OSHA Issues COVID-19 Vaccine Mandate
The DOL’s Occupational Safety and Health Administration (OSHA), released its long-anticipated emergency temporary standard (ETS) requiring employers with a total of 100 or more employees to institute written mandatory vaccination policies for their employees. The ETS is effective November 5, 2021. The ETS pre-empts state law and regulation concerning COVID-19 vaccinations, testing and face coverings, unless the state has a plan that has been approved by the federal government.
Because this mandate primarily involves employment and labor law, employers should consult with legal counsel regarding employer compliance with the new requirements.
All employees (temporary, seasonal, part-time, full-time, remote workers) working in the US are counted for purposes of determining if an employer is subject to the ETS. Workers employed by a temporary staffing agency are counted by the agency, not the host employer. Employer size is determined on November 5, 2021. Once an employer is subject to the requirement due to size, they remain subject for the entire ETS period.
Covered employers must establish, implement and enforce the written vaccination policy, although they can provide their employees with the choice of either becoming fully vaccinated or providing proof of regular COVID-19 testing and wearing a face covering. Note that employers must provide reasonable accommodations for employees who cannot be vaccinated due to the vaccine being medically contraindicated or a disability, or when doing so conflicts with a sincerely held religious belief, practice or observance. Neither the vaccine mandate nor the testing applies to employees who do not report to a worksite with customers or other coworkers, or to employees who work exclusively outdoors.
In addition to the policy, employers subject to the ETS must provide all workers up to four hours of paid time, including travel time, for each of their primary vaccination doses received during normal work hours at the employee’s regular rate of pay. Employers must provide reasonable time and paid sick leave to each employee for recovery from side effects following any primary vaccination dose. Two days of paid sick leave is considered reasonable.
Employers must determine each employee’s vaccination status and maintain records of that status. Examples of acceptable proof of vaccination status include COVID-19 vaccination record cards, copies of records of immunization provided by a healthcare provider, and a signed attestation from the employee that they are vaccinated (if they cannot provide one of the other forms of proof). These vaccination records are confidential medical records, and the employer must maintain them accordingly.
Employees who are not fully vaccinated must be tested for COVID-19 at least weekly (if the worker is in the workplace at least once a week) or within seven days before returning to work (if the worker is away from the workplace for a week or longer). The ETS does not require employers to pay for testing, although other laws, regulations, collective bargaining agreements or other collectively negotiated agreements may require it. Employers are also not required to pay for face coverings.
If an employee tests positive for COVID-19 or receives a COVID-19 diagnosis, they must provide prompt notice to their employer. Employers must then remove the employee from the workplace, regardless of vaccination status. Employers must not allow them to return to work until they meet required criteria, which includes a negative COVID-19 test, meeting the CDC’s return to work criteria or a recommendation from a licensed healthcare provider.
Employers must comply with most requirements within 30 days of the effective date and with testing requirements within 60 days of the effective date. This means that the written policy, leave and face covering requirements must be in place by December 5, 2021. Employees must either be fully vaccinated or subjected to regular testing by January 4, 2022. Note that there is a 30-day comment period that began on the effective date as well. Comments submitted in that time will be considered by the agency and may lead to changes in the ETS.
Note that this ETS does not apply to government contractors, which are subject to their own mandates. The Biden administration issued an executive order that requires government contracts to include language instituting vaccine mandates for government contractors. This mandate applies to all employees working on or in connection with a government contract and requires them to be vaccinated. Although employers must provide reasonable accommodations, government contract employees do not have the option to be tested weekly instead of getting vaccinated. The original due date for vaccinations under this ETS was December 8, 2021, but that has been extended to January 4, 2022, to be in line with the other mandates. Information on this mandate can be found here.
In addition to the ETS, CMS issued an interim final rule (effective starting November 5, 2021) that applies to certain Medicare and Medicaid-certified providers and suppliers, which includes hospitals, home health agencies, and long-term care facilities. The rule requires staff of those providers and suppliers have their second dose of the vaccination by January 4, 2022 (although they are not required to complete the two week waiting period). The rule does not provide a weekly testing option. The rule can be found here.
Note: On November 6, 2021, the US Court of Appeals for the Fifth Circuit issued a stay on the enforcement of the ETS, citing “grave statutory and constitutional issues with the mandate.” This stay is the result of action brought by private actors and several states, including Texas, Louisiana and South Carolina, and is effective until the court takes further action. The federal government must file a response to the petitioners’ request for a permanent injunction by the end of the day on November 8, 2021. The order can be found here.
IRS Provides COVID-19 Guidance on Retiree Rehires and Qualified Pension Plan Distributions
On October 22, 2021, the IRS provided COVID-19-related guidance regarding qualified pension plan distributions. The guidance, in the form of two new frequently asked questions (FAQs), addresses the rehiring of retirees and in-service distributions.
The first FAQ focuses upon the situation in which an individual retires and then commences benefit distributions from a qualified pension plan. The plan does not provide for in-service distributions to active employees, and due to unforeseen COVID-19 related hiring needs, the employer (and plan sponsor) rehires the individual.
The specific question posed is whether the individual’s prior retirement will no longer be considered a “bona fide retirement” because of the rehiring. For plans that do not permit in-service distributions, IRS rules for plan qualification to include a bona fide retirement requirement for the individual to receive retirement benefits. Neither the Code nor the IRS defines bona fide retirement, so the determination would typically be based on the facts and the circumstances surrounding the employment termination (and whether it was potentially designed to circumvent the distribution rules).
The IRS answer indicates that a rehire due to unforeseen circumstances that do not reflect any prearrangement will not cause the individual's prior retirement to no longer be considered a bona fide retirement under the plan. Therefore, if the plan terms permit, benefit distributions could continue after the rehire. However, the guidance advises employers to review any plan terms that may prohibit the rehire of a retiree within a specified timeframe, suspend distributions upon rehire, or otherwise impact the pension benefit of a rehire.
The second FAQ asks whether a qualified pension plan can allow a working individual to commence in-service distributions. The IRS response explains that the plan terms may generally allow an individual to commence in-service distributions upon attainment of either age 59½ or the plan's normal retirement age. However, distributions commencing before age 59½ may be subject to a 10% additional premature withdrawal tax, unless an exception to the tax applies.
Retirement plan sponsors, particularly those facing unanticipated pandemic-related labor shortages, may find this guidance helpful.
IRS Releases 2021 Form 1095-B
The IRS recently released the 2021 final version of Form 1095-B. As background, Form 1095-B is used by self-insured small employers (fewer than 50 full-time employees, including equivalents) to report covered individuals to the IRS to satisfy Section 6055 reporting as required by the ACA. A large, self-insured employer may also use the forms to report coverage for a non-employee (such as a retiree or COBRA participant), though most large employers use Form 1095-C for this purpose.
The forms must be filed with the IRS by February 28, 2022, if filing by paper and March 31, 2022, if filing electronically. Additionally, the completed form must be distributed to covered individuals by January 31, 2022. The penalties for failure to file and report are $280 per failure. This means that an employer who fails to file a completed form with the IRS and distribute a form to a covered individual would be at risk for a $560 penalty per individual.
For reporting years 2019 and 2020, the IRS granted relief for distributing Form 1095-B to covered individuals. Self-insured employers were not required to automatically provide the form as long as (1) a Form 1095-B was furnished within 30 days after an individual’s request is received; and (2) a notice with information about requesting Form 1095-B was prominently posted on the reporting entity’s website. Such relief has not yet been granted for 2021.
The 2021 form is unchanged from the 2020 version.
As always, self-insured employers should work with reporting vendors to comply with the ACA reporting requirements.
CMS Publishes 2022 ICHRA Employer LCSP Premium Look-up Table
An Individual Coverage Health Reimbursement Arrangement (ICHRA) is a type of HRA that allows employees to be reimbursed for an individual coverage premium, up to a maximum dollar amount that the employer makes available each year. In order to be eligible, an employee must be enrolled in individual health insurance coverage or Medicare Part A, B, or C; and an employer cannot offer a traditional health plan and ICHRA to the same class of employees.
CMS recently released the Plan Year 2022 ICHRA Employer Lowest Cost Silver Plan (LCSP) Premium Look-up Table to help ALEs determine whether their ICHRA offers are considered affordable under the employer mandate provisions. This information will also help determine if the employee is eligible for a Premium Tax Credit in the Marketplace (a.k.a., Exchange).
If an ALE offers ICHRAs to at least 95% of its full-time employees (and their dependents), the ALE will not be liable for the employer mandate’s Penalty A, which is a more severe penalty than the employer mandate’s Penalty B (References: Executive Order 13813 and IRS Notice 2018-88 ).
ALEs who sponsor ICHRAs can use this LCSP Premium Look-up Table to evaluate if the employer’s contribution to ICHRAs for each employee is considered affordable under the employer mandate. Under the safe harbor rule, an employer may use the lowest cost silver plan for employee-only coverage offered through the marketplace where the employee's primary site of employment is located for determining whether an offer of an individual coverage HRA to a full-time employee is affordable, instead of the lowest cost silver plan for the employee in which the employee resides.
The ICHRA Employer LCSP Premium Look-up Table contains LCSP individual market rates based on an eligible enrollee’s age and geographic location. The LCSP is the least expensive individual silver qualified health plan in a geographic area at the lowest age band. (Note: The ICHRA Employer LCSP Premium Look-up Table does not contain data from states with State-based Exchanges (SBEs) that do not use HealthCare.gov.)
For more information regarding ICHRAs, see the article published in the June 27, 2019, edition of Compliance Corner.
Employers who offer or are considering offering ICHRAs should be aware of this development.
CMS ICHRA Employer LCSP Premium Look-up Table »
IRS Application of the Employer Shared Responsibility Provisions and Certain Nondiscrimination Rules to Health Reimbursement Arrangements and Other Account-Based Group Health Plans Integrated With Individual Health Insurance Coverage or Medicare »
CMS Requires Agency Contact Information for Certain No Surprise Billing Disclosures
On October 25, 2021, CMS issued a memorandum to group health plans and insurers (among others) regarding agency contact information that must be included on certain No Surprises Act (the Act) notices and disclosures.
The Act is part of the Consolidated Appropriations Act, 2021 (CAA) passed by Congress in late 2020. Among its requirements, group health plans and insurers must post a notice disclosing the prohibition on surprise billing effective for plan years beginning in 2022. The notice must be made publicly available, posted on a public website of the plan or issuer, and included in each explanation of benefits. It is one page and must provide information concerning requirements and prohibitions under the Act, any applicable state balance billing limitations or prohibitions, and contact information for appropriate state and federal agencies if someone believes the provider or facility has violated the requirements described in the notice. A model notice was made available in the initial regulations. (For more information on the Act and the interim final rules, see the article published in the July 5, 2021, edition of Compliance Corner.)
The text of the model notice includes fields that must be completed by entering the URL for a website describing the federal balance billing protections and contact information for the applicable federal and state agencies. In the memorandum, CMS identifies the website to be included in the model notice where federal agency contact information is required. The website provides general information about the Act’s provisions, with additional information to be posted over the next several months. While the website is not fully complete or functional, it will be operational in January 2022 to receive complaints and other inquiries. HHS also operates a telephone number as another mechanism to submit complaints regarding potential violations of the CAA, which will then be routed to the appropriate agency as needed. Importantly, CMS requests that the phone number (1.800.985.3059) not be included in any plan documents for plan or policy years beginning before January 1, 2022.
While agencies indicated that additional guidance might be forthcoming regarding surprise billing disclosure requirements, plans should make good faith efforts to comply using the model notice and agency contact information provided by this memorandum for plan years beginning on or after January 1, 2022.
DOL Extends Temporary Enforcement Policy of Fiduciary Investment Advice Rules
On October 25, 2021, the DOL released Field Assistance Bulletin (FAB) No. 2021-02, announcing a temporary enforcement policy related to the prohibited transaction exemption (PTE) 2020-02. The DOL adopted PTE 2020-02 – Improving Investment Advice for Workers & Retirees – on December 18, 2020. The PTE accompanied the amended fiduciary conflict of interest rule that was finalized in June 2020. (We discussed the final conflict of interest rule and the PTE in the July 9, 2020 edition of Compliance Corner.)
PTE 2020-02 became effective on February 16, 2021, but the DOL provided temporary enforcement relief through December 20, 2021. Specifically, the DOL stated that it would not pursue prohibited transaction claims against investment advice fiduciaries who worked diligently and in good faith to comply with impartial conduct standards. Impartial conduct standards require financial institutions and investment professionals to:
- Give advice that is in the best interest of retirement investors and meet the prudence and loyalty standards.
- Charge no more than reasonable compensation and comply with federal securities laws regarding “best execution”; and
- Make no misleading statements about investment transactions and other relevant matters.
FAB No. 2021-02 extends the DOL’s non-enforcement policy through January 31, 2022. The DOL acknowledged that the earlier December 20, 2021 expiration date posed practical difficulties on financial institutions that were in the process of complying with PTE 2020-02.
The DOL also announced that they will not enforce the specific documentation and disclosure requirements under PTE 2020-02 through June 30, 2022.
Although this FAB extends the non-enforcement policy, financial institutions and investment advisors should continue their good faith compliance with PTE 2020-02.
IRS Announces 2022 Limits on Benefits and Contributions for Qualified Retirement Plans
On October 26, 2020, the IRS issued Notice 2021-61, which provides certain cost-of-living adjustments for a wide variety of tax-related items, including retirement plan contribution maximums and other limitations. Several key figures are highlighted below. These cost-of-living adjustments are effective January 1, 2022.
The elective deferral limit for employees who participate in 401(k), 403(b), most 457 plans and the federal government’s Thrift Savings Plan increases from $19,500 to $20,500 in 2022. Additionally, the catch-up contribution limit for employees age 50 and over who participate in any of these plans remains $6,500. Accordingly, participants in these plans who have reached age 50 will be able to contribute up to $27,000 in 2022.
The annual limit for Savings Incentive Match Plan for Employees (SIMPLE) retirement accounts is increased from $13,500 to $14,000.
The annual limit for defined contribution plans under Section 415(c)(1)(A) increases to $61,000 (from $58,000). The limitation on the annual benefit for a defined benefit plan under Section 415(b)(1)(A) also increases to $245,000 (from $230,000). Additionally, the annual limit on compensation that can be taken into account for allocations and accruals increases from $290,000 to $305,000.
The threshold for determining who is a highly compensated employee under Section 414(q)(1)(B) increases to $135,000 (from $130,000). The dollar limitation concerning the definition of a key employee in a top-heavy plan increases from $185,000 to $200,000.
Employers should review the notice for additional information. Sponsors of benefits with limits that are changing will need to determine whether their plan documents automatically apply the latest limits or must be amended to recognize the adjusted limits. Any applicable changes in limits should also be communicated to employees.
IRS Releases Draft 2022 Instructions for Forms 1099-R and 5498
The IRS recently released the draft 2022 Instructions for Forms 1099-R and 5498. Form 1099-R reports distributions from retirement plans, pensions, annuities and IRAs. Form 5498 reports contributions to IRAs. The instructions provide specific guidelines for completing the forms.
The IRS updates the form instructions annually to incorporate any recent administrative, reporting or regulatory changes. The 2022 Form 1099-R draft instructions include a new reporting requirement for qualified plan payments to state unclaimed property funds under escheat laws.
Employers who sponsor retirement plans may want to be aware of the draft release but should understand that changes may be made prior to the issuance of the final instructions.
Which mid-year election change requests are still impacted by the extension of certain timeframes?
Mid-year election change requests due to the exercise of HIPAA special enrollment rights (SERs) remain subject to the temporary relief provided by the extension of certain timeframes. Accordingly, certain requests that are made after the plan’s notification deadline may still need to be administered.
Generally, under IRC Section 125, elections are irrevocable for the plan year and once a participant makes an election, the participant generally may not change that election for the duration of the coverage period (usually the plan year) until the following open enrollment. There are two exceptions to this rule – HIPAA SERs, (which arise due to birth, adoption/placement for adoption, marriage, loss of eligibility for other group coverage, loss of Medicaid or CHIP and gain of eligibility for Medicaid or CHIP premium assistance program), and IRS permissible qualifying events.
In 2020, the DOL published temporary guidance allowing an extension of certain notice requirements due to the ongoing COVID-19 public health crisis, including an extension for HIPAA SERs. While generally, a HIPAA SER should be administered within plan deadlines (with HIPAA requiring a minimum of 30-days to make the enrollment request, and 60-days in the event of loss of eligibility under Medicaid or CHIP), this guidance requires that plans toll these deadlines until the earlier of one year from the date the individual is eligible for relief or 60 days following the declared end of the COVID-19 national emergency. However, only HIPAA SER requests are subject to the extension of certain timeframes; the permissible qualifying events are not.
This means that enrollment requests due to a HIPAA SER should be considered even if they are made after the timeline permitted by the plan is over. For example, an employee has a baby on 8/20/2021. The birth of a child gives rise to a HIPAA SER, and the plan normally allows 30 days from the date of birth for the employee to request mid-year enrollment. However, the 30-day deadline does not begin until the earlier of the 60 days after the end of the national emergency or 8/19/2022.
Keep in mind that HIPAA SERs are only enrollment requests. An election change request to drop coverage due to marriage would not involve a HIPAA SER, but rather an IRS permissible qualifying event that is not subject to the extension of certain timeframes.
Lastly, while the HIPAA special enrollment period allows retroactive enrollment for births (and adoption/placement for adoption), for all other special enrollment events (e.g., marriage) it only requires plans to make the enrollment effective no later than the first day of the first calendar month following notification of the event. As such, while the request may be made after the timeline permitted by the plan, it generally will be administered prospectively (other than due to birth/adoption/placement for adoption). However, if the plan document permits enrollment as of the date of the event (rather than first of the month following notification of the event), employers should discuss with counsel how the application of the extension of time would apply to the plan’s provisions. Also keep in mind that the extension of certain timeframes would not require an employee to elect and pay coverage for the baby back to the date of birth, but could be elected prospectively.
November 9, 2021
New Essential Health Services Added to State Benchmark Plan
On October 12, 2021, CMS approved the state’s proposed benchmark plan for policies beginning on or after January 1, 2023. The proposed plan added new services to the current benchmark plan, including an annual mental health wellness exam, gender-affirming care (those mental and physical health services that help align a transgender person’s body into alignment with their gender identity), and 15 new drugs that insurance companies must cover as alternatives to opioids.
Since small group plans issued in the state that cover employers with less than 100 employees must include these benefits, employers with such plans should be aware of these developments.
November 9, 2021
MA PFML 2022 Premium Rate and Maximum Benefit Amount Announced
The Department of Medical and Family Leave recently announced that the 2022 MA PFML premium contribution is 0.68% of an employee’s eligible wages, which is a decrease from the 2021 premium rate of 0.75%. The allocation of employer and employee contributions is determined based on the number of employees who work for the employer in Massachusetts. For employers with 25 or more employees in Massachusetts, the employees’ contribution share is 0.344%, and the employer contribution share is 0.336% of the total 0.68% premium. For employers with fewer than 25 employees in Massachusetts, the employees’ contribution share is 0.344% of the total 0.68% premium, and there is no required employer contribution.
The maximum benefit payment an eligible employee can receive in 2022 is $1,084.31/ week – an increase from the 2021 maximum of $850/week.
Employers with employees in Massachusetts should be mindful of these changes to the PFML program.
Health Connector Open Enrollment Period Announced
On October 15, 2021, the Division of Insurance released Bulletin 2021-14, announcing that the Massachusetts Health Connector (the state-based marketplace) open enrollment period is from November 1, 2021, through January 23, 2022, for health insurance that will become effective beginning January 1, 2022.
Although this change affects individuals who will go to the marketplace, employers should be mindful of the Health Connector’s open enrollment period. Employees going to the marketplace may have to experience a qualifying event that would allow them to terminate their coverage under the employer’s plan.
November 9, 2021
2022 Temporary Disability Insurance and Family Leave Insurance Premium Rates and Maximum Benefit Amounts Announced
The NJ Department of Labor and Workforce Development (LWD) recently announced that the 2022 Temporary Disability Insurance (TDI) employee contribution is 0.14% on the first $151,900 (wage cap) in covered wages earned during the calendar year. Accordingly, the maximum employee contribution for 2022 is $212.66/week. It is a significant rate decrease from the current rate of 0.47%. Employers are responsible for paying between $39.80 and $298.50 on the first $39,800 earned by each employee during this calendar year.
The 2022 employee contribution rate for Family Leave Insurance (FLI) is 0.14% on the first $151,900 (wage cap) in covered wages earned during the calendar year. The maximum employee contribution for 2022 FLI is $212.66 (the same as TDI). Employers are not required to contribute to the FLI program.
New Jersey employers should take note of the changes to these contributions and work with their payroll providers to institute the contributions.
NY Paid Family Leave Law Amended
Several changes to the state’s paid family leave (PFL) law were recently adopted. The first amendment clarified the amount of intermittent PFL available to employees working more than five days per week. The second change amended the definition of family member for PFL purposes to include siblings.
The PFL law was designed to provide paid job protected leave for eligible employees to care for a new child following birth, adoption or placement in the home, to care for a family member with a serious health condition, or for qualifying exigencies related to military duty. Employees are eligible for up to 12 weeks of PFL in a 52-week period at 67% of their average weekly wage, up to a maximum set by the state.
Effective January 1, 2022, the 60-day cap on intermittent leave will be removed. Under the new amendment, intermittent leave benefits will be calculated by multiplying the average number of days per week that the employee works by 12 weeks. This will enable those working more than five days per week to receive the proportionate amount of leave to which they are entitled. For example, employees who work the equivalent of six days per week will be entitled to 72 days of PFL to be used intermittently in a 52-week period. The amendment will apply to all eligible employees for leave requests made on or after January 1, 2022 (and not for claims initiated prior to this date, even if the PFL continues to be paid in 2022).
Effective January 1, 2023, the definition of family member for PFL purposes will be expanded to include biological and adopted siblings, half-siblings and step-siblings. This will allow employees to take leave to care for a sibling with a serious health condition. Currently, family members for PFL purposes include a child, parent, grandparent, grandchild, spouse and domestic partner.
Employers should review their current PFL policies and procedures and be prepared to comply with the updated requirements, once effective.
Recent PBM Law Causes Conflict Between State and Federal Law
On October 29, 2021, Commissioner Mulready issued Bulletin No. LH 2021-05. This bulletin, sent to all health insurance companies and other interested parties, warns of a potential conflict between state and federal law when calculating enrollee total contributions to an out-of-pocket maximum, deductible, copayment, coinsurance or other cost-sharing arrangement.
The state recently passed HB 2678, effective November 1, 2021, which amended state insurance law to make it an unfair claim settlement practice for a pharmacy benefits manager (PBM) or an insurer that provides pharmacy benefits to fail to include any amount paid by an enrollee or on behalf of an enrollee by another person when making such calculations. The bulletin notes that when an enrollee is enrolled in an HDHP connected to an HSA, any third-party payments, such as discounts, vouchers, financial assistance, or other out-of-pocket reduction payments, paid toward enrollee out-of-pocket expenses (with exceptions for contributions made toward preventative care and cost-sharing occurring after the deductible is reached) will make that enrollee’s contribution ineligible toward their HSA.
The bulletin states that the department is working with lawmakers to reconcile this conflict. In the meantime, insurers and PBMs are encouraged to include all third-party payments in their calculations and to comply with federal law as well. In addition, carriers are encouraged to promptly contact members enrolled in an HDHP with an associated HSA and clearly communicate the effects of applying funds from third parties and their HSA when making payments for prescriptions, since the tax consequences of ineligible HSA payments can be severe for enrollees.
First Payment of New Insurance Surcharge on both Insured and Self-insured Plans Due November 15, 2021
Washington state recently passed legislation requiring health insurers for fully-insured plans and plan sponsors (employers) for self-insured plans to file a quarterly report and remit an assessment by November 15, 2021. The initial assessment amount is $0.13 per covered life based on the number of enrollees who are Washington state residents in the months of July, August, and September 2021. Subsequently, the new rate is scheduled to be set annually prior to the end of October.
The purpose of the assessment is to fund the new state program called the Washington Partnership Access Lines funding program (WAPAL Fund), which provides funding for certain psychiatry and behavioral sciences consultation and referral lines programs overseen by the Washington State Health Care Authority (HCA).
Self-insured plan sponsors who have Washington residents in the plans must register themselves on the state’s assessment system site by entering their Federal EIN and the company’s representative’s email address and submitting a covered lives report on the same site. The assessment can be submitted via mail to the PO Box on the remittance form or via ACH transaction. The detailed payment information will appear after the covered lives reporting is submitted successfully.
The WAPAL Fund site provides helpful training materials that outline how to register and complete a covered lives report on their site. Those resources can be found here.
After the first deadline on November 15, 2021, the applicable self-insured employers and other responsible payers need to log in to the WAPAL Fund system at the end of every calendar quarter to file a covered lives report and receive an invoice for the quarterly assessment due. These assessments are due 45 days after the end of every quarter. Specifically, payments are due November 15, February 15, May 15, and August 15 for the quarters ending September 30, December 31, March 31, and June 30, respectively.
Paid Family and Medical Leave 2022 Premium Rate Announced
The WA PFML 2022 premium rate will increase for the first time since the program was first launched. The new premium rate in 2022 will be 0.6% of employees’ gross wages up to the 2022 Social Security cap ($147,000) effective on January 1, 2022, which is an increase from the current rate of 0.4% of employees’ gross wages.
The total contribution of 0.6% is split between employers and employees depending on the size of an employer. Employers with 50+ employees will contribute up to 26.78% of 0.6%, and their Washington state employees will pay 73.22% of 0.6%. Employers with fewer than 50 employees are not required to contribute, but they must withhold from their Washington state employees’ share of 73.22% of 0.6% from their payroll.
The increase in rate is due to higher usage and reduced payrolls during the pandemic, according to the WA Employment Security Department, which administers the WA PFML program.
Reminder: State LTC program Premium Collection and Wage Reporting Due Soon and Employee Exemption Deadline Extended
As a reminder, beginning January 1, 2022, employers are required to report their Washington employees’ wages and hours and collect the premiums from employees’ wages for their new state’s long-term care (LTC) program, called WA Cares Fund. Employers are not required to contribute to this program. (WA Cares Fund was discussed in a June 10, 2021 article in Compliance Corner, which can be found here.)
The WA Cares Fund premium for 2022 is 0.58% of an employee’s gross wages without a maximum limit. The long-term care benefits under WA Cares Fund will be available to eligible employees starting in 2025.
Once the state’s reporting system is updated, the covered employers can report for both WA Cares Fund and WA PFML programs at the same time on the site.
Employees may apply for an exemption from the program if they have private long-term care insurance in place and have completed their application for an exemption from WA Cares before on or before December 1, 2021. (This is an extension from the previous November 1, 2021, deadline to apply for an exemption.) If the exemption is approved, the employees are required to notify their employer and provide them with a copy of their approval letter from the Employment Security Department (ESD). Once an employer receives the approved letter from employees, they are required not to withhold WA Cares premiums from those employees; and retain a copy of their employees’ approval letters on file.
This material was created by PPI Benefit Solutions to provide accurate and reliable information on the subjects covered but should not be regarded as a complete analysis of these subjects. It is not intended to provide specific legal, tax or other professional advice. The service of an appropriate professional should be sought regarding your individual situation. PPI does not offer tax or legal advice. "PPI®" is a service mark of Professional Pensions, Inc., a subsidiary of NFP Corp. (NFP). All rights reserved.
Industry news topics covered in the Compliance Corner are chosen based on general interest to most employers and may include articles about services not available through PPI.
Which mid-year election change requests are still impacted by the extension of certain timeframes?