now, employers may not only require COVID-19 testing in the workplace but vaccination as well.
As the COVID-19 vaccine becomes more available, you’ll need to keep benefits compliance practices in line with requirements set by laws such as the Americans with Disabilities Act (ADA), the Health Insurance Portability and Accountability Act (HIPAA), and the Genetic Information Nondiscrimination Act (GINA). These laws govern how to protect employees’ rights to keep their health information private, as well as the allowable actions you can take to protect employees from COVID-19 in the workplace.
Remind employees of 2021 401(k) and HSA Limits
A critical part of benefits compliance includes helping your employees stay within allowable contribution limits for various tax-advantageous investment plans. To make sure employees don’t exceed annual limits, it’s a good idea to remind them of the changes for 2021. The flexible spending account (FSA) limit for 2021 remains unchanged at $2,750, but the 401(k) and HSA limits have changed slightly, as follows:
- 2021 HSA limits: $3,600 for individual and $7,200 for family coverage, up from $3,550 and $7,100 in 2020.
- 2021 401(k) limits: Remains unchanged at $19,500. However, the IRS increased the total contribution limit from $57,000 to $58,000 per person ($64,500 for individuals over 50).
Keep track of paid leave requirements and allowances
COVID-19 brought the passage of the Families First Coronavirus Response Act (FFCRA), which provided paid leave benefits to employees who were ill or caring for a family member battling the disease. Though the FFCRA expired at the end of 2020, employers may voluntarily choose to continue offering FFCRA leave benefits to employees at no added cost. Per the Department of Labor, those who continue to offer the benefit can use payroll tax credits to cover the cost through the end of March 2021.
As you move through 2021, keep benefits compliance at the top of your priority list. Doing so will help you avoid non-compliance penalties and stay up-to-date with the requirements for providing your employees with well-managed benefits programs and resources.
If you need help automating your benefits to reduce your compliance risk, reach out to our team to discuss our automation solutions for managing benefits enrollment, ACA, benefits reconciliation, COBRA and more!