Legislative Updates

The IRS announced that employer-sponsored health coverage will satisfy the Affordable Care Act (ACA) affordability requirement next year if the lowest-cost, self-only coverage option an employer offers does not exceed 9.61 percent of an employee's income.

The threshold in 2021 was 9.83 percent. It had risen from 9.78 percent in 2020.

The IRS annually adjusts the affordability threshold by considering the ratio of premium growth to income growth in the preceding calendar year. Because premiums for employer-sponsored health coverage increased at a lower rate than national income growth during 2021, due largely to a drop-off in the use of nonemergency health care services as cases of COVID-19 surged, the 2022 affordability percentage dropped below the 2021 level.

The agency announced the 2022 affordability threshold—also known as the shared-responsibility affordability percentage or cost-sharing limit—on Aug. 30 in Revenue Procedure 2021-36.

U.S. Immigration and Customs Enforcement (ICE) announced an extension of the flexibilities in rules related to Form I-9 compliance that was initially granted last year. Due to the continued precautions related to COVID-19, the Department of Homeland Security (DHS) will extend this policy until Dec. 31, 2021.

This extension will continue to apply the guidance previously issued for employees hired on or after April 1, 2021, and work exclusively in a remote setting due to COVID-19-related precautions. Those employees are temporarily exempt from the physical inspection requirements associated with the Employment Eligibility Verification (Form I-9) until they undertake non-remote employment on a regular, consistent, or predictable basis, or the extension of the flexibilities related to such requirements is terminated, whichever is earlier.

Covered employers now have until Oct. 25 to file their 2019 and 2020 EEO-1 reports, according to a recent announcement from the U.S. Equal Employment Opportunity Commission (EEOC). Although the reporting deadline has been delayed several times during the COVID-19 pandemic, the agency said it will not authorize any more extensions.

On July 29, the Treasury Department and the IRS posted the new guidance on the paid-leave tax in updated FAQs on the IRS website. The new guidance "gives employers further opportunity to support the health and safety of their employees' families and communities without placing an undue burden on their business during the pandemic," according to a Treasury Department announcement.

The updates clarify that eligible employers can claim the tax credits for providing leave to employees:

• To accompany a family or household member or certain other individuals to obtain immunization relating to COVID-19.

• To care for a family or household member or certain other individuals recovering from the immunization.

Who are these "family or household member or certain other individuals"? 

• An immediate family member.
  

• Someone who regularly resides in the employee's home.
  

• A similar person with whom the employee has a relationship that creates an expectation that the employee would care for the person.

The FAQs also include information on how eligible employers may claim the paid sick and family leave credits, including how to file for and compute the applicable credit amounts and how to receive advance payments for and refunds of the credits.

On Dec. 27, 2020, the No Surprises Act was signed into law as part of the Consolidated Appropriations Act of 2021 (H.R. 133; Division BB – Private Health Insurance and Public Health Provisions). The No Surprises Act addresses surprise medical billing at the federal level. Most sections of the legislation go into effect on Jan. 1, 2022, and the Departments of Health and Human Services, Treasury, and Labor are tasked with issuing regulations and guidance to implement a number of the provisions. 

A detailed summary of the Act is available here. 

The interim rule is available here. 

The SECURE passed in 2020 requires sponsors of 401(k) and similar plans must annually disclose to plan participants an estimate of the monthly amount that their account balance would pay in the form of:

• A life annuity with equal payments over the participant's lifetime.
  

• A qualified joint and 100 percent survivor annuity with equal payments over the joint lives of the participants and a spouse.

The participant-disclosure requirement takes effect on Sept. 18, 2021, and applies to retirement plan statements sent to participants (typically on a quarterly basis) after that date.

The disclosure is intended to help employees determine their readiness to retire. It also is expected to encourage employees to consider annuitization of their retirement assets, meaning using some or all of their 401(k) funds to purchase a lifetime annuity. A lifetime income annuity is a contract with an insurance company that allows purchasers to convert a portion of their retirement savings into a predictable lifetime income stream.

Read Temporary Implementing FAQs from the DOL here. 

The U.S. Department of Labor (DOL) has rescinded a final rule issued under the Trump administration that narrowed the definition of a joint employer under the Fair Labor Standards Act (FLSA). The rescission makes it more likely that an employer will be determined to be a joint employer and thus liable under the FLSA for another employer's actions. This will most significantly impact franchise brands such as McDonalds Corporation. 

As part of the Omnibus Jobs and Economic Growth Finance and Policy Bill, Minnesota Gov. Tim Walz has approved an amendment relating to pregnancy accommodations and barring reducing compensation for lactation breaks, among other changes. The amendment goes into effect on Jan. 1, 2022. Read more here.

The Equal Employment Opportunity Commission (EEOC) has extended the deadline for filing the EEO-1 form from July 19 to Aug. 23.

Businesses with 100 or more employees and some federal contractors with at least 50 employees must submit an annual EEO-1 form, which asks for information from the previous year about the number of employees who worked for the business, sorted by job category, race, ethnicity and gender.

The EEOC did not collect such data in 2020 due to the coronavirus crisis. Covered employers now have until the new deadline to submit both their 2019 and 2020 data.

On June 23, the U.S. House of Representatives passed the Protecting Older Workers Against Discrimination Act (POWADA)—that would make it easier for people to win claims of age discrimination by easing the standards of proof. If also passed by the Senate and signed into law, the measure would undo a 2009 U.S. Supreme Court decision that made age-discrimination claims more difficult to prove.