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December HR News Worth Review

Upcoming ACA Reporting Deadlines & Permanent Extension Proposed

Affordable Care Act (ACA) reporting under Section 6055 and Section 6056 for the 2021 calendar year is due in early 2022. Specifically, reporting entities must:

  • Furnish statements to individuals by Jan. 31, 2022; and
  • File returns with the IRS by Feb. 28, 2022 (or March 31, 2022, if filing electronically).

Penalties may apply for reporting entities that fail to file and furnish required returns and statements by the deadline.

proposed rule issued on Nov. 22, 2021, would extend the annual furnishing deadlines under both Sections 6055 and 6056 for an additional 30 days. However, this rule is in proposed form and has not been finalized. As a result, the general furnishing deadline (Jan. 31) continues to apply. In either case, reporting entities are generally encouraged to furnish statements to individuals as soon as they are able.

Employer Takeaway

The IRS generally encourages reporting entities to furnish statements as soon as they are able.

Although penalty relief has been provided in prior years for reporting entities that make good faith efforts to comply with the reporting requirements, this penalty relief is not available for reporting for tax year 2021 and subsequent years. This good faith relief was intended to be transitional to accommodate public concerns with implementing new reporting requirements under the ACA. These reporting requirements have now been in place for six years, and the IRS has determined that transitional relief is no longer appropriate. Therefore, the IRS has discontinued the transitional good faith relief after tax year 2020.

New Rule Requires Reporting of Medical and Prescription Drug Costs

On Nov. 17, 2021, the Departments of Labor (DOL), Health and Human Services (HHS) and the Treasury (Departments) released an interim final rule requiring health plans and issuers to report information regarding the cost of prescription drugs and certain medical expenses. This rule is a continuation of the Biden administration’s efforts to promote greater transparency in health care spending.This rule requires plans and issuers in the group and individual markets to submit certain information on prescription drug and other health care spending to the Departments annually, including:

  • General information regarding the plan or coverage;
  • Enrollment and premium information, including average monthly premiums paid by employees versus employers;
  • Total health care spending, including prescription drug spending by enrollees versus employers and issuers;
  • The 50 most frequently dispensed brand prescription drugs, the 50 costliest prescription drugs by total annual spending and the 50 prescription drugs with the greatest increase in plan or coverage expenditures from the previous year;
  • Prescription drug rebates, fees and other compensation paid by drug manufacturers to the plan or issuer in each therapeutic class of drugs, as well as for each of the 25 drugs that yielded the highest amount of rebates; and
  • The impact of prescription drug rebates, fees and other compensation on premiums and out-of-pocket costs.

The Departments will issue biennial public reports on prescription drug pricing trends and the impact of prescription drug costs on premiums and out-of-pocket costs starting in 2023.

Employer Takeaway

Plans and issuers were generally required to begin reporting by Dec. 27, 2021, and to submit information by June 1 of each year thereafter. However, the Departments delayed the reporting requirement for 2020 and 2021 information until Dec. 27, 2022.

The Departments will not take enforcement action against a plan or issuer that submits the required information for 2020 and 2021 by Dec. 27, 2022.

2022 State Minimum Wage Rates

The current federal minimum wage rate is $7.25 per hour. However, several states have adopted minimum wage rates higher than the federal rate. When the state rate and the federal rate are different, employers must pay their employees the higher rate. Additionally, some counties or municipalities may have minimum wage rates that are higher than the rate set by that state.

Employer Takeaway

Many states have raised their minimum wage rates for 2022. Please review our chart to make sure you are paying the proper minimum wage to employees in various states.

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