Regulatory Roundup May 2022

May brought a few federal and state legislative changes regarding taxes and employee benefits. The Internal Revenue Service (IRS) kicked things off by releasing new, inflation-adjusted contribution limits for Health Savings Accounts (HSAs) and Excepted Benefit Health Reimbursement Arrangements (EBHRAs). The state of Minnesota revised unemployment insurance tax rates for 2022 and 2023, and the state of Maryland enacted a Paid Family and Medical Leave (PFML) law for private-sector employers with 15 or more employees. Check out each of these developments below in this month’s Regulatory Roundup.

New HSA and EBHRA Contribution Limits

The IRS released updated contribution limits for both HSAs and EBHRAs. Per Revenue Procedure 2022-24, the updated rates are effective for the 2023 calendar year and have been adjusted for the country’s current economic inflation. The announced limits include individual coverage and family coverage amounts for standard and High Deductible Health Plans (HDHPs), as well as HSA catch-up coverage amounts for those 55 or older.

Minnesota Unemployment Insurance Tax Revisions

At the state level, Minnesota Governor Tim Walz signed bill SF 2677 into law, which both appropriates funds to repay the state’s loan from the federal unemployment trust fund and reduces the state’s unemployment tax rates for 2022 and 2023. The base tax rate was reduced from 0.5% to 0.1%, while rates for Special Assessments, due to interest on federal loans, and Additional Assessments were ceased entirely. Unemployment tax rates for 2022 are to be recalculated, and employers who are both in good standing and have already paid taxes for Q1 2022 will receive a credit for Q2 2022 taxes. Employers can then request a refund for any remaining amount after said credit is applied to Q2 2022 taxes, though it may take several months for said refunds to fully process. The recalculation of Q1 2022 taxes is expected to take a couple of weeks, and employers will receive a letter from the state after the process finishes.

Maryland’s New PFML Law

Finally, the state of Maryland overrode Governor Hogan’s initial veto to enact SB 275, thus establishing a PFML law for private-sector employers with 15 or more employees. The new law will receive funds from employer and employee payroll contributions as determined by the state’s Department of Labor. Contributions will start October 2023, and benefits will be available to employees starting January 1, 2025, provided said employees have worked at least 680 hours across the 12 months directly preceding the leave’s start date. Such employees can receive up to 12 weeks of paid leave for an applicable event, or 24 weeks if the event is related to medical leave during a pregnancy or parental leave after childbirth.

Additional Information

Get more details on the compliance updates from May here:

• 2023 HSA and EBHRA Limits
• Minnesota Revises 2022 Unemployment Insurance Tax Rates
• Maryland Paid Family and Medical Leave

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This information is provided as a courtesy, may change, and is not intended as legal or tax guidance. Employers with questions or concerns outside the scope of a Payroll Service Provider are encouraged to seek the advice of a qualified CPA, Tax Attorney, or Advisor