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Seyfarth Synopsis: On August 19, 2024, the IRS issued Notice 2024-63 (the “Notice”) providing guidance for plan sponsors that wish to provide matching contributions based on eligible student loan repayments made by participants, rather than based only on elective deferrals, pursuant to the SECURE 2.0 Act of 2022. This post summarizes guidance under the Notice. 

Section 110 of the SECURE 2.0 Act of 2022 codified rules that permitted plan sponsors to make a matching contribution to a 401(k), 403(b), SIMPLE or governmental 457(b) plan based on a participant’s “qualified student loan payment,” in addition to matching contributions on a participant’s elective deferral contribution to the plan. These rules already took effect this year, and the IRS has now issued welcome guidance on how this provision should be implemented.Continue Reading Major SECURE 2.0 Guidance Issued: Extra Credit for Repaying Qualified Student Loans

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Seyfarth Synopsis: The IRS has announced increases to key limits for certain health and welfare benefit programs, including HSA contributions for 2025.

The IRS recently released 2025 cost-of-living adjustments applicable to dollar limitations for certain employer-sponsored health and welfare plans in Rev. Proc. 2024-25.

The changes in the 2025 cost-of-living adjustments for employer-sponsored health…

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Seyfarth Synopsis: The agencies have finalized a portion of their proposed rules impacting so-called “junk insurance” regarding short-term limited-duration insurance, but deferred finalizing the more significant changes that would have impacted most fixed indemnity policies. 

In early April 2024, the Treasury Department, Department of Labor, and Health and Human Services (the “agencies”) issued final rules regarding short-term limited-duration insurance (STLDI). Avid readers of this blog may recall our earlier post on the proposed rules, found here, which impacted STLDI as well as other issues surrounding excepted benefits. The new final rules primarily address the STLDI portion of the proposed rules, and generally adopt them as proposed. Aside from a new notice requirement, the agencies delayed finalizing the rules on fixed indemnity insurance, but warned that the delay should not be an endorsement of the abusive practices that have emerged in this space.Continue Reading Agencies Defer Final Action on Junk Insurance, While Suggesting Caution Against One Last “Binge”

Seyfarth Synopsis: Adding to the holiday joy of employee benefits practitioners nationwide, yesterday the IRS issued guidance on several outstanding questions related to SECURE 2.0. At this time of year, we are especially thankful that the guidance was issued on a day other than the day before or following a national holiday.

The so-called “grab…

Coffee Talk SG

On November 24, 2023, the IRS issued highly anticipated proposed regulations concerning the provisions under SECURE and SECURE 2.0, requiring 401(k) plans to expand deferral eligibility for long-term part-time employees. The proposed rules answer a number of burning questions that have been lingering since 2019 when SECURE was first enacted. In this special episode, Seyfarth…

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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 2024 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 (through the Patient-Centered Outcomes Research…

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True to form, the IRS released long-awaited proposed regulations during a long holiday weekend. This time they are narrowly focused on the eligibility rules for Long-Term Part-Time employees first introduced under the SECURE Act, and then expanded by SECURE 2.0. But, they did not disappoint, and are chock full of useful and detailed information on…

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Seyfarth Synopsis: The IRS just announced the 2024 annual limits that will apply to tax-qualified retirement plans. For a third year in a row, the IRS increased the annual limits, allowing participants to save even more in 2024. Employers maintaining tax-qualified retirement plans will need to make sure their plans’ administrative procedures are adjusted accordingly.

In Notice 2023-75, the IRS announced the various limits that apply to tax-qualified retirement plans in 2024. The “regular” contribution limit for employees who participate in 401(k), 403(b) and most 457 plans will increase from $22,500 to $23,000 in 2024. The “catch-up” contribution limit for individuals who are or will be age 50 by the end of 2024 is not changing, and remains $7,500 for 2024. Thus, if you are or will be age 50 by the end of 2024, you may be eligible to contribute up to $30,500 to your 401(k) plan in 2024. These same limitations apply if you work for a governmental or tax-exempt employer and participate in a 403(b) plan.Continue Reading Want to Put More Away in Your 401(k)? Qualified Plan Limits Generally Increase in 2024

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Seyfarth Synopsis: Fresh on the heels of the IRS Chief Counsel Memorandum on wellness and indemnity products, discussed in our prior post here, the agencies have weighed in with more formal and more expansive guidance throwing more cold water on the tax treatment of these types of products, that the Administration has dubbed “junk insurance”. 

Background

On July 7th, the Treasury Department, Department of Labor, and Health and Human Services (the “agencies”) issued proposed rules impacting “junk insurance”. The guidance proposes (i) changes to what qualifies as short-term, limited-duration insurance, (ii) amendments to the requirements for independent, non-coordinated coverage, and fixed indemnity insurance to be considered an “excepted benefit”, and (iii) clarifications of the tax treatment of fixed amount benefit payments under employment-based accident and health plans. The IRS also asks for comments on coverage limited to specified diseases or illnesses that qualifies as excepted benefits and on level-funded plan arrangements.Continue Reading My Insurance Doesn’t Cover That? Agency Guidance on “Junk Insurance”

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Seyfarth Synopsis: In light of the end of the COVID-19 National Emergency and Public Health Emergency (see our prior blog post here), the Internal Revenue Service (“IRS”) has announced the end of prior COVID-19-related special rules for health plan coverage.

On June 23, 2023, the IRS issued Notice 2023-37 to clarify the compatibility of…