Late Tuesday afternoon, the IRS released the eagerly anticipated guidance regarding the COBRA premium assistance provisions of the American Rescue Plan Act of 2021. This Notice 2021-31 contains 86 questions and answers. Among the issues discussed, this Notice addresses who is eligible for this COBRA premium assistance and what constitutes a reduction in hours of employment or an involuntary termination of employment that makes an individual eligible for the COBRA premium assistance. The Notice addresses what coverage is eligible for the premium assistance, the period of time that the premium assistance is available, and the extended election period for COBRA coverage…. Read More
Archive for 2021
HSA limits for 2022 were announced today, May 10, 2021. The IRS released the limits for HSAs via Revenue Procedure 2021-25 as follows: Self-Only Enrollment in a High Deductible Health Plan (HDHP) 2022 HSA Limits: Maximum annual contribution: $3,650 ($3,600 in 2021) Minimum deductible for the HDHP to be HSA-qualified: $1,400 (no change from 2021) Maximum HDHP out-of-pocket limit: $7,050 ($7,000 in 2021) Family Enrollment in a High Deductible Health Plan 2022 HSA Limits: Maximum annual contribution: $7,300 ($7,200 in 2021) Minimum deductible for the HDHP to be HSA-qualified: $2,800 (no change from 2021) Maximum HDHP out-of-pocket: $14,100 ($14,000 in 2021) A… Read More
The Internal Revenue Service released Notice 2021-26 which clarifies the taxation of dependent care assistance benefits that were available in 2021 and 2022 due to either the carryover of unused benefits or the extended claims period. Under the various COVID-19 related relief provisions, dependent care assistance benefits that would have been available in 2020 or 2021 could be used in a later year. This Notice provides that these benefits will be excluded from an employee’s gross income when they are used in 2021 or 2022. In addition, these amounts will not be taken into account for determining the dollar limit on dependent care assistance benefits… Read More
April 7, 2021 Today, the IRS released the following: COBRA Premium Assistance under the American Rescue Plan Act of 2021 FAQs General COBRA FAQs for Workers Model Notices Model General Notice and COBRA Continuation Coverage Election Notice: MS Word | PDF Model Notice in Connection with Extended Election Period: MS Word | PDF Model Alternative Notice: MS Word | PDF Model Notice of Expiration of Premium Assistance: MS Word | PDF Summary of COBRA Premium Assistance Provisions under the American Rescue Plan Act of 2021: MS Word | PDF
The IRS released Announcement 2021-7 that provides that amounts paid for personal protective equipment for the primary purpose of preventing the spread of COVID-19, such as masks, hand sanitizer and sanitizing wipes for use by the taxpayer, the taxpayer’s spouse, or the taxpayer’s dependent(s) are treated as amounts paid for medical care under § 213(d) of the Internal Revenue Code (Code). As such, these amounts can be reimbursed by a health flexible spending arrangement, a health reimbursement arrangement or a health savings account.