Page 31 - Healthcare News Jan/Feb 2023

Healthy
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Treatment of Student-loan Pay- ments for Matching Contributions
Starting in 2024, student-loan payments can be treated as part of your retirement contribution to qualify for employer-matched contributions in a workplace retirement account. Employers will have the flexibility to provide con- tributions to their retirement plan for employees who are paying off student loans instead of saving for retirement.
Emergency Savings Accounts
Starting in 2024, retirement plans will have the option
of providing ‘emergency savings accounts’ that allow non- highly paid employees to make after-tax Roth contributions to a savings account within their own retirement plan. Employers may automatically opt employees into these accounts at no more than 3% of eligible wages. Employ- ees can opt out of participation. No further contributions can be made if the savings account has reached $2,500 (indexed), or a lesser limit established by the employer. The Department of Labor and/or the Treasury Department may issue guidance on these provisions.
Withdrawals for Certain Emergency Expenses
Penalty-free distributions are allowed for “unforeseeable or immediate financial needs relating to necessary personal or family emergency expenses” up to $1,000. Only one distribution may be made every three years, or one per year if the distribution is repaid within three years. Penalty-
free withdrawals are also allowed for small amounts for individuals who need the funds in cases of domestic abuse or terminal illness.
Federal Contribution Match
Starting in 2027, low-income employees can gain access to a federal matching contribution of up to $2,000 each year that will be deposited into their retirement savings ac- count. The matching contribution is 50% of the contribu- tions, but it decreases according to income — for example, married taxpayers filing jointly between $41,000 and $71,000, and single taxpayers between $20,500 and $35500.
Required Minimum Distributions
Beginning Jan. 1, 2023, the age for required minimum distribution (RMD) from an IRA is increased to age 73. Starting in 2033, the RMD age will be 75. (IRA owners turning age 72 in 2023 would not be required to take RMDs in 2023.) Furthermore, the penalty for not taking your RMD has been decreased from 50% of what was required to be withdrawn to 25%, and even further down to 10% if corrected within two years.
Facilitation of Error Corrections
The act expands the self-corrections system, allowing more types of errors to be fixed internally without having to amend returns in the Employee Plans Compliance Resolu- tion System.
Immediate Incentives for Participation
At this moment, employers use matching contribu-
tions as a means to motivate employees to save for their retirement. Beginning in 2023, employers can incentivize employees with gifts cards or other small monetary rewards to increase engagement, although any financial rewards should be small and cannot come from retirement-plan assets.
In summary, the SECURE Act 2.0 provides many new benefits and opportunities to save for retirement. It allows employers to offer more flexible contributions and encour- ages employees with incentives to become engaged in their own financial health. With reduced penalties and expanded self-correction rules, this act gives Americans more control over their retirement savings, allowing them to become bet- ter prepared for their future.
As always, it’s important to consult with your advisor for advice, as guidance and changes to provisions are expected, and everyone’s situation is unique. v
Dan Eger is a tax supervisor at the Holyoke-based accounting firm Meyers Brothers Kalicka, P.C.; (413) 536-8510.
Law
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away from a noisy area, for example), time off, altering non-essential job functions, and reassignment to a vacant position.
Employers should remember that there is no magic word for requesting a reason- able accommodation; an individual simply has to tell the employer that he or she needs an adjustment or change at work because of an impairment. Employers do not have to provide reasonable accommodations if do- ing so would be an undue hardship, mean- ing that providing reasonable accommoda-
tion would result in significant difficulty
or expense. Additionally, employers do not have to eliminate an essential function of a job, tolerate poor performance, or excuse violations of conduct to provide reasonable accommodations.
There is another consideration for em- ployees with hearing disabilities. Employ- ers may also exclude an individual with
a hearing disability from a job for safety reasons when the individual poses a direct threat, which is defined as a significant risk of substantial harm to the individual or others because of a disability that cannot be eliminated or reduced through reasonable accommodations. If an employer believes there is such a direct threat, the employer should conduct an individualized assess-
ment of the individual’s present ability to perform the essential functions of the job.
Considerations should include the dura- tion of the risk, the nature and severity of potential harm, the likelihood that the po- tential harm will occur, and the imminence of the potential harm. The harm must be serious and likely to occur, not remote and speculative. Finally, the employer must consider whether any reasonable accom- modations, such as the ones above, would reduce or eliminate the risk of direct threat. The EEOC provides examples of how this balancing test should work.
If employers have questions relating to this balancing test, or regarding the new guidance for hearing disabilities or dis- abilities and reasonable accommodations
in general, it is prudent to contact legal counsel in order to avoid any potential liability. v
Trevor Brice is an attorney who spe- cializes in labor and employment-law matters at the Royal Law Firm LLP,
a woman-owned, women-managed corporate law firm that is certified as a women’s business enterprise with the Massachusetts Supplier Diversity Office, the National Assoc. of Minor- ity and Women Owned Law Firms, and the Women’s Business Enterprise National Council.
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