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Seyfarth Synopsis: The IRS has announced an increase to the applicable dollar amount for determining the Patient-Centered Outcomes Research Institute (“PCORI”) Fee for 2023 as well as other health and welfare limits.

The Affordable Care Act (ACA) established the PCORI to support research on clinical effectiveness. The PCORI is funded in part by fees paid by certain health insurers and sponsors of self-insured health plans (referred to as “PCORI fees”). The PCORI fee is determined by multiplying the average number of covered lives for the plan year times the applicable dollar amount, and is paid annually to the IRS using Form 720. The applicable dollar amount as set by the IRS for plan years ending on or after October 1, 2021 and before October 1, 2022 was $2.79 per enrollee.

The IRS has issued Notice 2022-59 announcing that the applicable dollar amount that must be used to calculate the fee for plan years that end on or after October 1, 2022 and before October 1, 2023. The 2023 PCORI fee is $3.00 per enrollee, an increase of $0.21 per enrollee from 2022. The $3.00 PCORI fee is due July 31, 2023 for 2022 calendar year plans.

For more information on paying the PCORI fee, see our prior posts here and here, and the IRS website here.

Additionally, the IRS previously announced other 2023 cost-of-living adjustments for employer-sponsored health and welfare plans. The changes in the 2023 cost-of-living adjustments for employer-sponsored health and welfare plans are summarized in the table below:

Health and Welfare Program Limits
(Rev. Proc. 2022-24 & Rev. Proc. 2022-38)		20222023Change
Qualified Transportation Fringe Benefit and Qualified Parking (Monthly Limit)$280$300+$20
Health Flexible Spending Account (Health FSA) Maximum Salary Reduction Limit$2,850$3,050+$200
Health FSA Carryover Limit$570$610+$40
Maximum Amount Excluded from Employee’s Gross Income for the Adoption of a Child with Special Needs Through an Adoption Assistance Program (AAP)$14,890$15,950+$1,060
Maximum Amount Excluded from an Employee’s Gross Income for Amounts Paid by an Employer for Qualified Adoption Expenses Through an AAP*$14,890$15,950+$1,060
Health Savings Account (HSA) Annual Contribution Limit
• Self-only Coverage
• Family Coverage


$3,650
$7,300


$3,850
$7,750


+$200
+$450
HSA Catch-up Contribution Limit**$1,000$1,000No change
Dependent Care Flexible Spending Account (Dependent Care FSA)*** Annual Contribution Limit for Employee’s Who Are Married and Filing a Joint Return or if the Employee Is a Single Parent$5,000$5,000No change
Dependent Care FSA Annual Contribution Limit if Employee Is Married But Filing Separately$2,500$2,500No change
High Deductible Health Plan (HDHP) Minimum Annual Deductible
• Self-only Coverage
• Family Coverage



$1,400
$2,800



$1,500
$3,000



+$100
+$200
HDHP Maximum Annual Out-of-pocket Limit (Deductibles, Co-payments and Other Amounts, but not Premiums)
• Self-only Coverage
• Family Coverage





$7,050
$14,100





$7,500
$15,000





+$450
+$900
Maximum Amount that May Be Made Newly Available for an Excepted-Benefit Health Reimbursement Arrangements (EBHRA)$1,800$1,950+$150

* The amount excludable from an employee’s gross income for amounts paid by an employer for qualified adoption expenses through an AAP begins to phase out in 2023 for taxpayers with modified adjusted gross income in excess of $239,230 and is completely phased out in 2023 for taxpayers with modified adjusted gross income of $279,230 or more.

** The HSA Catch-up Contribution limit is set by statute.

***Dependent FSA limits are set by statute and do not adjust for inflation, but the Dependent FSA limits were temporarily increased for 2021 only by the American Rescue Plan Act of 2021 due to the COVID-19 pandemic.

Please contact the employee benefits attorney at Seyfarth Shaw LLP with whom you usually work if you have any questions regarding the PCORI fee or the 2023 limits on health and welfare plans.

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Seyfarth Synopsis: IRS quietly extends relief for the “family glitch” to calendar year cafeteria plans in unannounced revisions to Notice 2022-41.

In our October Legal Update (available here), we described the publication of final IRS rules fixing the so-called “family glitch” in the availability of a premium tax credit for Health Insurance Exchange (Exchange) coverage. We also described the companion IRS Notice 2022-41, which allows cafeteria plans to permit participants to drop medical coverage for those covered family members who enrolled in a Qualified Health Plan (QHP) on the Exchange (either during an annual enrollment period or during a special enrollment period for Exchange coverage) on or after January 1, 2023.

At the time of publication of that Legal Update, the additional flexibility permitted by Notice 2022-41, by its plain terms, was available only to non-calendar year cafeteria plans. However, as we noted in the Update:

[In] multiple informal communications with the IRS, it appears that the IRS intended to extend the flexibility provided in Notice 2022-41 to calendar year plans. However, in light of the clear language in the “Guidance” section of the notice, we currently are unable to provide assurance that this election change opportunity may be adopted for a calendar year plan. Thus, published clarification from the IRS on this point would be welcomed.

In revisiting Notice 2022-41 (on November 9), it appears that the limitation on the applicability of this Guidance to only “non-calendar year” cafeteria plans has been removed, so that this additional permitted election change event may now be adopted for any cafeteria plan, even calendar year cafeteria plans. This is a welcome (albeit a quiet) expansion of the guidance!

If you would like to discuss adopting this new election change flexibility for your cafeteria plan, please contact one of our Employee Benefit attorneys directly. As noted in our Legal Update, there is additional time to formally amend your cafeteria plan, but if this optional new election change opportunity is adopted, participants should be informed of the change and the cafeteria plan should be in operational compliance as of the amendment’s effective date.

Coffee Talk SG

In December 2019, The Setting Every Community Up for Retirement Enhancement Act (SECURE Act) was enacted and signed into law. The Act was the most significant piece of legislation impacting employee benefit plans since the Pension Protection Act in 2006, and includes a plethora of changes to the laws governing employer-sponsored retirement plans, specifically impacting defined contribution and defined benefit plans, IRAs, 529 plans and governmental plans. And then the pandemic hit. So while the SECURE Act has been in place for over two years, many employers are still grappling with what adjustments they need to make. How has the SECURE Act impacted post-death required minimum distributions? How has it impacted long-term part-time employees and their participation in defined contribution plans? Grab your cup of coffee and tune in to hear Richard and Sarah chat with Seyfarth’s Irine Sorser about these pressing questions and more!

Click here to listen to the full episode.

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Seyfarth Synopsis: The IRS just announced the 2023 annual limits that will apply to tax-qualified retirement plans. For a second year in a row, the IRS increased the annual limits, allowing participants to save even more in 2023. Employers maintaining tax-qualified retirement plans will need to make sure their plans’ administrative procedures are adjusted accordingly.

In Notice 2022-55, the IRS announced the various limits that apply to tax-qualified retirement plans in 2023. The “regular” contribution limit for employees who participate in 401(k), 403(b) and most 457 plans will increase from $20,500 to $22,500 in 2023. The “catch-up” contribution limit for individuals who are or will be age 50 by the end of 2023 will increase from $6,500 to $7,500 in 2023. Therefore, if participants are or will be age 50 by the end of 2023, participants may be eligible to contribute up to $30,000 to their 401(k) or 403(b) plan in 2023.

The maximum amount that may be contributed to a defined contribution plan will increase from $61,000 to $66,000 in 2023. Additionally, the maximum annual compensation that may be taken into account under a plan will increase from $305,000 to $330,000 for 2023. For individuals investing in individual retirement accounts (IRAs), the annual contribution limit will increase from $6,000 to $6,500 for 2023 (for those who are catch-up eligible, this limit will increase from $7,000 to $7,500 for 2023).

The Notice also includes several other notable retirement-related limitation changes for 2023, including the dollar limitation on the annual benefit under a defined benefit plan, which increases from $245,000 to $265,000; the dollar limit used to determine a highly compensated employee, which increases from $135,000 to $150,000; and the dollar limit used when defining a key employee in a top-heavy plan, which increases from $200,000 to $215,000.

Individuals should check their plan contribution elections and consult with their personal tax advisor before the end of 2022 to make sure that they take full advantage of the contribution limits in 2023. Given the numerous changes, employers who sponsor a tax-qualified retirement plan should consider any necessary adjustments to plan administrative procedures and update their participant notices to ensure proper administration of the plan in 2023.

Employers who sponsor defined benefit pension plans (e.g., cash balance plans) should review the new limits in the IRS Notice and make any necessary adjustments to plan administrative/operational procedures.

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Seyfarth Synopsis: HHS has announced that the COVID-19 Public Health Emergency (PHE) has been extended another 90 days, and will run until January 11, 2023.

In response to the COVID-19 pandemic, two separate emergency declarations have been in effect: (1) the COVID-19 PHE and (2) the COVID-19 National Emergency. These emergency declarations provide different types of COVID-related relief for participants and group health plans. While the COVID-19 pandemic is winding down, these emergency declarations and their related relief remain in effect.

The COVID-19 Public Health Emergency

HHS first declared the COVID-19 PHE in January 2020. The COVID-19 PHE declarations last for 90 days unless an extension is granted. Since January 2020, the COVID-19 PHE has been renewed every 90 days.

HHS recently extended the COVID-19 PHE an additional 90 days. This means that the COVID-19 PHE will run until January 11, 2023, unless another extension is granted.

Accordingly, the COVID-19 PHE will permit the following COVID-related relief to continue into 2023:

  • COVID-19 Testing: in-network and out-of-network COVID-19 testing are at no cost to participants.
  • COVID-19 Vaccines: in-network COVID-19 vaccines are at no cost indefinitely, but after the end of the COVID-19 PHE, plans may impose cost-sharing for non-network administration.
  • Expanded Telehealth Coverage: telehealth coverage is permitted to be offered to employees whether or not the employee is enrolled in the employer’s medical plan.
  • SBC Advanced Notice Requirements: the SBC advanced notice requirements for mid-year changes are relaxed when necessary to implement COVID-19 coverages/benefits.

The Biden Administration has advised that it will provide at least 60 days’ advanced notice prior to allowing the PHE to expire, so unless the Administration provides such notice before mid-November, it is reasonable to assume the PHE will be extended again.

The COVID-19 National Emergency

Unlike the COVID-19 PHE, the COVID-19 National Emergency is declared by the President and the declarations last for one-year unless an extension is granted. On March 13, 2020, the COVID-19 National Emergency was announced, and it has been extended every year since. Currently, the COVID-19 National Emergency is set to expire on March 1, 2023.

The COVID-19 National Emergency gave rise to the “Outbreak Period” in which certain deadlines were extended to provide relief from COVID-19. The COVID-19 National Emergency will permit the Outbreak Period to continue into 2023, which will permit the following deadlines to be extended until the earlier of (a) one year after the deadline, or (b) 60 days after the end of the Outbreak Period:

  • COBRA election deadline
  • COBRA premium payment deadline
  • HIPAA special enrollment deadline
  • ERISA claims filing deadline
  • Fiduciary relief for delayed provision of notices

Keep in mind, the deadlines applicable to the Outbreak Period are determined on an individual by individual basis and cannot last more than one year from the date the individual or plan was first eligible for relief. For more information regarding the COVID-19 National Emergency and Outbreak Period, see our prior Legal Updates here and here.

Please contact the employee benefits attorney at Seyfarth Shaw LLP with whom you usually work if you have any questions regarding the COVID-19 PHE or COVID-19 National Emergency.

Coffee Talk SG

With interest rates on the rise, defined benefit pension plan sponsors and participants alike may be wondering how their pension plans and pension benefits are impacted. Rising interest rates lower lump sum values, which begs the question of who is impacted; the plan sponsor, the plan participant, or both? Do rising interest rates create any compliance issues? Does a pension plan sponsor have a legal obligation to explain to participants what rising interest rates will do? Grab your cup of coffee and tune in to hear Richard and Sarah chat with Seyfarth Partner Adam Greetis about these pressing questions and more!

Click here to listen to the full episode.

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Seyfarth Synopsys: On September 26, 2022, the IRS issued Notice 2022-45, extending the deadline for amending retirement plans and individual retirement accounts (“IRAs”) for optional changes under the CARES Act.

As we discussed in our prior blog post [here], on August 3, 2022. the IRS issued Notice 2022-33, extending the deadlines for amending retirement plans, 403(b) plans and individual retirement accounts (“IRAs”) for changes under the (i) Setting Every Community Up For Retirement Enhancement Act of 2019 (the “SECURE Act”); (ii) Bipartisan American Miners Act of 2019 (the “Miners Act”); and (iii) Section 2203 of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). For most plans, the extension provided plan sponsors with an additional three years, until December 31, 2025, to amend plan documents to reflect most of the changes under these Acts.

Notably, the prior guidance did not extend the due date for optional CARES Act amendments, such as penalty-free coronavirus-related distributions, increased permissible loan amounts, and delayed repayment of loans. The deadline for those changes remained generally December 31, 2022.

Happily, on September 26, 2022, the IRS issued Notice 2022-45. The Notice extends the due date for optional CARES Act amendments to December 31, 2025 for nongovernmental qualified retirement plans and IRAs (including 401(k) plans and 403(b) plans not maintained by public schools). In addition, the Notice extends the amendment deadline for such plans for qualified disaster distribution provisions under the Taxpayer Certainty and Disaster Tax Relief Act (“Relief Act”) to December 31, 2025. The upshot to the Notice is that for these plans, all SECURE, Miners, CARES and Relief Act amendments can be adopted at the same time.

The Notice similarly extended the due date for optional CARES Act and Relief Act amendments for qualified governmental retirement plans, public school 403(b) plans and governmental 457(b) plans. The due date for these amendments is now generally the 90th day after the close of the of the third regular legislative session of the legislative body with the authority to amend the plan that begins after December 31, 2023, which conforms to the due date previously announced for the other provisions of the Acts.

Tax exempt employers that sponsor 457(b) plans did not receive an extension to adopt SECURE Act amendments. These amendments include changes to required beginning dates and required minimum distributions. The due date for these amendments remains December 31, 2022.

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On June 24, 2022, the Supreme Court issued its decision in Dobbs v. Jackson Women’s Health, overturning Roe v. Wade, abolishing the federal standard protecting the right to abortion. In the immediate aftermath of Dobbs, many states have raced to pass more restrictive laws against abortions, including some near-total bans. Several states had enacted “trigger bans” that would take effect automatically if the Supreme Court reached this result. Others have sought to reinstate pre-existing laws that had been unenforceable on constitutional grounds. In many states, however, Dobbs will not affect access to abortion because legislatures, courts, or voters have embedded this right in state codes or constitutional provisions.

Seyfarth is pleased to deliver a 50-State Survey of Reproductive Health Services on SeyfarthLean Consulting’s Survey Center. This state-by-state analysis allows tracks state laws and actions with a focus on employer considerations, such as which states criminalize aiding and abetting abortion services, and which states serve as “safe havens” for employers.

To request access to the Reproductive Health Services Tracker, click here.

Please contact a member of the Reproductive Health Law Advisory Team with questions. The situation remains fluid in many states, and the survey will be updated accordingly.

If you are a Seyfarth client with multi-state operations and are interested in password-protected access to other Survey Center employment law topics (non-public but available without charge to our clients), please reach out to your Seyfarth attorney for more information.

Termination of employment is a distribution event under many retirement plans, and particularly under individual account defined contribution plans. But what does it mean to terminate employment? Is there such a thing as a “sham” termination? It’s an important question for plans sponsors to consider before distributing a retirement benefit following the plan participant’s departure, as a distribution attributable to a termination that is not bona fide could be considered a plan disqualification defect, putting the plan’s tax-qualified status at risk. So how does a plan sponsor determine whether there was a “termination of employment” that constitutes a true distribution event? Does the possibility of being rehired put a distribution made on account of a prior termination of employment from that employer at risk? Grab your cup of coffee and tune in to hear Richard and Sarah chat with Seyfarth Partner Christina Cerasale about these pressing questions and more!

Click here to listen to the full episode.

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Seyfarth Synopsis: To promote healthier lifestyles in an effort to ultimately reduce the cost of health care in the United States, the Affordable Care Act (ACA) requires private health plans to provide first dollar coverage for evidence-based preventive care. As a result, such things as immunizations and cancer screenings must be covered without the requirement to pay a co-pay or meet a deductible. A recent decision by a federal district court in Texas allows employer plan sponsors to exclude coverage for certain preventive treatments to which they objected.

One of the results of this ACA preventive care requirement was to empower the Federal Government to deem certain medical treatments as being effective preventive care and thus necessary for coverage by group health plans. In Braidwood Management Inc v Becerra, 4:20-cv-00283 (N.D. TX), a Court found that an employer who objected to a certain preventive treatment on religious grounds could be exempted from offering that otherwise mandated treatment.

Specifically, in this matter the Court held that the professed Christian beliefs of a for-profit employer exempted it from providing PrEP, a medication that lowers the risk of HIV transmission by over 99%, despite coverage of PrEP being mandated as an effective preventive treatment under the Affordable Care Act. In reaching this holding, the Court noted that the employer objected to covering PrEP as:

[H]e believes that (1) the Bible is “the authoritative and inerrant word of God,” (2) the “Bible condemns sexual activity outside marriage between one man and one woman, including homosexual conduct,” (3) providing coverage of PrEP drugs “facilitates and encourages homosexual behavior, intravenous drug use, and sexual activity outside of marriage between one man and one woman,” and (4) providing coverage of PrEP drugs in Braidwood’s self-insured plan would make him complicit in those behaviors.

The Government argued that the employer put forth no evidence that PrEP increased any of the activities to which it objected. The Court found that argument irrelevant, since the employer believed that PrEP had this impact. The Court also acknowledged that despite this religious objection, the Government had a compelling interest in mandating that benefit plans offer PrEP. However, the Court nevertheless found this compelling interest insufficient to trump the employer’s religious beliefs because the government did not prove how exempting religious for-profit employers from the mandate would impact the compelling interest of slowing/stopping HIV transmission. The Court further noted that the Government could simply solve the issue by paying for PrEP for individuals covered by a health program that did not cover PrEP.

This ruling is significant in that it shows the increasing tension in jurisprudence between public health of employees and society-at-large on the one hand and the religious rights of private employers on the other. Importantly, this line of case law could also raise tension under Title VII as Courts thread the permissibility of an employer’s religious belief to oppose homosexual behavior and its legal mandate not to discriminate against homosexual employees.

The impact of this ruling is not limited to PrEP. Rather, this ruling provides fertile ammunition for employers to argue that their religious beliefs justify their exemption from a whole host of otherwise required medical treatments, including birth control and Plan-B. Stay tuned as we continue to track legislation and court rulings that impact access to health care coverage.