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Because hardship withdrawals permanently reduce an employee’s account balance, the IRS has placed stringent rules on how and when a participant can take a distribution — even if it’s for a financial need. The IRS has issued final rules that will relax some of the more arduous guidelines. The new guidelines are set to take effect January 1, 2020, and some of them are mandatory for plan sponsors to adopt.
The Department of Labor (DOL) issued a final rule on September 24, 2019, increasing the minimum salary threshold level for white-collar exemptions to $684 per week (which equals an annual salary of $35,568). This new amount will be effective beginning January 1, 2020; the threshold currently sits at $455 per week ($23,660 annually). Wage and hour enthusiasts will be quick to recognize that this is not the DOL’s first go-around with raising the threshold, which was put on hold due to a Federal District Court injunction back in 2016.
On June 13, 2019, the federal government issued lengthy and complex regulations that both expand and limit the circumstances under which an employer may reimburse its employees’ individual health insurance premiums. This article introduces these regulations and takes a big picture look at their impact under the Affordable Care Act (ACA) and a school district’s other post-employment benefits (OPEB) obligations.
On March 7, 2019, the Department of Labor (DOL) proposed revisions to the Fair Labor Standards Act (FLSA) white collar exemption rule. The DOL is proposing a minimum salary threshold to increase to $679 per week (which equals an annual salary of $35,308). The threshold currently sits at $455 per week ($23,660 annually). With an anticipated effective date of January 1, 2020, this proposal signals the Department’s desire to bring the required salary amount to a dollar figure more representative of modern-day wages.
Health Insurance Portability and Accountability Act (HIPAA) rules require group health plans to provide special enrollment opportunities to certain employees, dependents, and Consolidated Omnibus Budget Reconciliation Act (COBRA) qualified beneficiaries. Being aware of special enrollment situations is important, along with making sure special enrollment rights are communicated.
Earlier this year, Congress passed (and the President signed) the Bipartisan Budget Act which included several provisions affecting qualified retirement plans. As employers look ahead at planning for a new calendar year, let’s take a moment to discuss the change to hardship distributions employers may consider adopting. New legislation did not change what might constitute an individual hardship, but it does make hardship withdrawals easier to obtain for participants.
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