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  • November 2021

The Vita Blog November 2021

  1. IRS Announces Retirement Plan Limits for 2022

    System Administrator – Fri, 12 Nov 2021 16:00:00 GMT – 0

    The Internal Revenue Service has announced the 2022 cost-of-living adjustments (COLAs) to the various dollar limits for retirement plans. The Social Security Administration (SSA) has also announced the taxable wage base for 2022:
     

    2022

    2021

    Elective Deferral Limit (401(k) & 403(b) Plans)

    $20,500

    $19,500

    Catch Up Contributions (Age 50 and over)

    $6,500

    $6,500

    Annual Defined Contribution Limit

    $61,000

    $58,000

    Annual Compensation Limit

    $305,000

    $290,000

    Highly Compensated Employee Threshold

    $135,000

    $130,000

    Key Employee Compensation

    $200,000

    $185,000

    Social Security Wage Base

    $147,000

    $142,800

     

    Definitions 

    • Elective Deferral Limit means the maximum contribution that an employee can make to all 401(k) and 403(b) plans during the calendar year (IRC section 402(g)(1)).
       
    • Catch-up Contributions refers to the additional contribution amount that individuals age 50 or over can make above the Elective Deferral and Annual Contribution limits, if permitted by the company’s retirement plan.
        
    • Annual Contribution Limit means the maximum annual contribution amount that can be made to a participant's account (IRC section 415). This limit is expressed as the lesser of the dollar limit or 100% of the participant's compensation, and is applied to the combination of employee contributions, employer contributions and forfeitures allocated to a participant's account.
       
    • Annual Compensation Limit means the maximum compensation amount that can be considered in calculating contribution allocations and non-discrimination tests. A plan cannot consider compensation in excess of this amount (IRC Section 401(a)(17)).
       
    • Highly Compensated Employee Threshold means the minimum compensation level established to determine highly compensated employees for purposes of non-discrimination testing (IRC Section 414(q)(1)(B)).
       
    • Social Security Wage Base is the maximum amount of earnings subject to Social Security payroll taxes.
  2. IRS Announces 2022 Pre-Tax Contribution Limits

    System Administrator – Wed, 10 Nov 2021 16:00:00 GMT – 0
    The Internal Revenue Service recently announced annual inflation adjustments for 2022. For taxable years beginning in 2022, IRS Rev. Proc. 2021-45 indicates the following maximums apply for Health Flexible Spending Arrangements, Adoption Assistance Programs, and Commuter Benefits:
     

    Health FSA

    The annual Health FSA limit will increase $100 from $2,750 in 2021 to $2,850 in 2022.

    The annual Dependent Care FSA limit will revert to $5,000 in 2022.
     

    FSA Balance Rollovers

    The increase of the Health FSA limit means an increase to the Health FSA rollover amount allowed for 2022. Up to $570 (20% of the regular election maximum) will be rolled from the 2022 plan year into the 2023 plan year.

    Dependent Care FSA balances from 2022 will not roll into 2023. Any balance that remains in the Dependent Care FSA after the 2022 claims submission deadline will be forfeited.
     

    Commuter Benefits Limits

    The monthly transit and parking limits will increase from $270 in 2021 to $280 in 2022.
     

    Adoption Assistance Limit

    The annual Adoption Assistance limit will increase from $14,400 in 2021 to $14,890 in 2022.


    If you are a Vita Flex FSA client who currently offers the IRS maximum and your plan renews January 1, 2022, your limits have been automatically increased for the 2022 plan year, unless you previously requested otherwise.

    If you are a Vita Flex Commuter Benefits client, the monthly pre-tax limit will be automatically increased to the IRS maximum for the January benefit month. 



     
  3. COVID-19 Vaccine Mandate for Companies with 100+ Employees

    System Administrator – Fri, 05 Nov 2021 15:00:00 GMT – 0

    (1/14/2022 Update): On Thursday, January 13 the Supreme Court blocked the Biden administration's vaccine-or-test requirement for companies with over 100 employees. However, the mandate was allowed to proceed for healthcare facilities that receive payment from Medicare or Medicaid. This ruling was announced three days after the mandate was to take effect. 

    (11/8/2021 Update): On November 6, a federal appeals court in Louisiana blocked the below COVID-19 vaccine mandate in response to a suit filed by several states. We expect more to develop in the coming days.

    On November 4, Occupational Safety and Health Administration (OSHA) released details on the COVID vaccine mandate for companies with 100+ employees. Note: health care providers, government contractors, and Medicare/Medicaid providers have separate mandates not covered in this blog. 

    Which employers are currently subject?

    Employers with 100 or more employees must follow the newly released regulations. All employees should be counted to determine whether or not an employer is subject; this includes part-time, full-time, and remote workers. Companies affiliated through common ownership or controlled groups should consult with an attorney to determine if all groups must be counted together.

    Although state challenges are expected, the Labor Department’s top legal official, Seema Nanda, told reporters that OSHA rules preempt conflicting state laws or orders. In states that have their own OSHA-approved agencies for workplace issues, those agencies must enact a rule at least as effective as OSHA’s. 

    OSHA indicated a new rule may be released in the future to also cover smaller employers by asking for public comment.
     

    What is required?

    Companies must require workers to be fully vaccinated or conduct weekly COVID testing and wear a mask while in the workplace. Employers must retain documentation of employees’ vaccination statuses. To be fully vaccinated, an employee must receive two doses of Moderna or Pfizer-BioNTech, or one dose of Johnson & Johnson; booster shots are not currently required under the OSHA rule. 

    December 5 is the deadline for enforcing the mask mandate. Employees must be fully vaccinated or begin testing January 4. 

    Lastly, employers must provide paid time off for their workers to get vaccinated (up to four hours) and paid sick leave to recover from side effects of the vaccine. This leave requirement begins December 5. 
     

    What exceptions are allowed?

    Employees working from home and employees who work outdoors will not be required to be vaccinated or test weekly; only those in the workplace are covered under the order’s rules. 

    Employers are required to give exemptions to comply with the Americans with Disabilities Act (ADA) and Title VII of the Civil Rights Act (sincerely held religious beliefs). 
     

    What considerations are there for testing in lieu of vaccination?

    Unless workplace employees qualify for an exemption, employers could choose to mandate vaccines without a testing option.

    If the testing option is given to unvaccinated employees, employers are not required to pay for tests, provide tests, or provide paid time off for testing. The OSHA rule allows for both PCR and antigen tests to be used for weekly testing, provided they are approved for emergency use by the FDA. However, over-the-counter home tests are generally not considered sufficient unless they are proctored (the tests cannot be both self-administered and self-read). 

    Employers should note that so-called “surveillance” testing or testing for employment purposes is not required to be covered by health insurance. The federal mandate to cover COVID-19 testing only requires coverage for tests ordered by a healthcare provider. 
     

    What are the penalties?

    Employers who fail to comply could face penalties of up to $13,653 per serious violation.
     

    Resources: 

    • OSHA COVID-19 mandatory vaccination policy template
    • EEOC information and Q&A regarding vaccination accommodations
    • OSHA rule for COVID vaccination
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