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What is 401(K) Benchmarking and Why Should You Do It?

Simply stated, benchmarking is the process of reviewing and evaluating your company retirement plan. It involves taking a look at what you are offering your employees today and deciding if it’s appropriate or needs some updating. There are four main areas to focus on when assessing your retirement plan: Plan Design Service Providers Funds Fees Each aspect of your plan requires a slightly different set of questions and documented responses. To go into detail about each section, we will break this into a two-part series, beginning with Plan Design and Service Providers; but don’t worry, we will discuss Funds and Fees...

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IRS Updates Per Diem Rates

The IRS has updated the rules for using per diem rates to substantiate the amount of business expenses paid or incurred while traveling away from home. The full notice from the IRS can be viewed here. Highlights include the following: $66 for any travel locality within the continental United States and $71 for any travel locale outside the continental U.S. for special meal and incidental expenses rates for taxpayers in the transportation industry. $5 per day for any locality of travel within or outside the U.S. for the incidental expenses only deduction For purposes of the high-low substantiation method, the per...

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Payroll Tax Deferral Guidance

President Trump issued an executive order on August 8, 2020 allowing employers to defer employee’s social security taxes for certain employees for the period beginning September 1, 2020 through December 31, 2020. The Department of Treasury and the Internal Revenue Service issued Notice 2020-65 providing additional guidance on August 28, 2020. The executive order defers the employer’s obligation to withhold, deposit and pay the 6.2% Social Security tax for employees. It applies to employees who “generally” make less than $4,000 bi-weekly, calculated on a pre-tax basis, which equates to $104,000 annually. Any deferred Social Security taxes would then be collected from the...

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MLR Rebates Must Be Paid By Sept 30, 2020

The ACA requires health insurers to spend a minimum percentage of their premium dollars, or MLR, on medical care and health care quality improvement.  Issuers that do not meet these minimum requirements must provide rebates to consumers. This percentage is: 85% for issuers in the large group market; and 80% for issuers in the small and individual group markets Effective dates: MLR data was due to HHS by July 31 for the 2019 reporting year. Rebates for 2019 must be provided by September 30, 2020. A full discussion of MLR Rebates can be found here....

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OPEN ENROLLMENT 2020: SIMA’s plans for a safe & seamless open enrollment period for our clients

2020 has certainly presented more than its share of challenges. Here at SIMA, with gratitude to our dedicated employees and exceptional technology team, we haven’t missed a beat. But, things do look a little different and will continue to do so for some time. And that includes during your company’s open enrollment period. Here's how SIMA will manage Open Enrollment 2020: Enrollment meetings, presentations and employee education will take place online. We are confident that SIMA’s electronic open enrollment system will make this change to a virtual format a seamless one. SIMA is equipped with an electronic benefits administration system that provides online access...

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Court Upholds Expansion of Short-term, Limited-duration Insurance

2018 Final Rule Allows Policies Lasting up to 12 Months On July 17, 2020, a federal appeals court upheld a 2018 final rule expanding short-term, limited-duration insurance (STLDI) for purposes of the Affordable Care Act (ACA). The final rule: Provides a maximum coverage period for STLDI of up to 12 months; and Allows STLDI to continue for up to 36 months in total, taking into account renewals or extensions. The plaintiffs in this case argued that extending the duration of STLDI is inconsistent with HIPAA’s plain text and an unreasonable interpretation in light of the ACA’s structure and purpose. However, the Court of Appeals...

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ACA Affordability Contribution Rate Set at 9.83% for 2021

New Figure Marks Slight Increase from 2020 Under the Affordable Care Act’s employer shared responsibility (pay or play) rules, applicable large employers—generally those who have 50 or more full-time employees (including full-time equivalent employees)—may be subject to a penalty if they do not offer affordable health insurance coverage that provides minimum value to their full-time employees and their dependents. For plan years beginning in 2021, the Internal Revenue Service has announced that coverage will generally be considered affordable if the employee's required contribution for the lowest-cost self-only health plan offered is 9.83% or less of his or her household income for the taxable year....

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Trump Signs Executive Orders to Lower Drug Prices

Series of Four Executive Orders Issued On July 24, 2020, President Donald Trump issued the following series of executive orders in an effort to lower drug prices: Executive Order on Lowering Prices for Patients by Eliminating Kickbacks to Middlemen: directs federally qualified health centers to pass along massive discounts on insulin and epinephrine received from drug companies to certain low-income Americans. Executive Order on Increasing Drug Importation to Lower Prices for American Patients: intended to allow state plans for safe importation of certain drugs, authorize the re-importation of insulin products made in the United States, and create a pathway for widespread...

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ACA Pay or Play Penalties Increase in 2021

The Adjusted Penalty Amounts for 2021 are $2,700 and $4,060 Under the Affordable Care Act’s employer shared responsibility (pay or play) rules, applicable large employers—generally those who have 50 or more full-time employees (including full-time equivalent employees)—may be subject to a penalty if they do not offer affordable coverage that provides minimum value to their full-time employees and their dependent children. Two separate penalties can apply under the employer shared responsibility rules—the Section 4980H(a) penalty and the Section 4980H(b) penalty. The Section 4980H(a) penalty can apply when an ALE does not offer coverage to “substantially all” full-time employees (and dependents). The annual...

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EMPLOYER RESOURCE: 8 Tips for a Successful Open Enrollment During COVID-19

The coronavirus (COVID-19) pandemic has highlighted the importance of health care benefits. Its impact has led to many elective procedures being delayed, and 2021 may look different than previous years. Given the impact of the coronavirus pandemic, many enrollees are increasingly conscious of having appropriate health care coverage. The effects of the pandemic have also impacted open enrollment this year—with many employees feeling confused, anxious or stressed about making the right choices. Generally, many employees complete open enrollment rather quickly—but with the added pressures this year, employees are encouraged to spend the time needed to make enrollment choices confidently.  8 Tips...

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