2021 Year End Employee Benefit Plan Amendments

December 6, 2021 Alerts and Newsletters

Health and Welfare Plans

Employers that made available COVID-19 relief and benefit enhancements in 2020 – such as the increased carry over limit and extended grace period for health flexible spending accounts – need to amend their plan documents to incorporate those changes by the end of the 2021 plan year. For calendar year plans (i.e., most health and welfare plans) this means amendments incorporating the optional COVID-19 relief and benefit enhancements must be adopted by no later than December 31, 2021. Employers should work with employee benefits legal counsel and their third-party administrators or other document vendors to ensure that plan documents are timely amended to include any optional relief.

Click here to access a table that provides an overview of the COVID-19 relief available for health and welfare benefit plans. If an employer implemented any of the optional provisions described in the table, a plan amendment is required.

401(k) and 403(b) Plans

401(k) plans and 403(b) plans that offer hardship distributions must be amended to comply with the IRS’s 2019 final regulations on hardship distributions by the end of the 2021 plan year. For calendar year plans, this means that plan documents must be amended by December 31, 2021.

The final regulations include several changes to the rules governing hardship distributions, including prohibiting the suspension of elective deferrals or employee contributions following receipt of a hardship distribution, creating a single standard for determining whether a distribution is necessary to satisfy an immediate and heavy financial need, and providing opportunities to expand the availability of hardship distributions. Plans that previously required a 6-month suspension of elective deferrals or employee contributions should have eliminated that requirement in practice as of January 1, 2020, and an amendment to reflect that change must be adopted by no later than December 31, 2021. If an employer chose to implement any of the optional changes, the plan document must be amended to reflect these changes as well.

For detailed information about the final regulations, see our blog post here.

Firm Highlights


IRS Announces New Pilot Program for Retirement Plan Audits

On June 3, 2022, the Internal Revenue Service (“IRS”) announced a new pre-examination compliance pilot program beginning in June 2022. Under the pilot program, the IRS will notify a plan sponsor by letter that...


Health Plans: PCORI Fee Is Due August 1, 2022

What is the PCORI Fee? The Affordable Care Act created a non-profit corporation, the Patient-Centered Outcomes Research Institute (“PCORI”), to conduct research to help individuals, providers, and policymakers make better healthcare choices by advancing...


Verrill Appoints Karen Hartford as Firm’s New Diversity & Inclusion Committee Chair


Department of Labor Guidance and Federal Initiatives Counsel a Wait-and-See Approach for 401(k) Plan Fiduciaries Interested in Cryptocurrency Options

On March 10, 2022, the Department of Labor published Compliance Assistance Release 2022-01, 401(k) Plan Investments in “Cryptocurrencies” . The Release strongly discourages the addition of cryptocurrency (and other digital asset) options to the...


Comprehensive Benefit Plans Representation of Seller in Strategic Acquisition

We represented the largest physician network in Massachusetts in the employee benefits and executive compensation aspects of its acquisition by one of the largest health care companies in the United States. After several rounds...


31 Verrill Attorneys, Across Four Offices, Recognized in 2022 Chambers & Partners Guide


Verrill Welcomes Associates Rachel A. Deering, Anna Mikhaylina, Derek Rocha, and Lea Silverman


Employee Benefits & Executive Compensation 2021 Summer Client Advisory

Click here to view as a PDF. This Client Advisory summarizes developments in the law governing employee benefit plans prompted by the COVID-19 pandemic. We explain what these developments mean for plan sponsors and...


Advised Fortune 500 Company on Group Health and Welfare Benefit Plans

We were engaged by a Fortune 500 manufacturing company to provide legal and compliance services regarding its group health and welfare benefit plans. During the course of our representation, we have advised the company...


Courts Expand on Rules Regarding the Protection of Retirement Plan Assets

Contact Verrill at (855) 307 0700