New Ways to Self-Correct Overpayments Under EPCRS
Matthew P. Chiarello • October 8, 2021
On July 16, 2021, IRS issued Revenue Procedure 2021-30 to update the Employee Plans Compliance Resolutions System (the “EPCRS”). The update in part expands the opportunities for plan sponsors to self-correct failures under the EPCRS by: (1) extending the self-correction period from two to three years; (2) expanding the ability for plan sponsors to correct operational failures using plan amendments; (3) extending the safe harbor correction method for certain elective deferral failures; and (4) expanding guidance on the recoupment of overpayments.
This SW Benefits Blog focuses on the expanded guidance on the recoupment of overpayments. By making the following changes to the EPCRS, Revenue Procedure 2021-30 increased the flexibility that plan sponsors have when it comes to self-correcting an overpayment:
- New Optional Forms of Repayment : Revenue Procedure 2021-30 allows plan sponsors to give overpayment recipients the option to repay an overpayment in a lump sum payment, installment payments, or through an adjustment to their future payments.
- New Funding Exception Correction Method : Revenue Procedure 2021-30 added the new funding exception correction method. Under this method, corrective payments are not required for certain well-funded defined benefit plans. A single-employer plan is eligible for this method if the plan’s adjusted funding target attainment percentage is at least 100%. The method requires plan sponsors to reduce future benefit payments to an overpayment recipient to the correct payment amount, but does not require or permit further corrective payments or reductions.
- New Contribution Credit Correction Method : Revenue Procedure 2021-30 also added the new contribution credit correction method for defined benefit plans. Under this method, corrective payments are still required, but are reduced by a “contribution credit.” The reduced corrective payments equal the amount of the overpayment reduced by: (A) the increase in the plan’s minimum funding requirements attributable to the overpayment for a certain period; and (B) certain contributions paid to the plan in excess of the minimum funding requirements after the overpayment was made. Similar to the funding exception correction method, this method requires plan sponsors to reduce future benefit payments to an overpayment recipient to the correct payment amount. If the contribution credit reduces the corrective payment down to zero, no further corrective payments or benefit reductions are required.
Employee burnout has become an epidemic in today’s modern workplace. So much so that the World Health Organization (WHO) officially recognizes it as an “occupational phenomenon.”1
While many used to consider mounting workplace stress an individual employee problem, these days, it’s become an employer’s responsibility to prevent burnout before it hurts productivity and business performance—not to mention your employees’ physical and mental health.
Luckily, you can prevent burnout from affecting your workforce in several ways. This article will explore the causes and signs of employee burnout and the steps you can take to create a positive work environment where employees feel safe from toxic stress levels.
If you're a small business owner, you may have heard of the acronym PCORI and the fees that come with it. But what is PCORI, and how does it apply to your organization?
Under the Affordable Care Act (ACA), sponsors of self-insured health plans must pay a fee to fund the federal Patient-Centered Outcomes Research Institute (PCORI). PCORI is an independent organization the ACA created to conduct research to help healthcare consumers make better decisions for their specific needs and outcomes. It also performs research related to clinical effectiveness.
Employers offering a self-insured medical reimbursement health plan, such as a health reimbursement arrangement (HRA), must pay this fee by July 31 each year via Form 7201. This fee was initially set to expire in 2019, but Congress extended it through September 30, 20292, due to the Further Consolidated Appropriations Act of 20203.
