We’re two months into 2023, and there’s already an abundance of new rules and regulations for employers to keep track of. In Sentinel’s latest webinar, we had panelists discuss these key legislative updates that will shape HR compliance and benefits offerings in the coming year.
Greg Puig led Ryan Ransford, Fallon Carpenter and guest speaker, Paul Carelis, SHRM-CP, PHR of MP through a series of topics spanning new legislation, SECURE 2.0 Act and how HR professionals can optimize their benefits package in an evolving marketplace. This article summarizes their findings and insights.
Employers are seeing the following five general trends and changes moving into 2023:
The SECURE 2.0 Act builds upon the SECURE Act of 2019, which is now sometimes referred to as SECURE 1.0. There are some key differences between the two Acts:
Considering the large number of changes made with SECURE 2.0, there are some steps you can take to try to navigate the coming months. For an in-depth review of each provision, the Senate Committee on Finance came out with a description of each that you can find online.
Sentinel will soon be distributing a summary of the major provisions and recently conducted a webinar discussing the mandatory provisions. Additional guidance will likely be released around March or April.
Some of the optional SECURE 2.0 provisions take effect in 2023. Employees can now self-certify hardships, which used to be a big burden on the HR and employer side.
Employers can now offer to accept company contributions as Roth contributions. The employer must allow for the option, and the employee gets to select if they want to opt in.
Employers can now offer gift cards for employees to encourage them to join a company retirement plan. This was previously not allowed.
Employers can match qualified student loan payments for employees. The employee can now match money that goes into the retirement plan based on what the employee is paying for their student loans.
Employers can expect to see a trend toward benefits offerings in the space of mental health (e.g. reimbursements for therapy copays, mental health days, etc). Many employees have reported burnout as a result of the past few years and are looking for help to navigate that.
Some other new benefit offerings are bereavement (including loss of pregnancy), fertility benefits, adoption benefits, elder care, financial planning and Medicare planning. Employers should be prepared to navigate a post-pandemic world with benefits employees really want.
The pandemic ushered in a new era with more remote workers, but this also comes with new challenges. As employers hire people, they must be compliant with the laws in which the employee resides. This is an opportunity to update employee handbooks, add addendums and familiarize yourself with the laws in those states.
There has been activity with the Department of Labor lately with the hospitality industry, specifically concerning child labor laws and ensuring workers are being paid overtime at the correct rate.
The National Labor Relations Board has been keeping a close eye on any business that is potentially having union activity. The Board did not previously have many monetary fines, but they now have a monetary penalty available to enforce regulations.
The Mental Health Parity Act is also at the forefront of the DOL’s work. Consider asking your broker/adviser/consultant if your plan is adhering to the law.
SECURE 2.0 had a variety of mandatory provisions employers should know about. A hard-copy annual statement is now required for all participants unless they opt out. This provisions goes into effect in 2026, and we could see changes before then.
For new retirement plans (created in 2023 and beyond, not those that were already created), mandatory automatic enrollment will go into effect starting in 2025. For all the other plans, employers will have to take another look at auto enrollment to decide if that’s something they want to offer.
We can expect companies to go back to the drawing board and ask if auto enrollment makes sense for them now.
Open enrollment is not the only time of year you should be engaging your participants regarding their benefits offerings. During open enrollment, participants are often overwhelmed with offerings and not thinking of the other perks you offer.
In order to successfully use benefit offerings for your retention and recruitment efforts, consider planning out a benefits strategy for the year to inform participants of their options in anticipation of open enrollment.
It can be challenging to keep track of the nuances and updates to compliance regulations. Fallon explained how Sentinel is part of a risk committee to help ensure compliance. It is important to have reputable partnerships to talk to about regulations and ensure you are interpreting everything correctly.
Sentinel will be providing more legislative updates and resources in the coming weeks. For a more complete summary of Sentinel’s latest webinar, you can find the recording here.