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CARES Act Changes Rules Governing Retirement Plans

March 30, 2020

Among the many other provisions of the CARES Act are those impacting retirement plans (including 401(k)s, profit sharing plans, and IRAs) in order to provide an influx of cash to struggling employees.

Tax Favored Distributions
In calendar year 2020, an individual (including a self – employed individual) who is either diagnosed with SARS-CoV2 or COVID-19, has a family member diagnosed with SARS-CoV2 or COVID-19, or experiences adverse financial consequences due to quarantine, furlough, layoff, reduced work hours, or is unable to work due to lack of child care, may take a distribution of up to $100,000 in any taxable year. An employer may accept an employee’s certification that the request is due to one of these reasons.

Unless the employee chooses otherwise, the distribution will be included in his income ratably over three (3) years. Additionally, over a three (3) year period that begins on the day after the distribution occurs the employee may repay (in one or more payments) any amounts which they received as a distribution under this provision. These repayments shall not count against the contribution limits for the plan year.

Loans from Qualified Plans
Loans issued from qualified plans during the next six (6) months shall have their limits increased to the lesser of $100,000 or 100% of their vested account balance.

Current loans shall have repayments delayed with all interest accrued during the delay being forgiven and the five (5) year rule for loans being disregarded. Any payments due on or before December 31, 2020, shall be delayed for one (1) year. Any remaining payments shall have their due date adjusted as a result of the delay. 

Temporary Waiver of Required Minimum Distributions
For calendar year 2020, RMDs from 401(k)s, profit sharing plans, 403(b)s, 457(b) and IRAs shall be waived if the taxpayers required beginning date is in 2020 and the distribution was not made before January 1, 2020. 

Plan Amendments
Plan amendments that are required due to the implementation of these provisions must be made on or before the last day of the first plan year beginning on or after January 1, 2022.

For questions, or more information, please contact Priscilla A. Grant, BMD Business, Corporate and Tax Member at pag@bmdllc.com or 330.253.5934.

Client Alert

New York, Kansas, Massachusetts, and Delaware Become the latest States to Adopt Full Practice Authority for Nurse Practitioners

May 19, 2022While the COVID-19 pandemic certainly created many obstacles and hardships, it also created many opportunities to try doing things differently. This can be seen in the instant rise of remote work opportunities, telehealth visits, and virtual meetings. Many States took the challenges of the pandemic and turned them into an opportunity to adjust the regulations governing licensed professionals, including for advanced practice registered nurses (APRNs).Client Alert

Explosive Growth in Pot of Gold Opportunity for Bank (and Other) Cannabis Lenders Driving Erosion of the Barriers

May 13, 2022Our original article on bank lending to the cannabis industry anticipated that the convergence of interest between banks and the cannabis industry would draw more and larger banks to the industry. Banks were awash in liquidity with limited deployment options, while bankable cannabis businesses had rapidly growing needs for more and lower cost credit. Since then, the pot of gold opportunity for banks to lend into the cannabis industry has grown exponentially due to a combination of market constraints on equity causing a dramatic shift to debt and the ever-increasing capital needs of one of the country’s fastest growing industries. At the same time, hurdles to entry of new banks are being systematically cleared as the yellow brick road to the cannabis industry’s access to the financial markets is being paved, brick by brick, by the progressively increasing number and size of banks that are now entering the market.Client Alert

2021 EEOC Charge Statistics: Retaliation & Impact of Remote Work

May 11, 2022The U.S. Equal Employment Opportunity Commission (EEOC) released its detailed information on workplace discrimination charges it received in 2021. Unsurprisingly, for the second year in a row, the total number of charges decreased as COVID-19 either shut down workplaces or disconnected employees from each other. In 2021, the agency received a total of approximately 61,000 workplace discrimination charges - the fewest in 25 years by a wide margin. For reference, the agency received over 67,000 charges in 2020, and averaged almost 90,000 charges per year over the previous 10 years.Client Alert

Ohio’s Managed Care Overhaul Delayed – New Implementation Timeline

May 4, 2022At the direction of Governor Mike DeWine, the Ohio Department of Medicaid (ODM) launched the Medicaid Managed Care Procurement process in 2019. ODM’s stated vision for the procurement was to focus on people and not just the business of managed care. This is the first structural change to Ohio’s managed care system since the Centers for Medicare & Medicaid Services' (CMS) approval of Ohio’s Medicaid program in 2005. Initially, all of the new managed care programs were supposed to be implemented starting on July 1, 2022. However, ODM Director Maureen Corcoran recently confirmed that this date will be pushed back for several managed care-related programs.Client Alert

Laboratory Specimen Collection Arrangements with Contract Hospitals - OIG Advisory Opinion 22-09

May 3, 2022On April 28, 2022, the Department of Health and Human Services, Office of Inspector General (“OIG”) published an Advisory Opinion[1] in which it evaluated a proposed arrangement where a network of clinical laboratories (the “Requestor”) would compensate hospitals (each a “Contract Hospital”) for specimen collection, processing, and handling services (“Collection Services”) for laboratory tests furnished by the Requestor (the “Proposed Arrangement”). The OIG concluded that the Proposed Arrangement would generate prohibited remuneration under the federal Anti-Kickback Statute (“AKS”) if the requisite intent were present. This is due to both the possibility that the proposed per-patient-encounter fee would be used to induce or reward referrals to Requestor and the associated risk of improperly steering patients to Requestor.
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