End of The Year HR Tips and Preparations for 2022
The end of the year is approaching quickly, and with that comes the need for preparation. Devoting time to early preparation can help set your business up for immediate success in the new year. Here we have devised a guide for helping you to better prepare your employees and organization for all of those end-of-the-year questions and concerns. Read on to discover several ways in which you can set yourself up for end-of-the-year success.
Why Does End-of-Year Prep Matter?
End of the year prep is a crucial aspect of business. It can be tempting to sit back and relax come December, but in truth, there is much that needs to be done. Getting preparations in order for the end of the year can set up your business for immediate success come the new year.
In essence, by planning ahead, HR teams and companies can hit the ground running with updated benefits, a refreshed outlook on culture, and much more.If you are looking to get your team off the ground and running as soon as the new year hits, then read on for these end of the year tips that can help set your team up for success.
How Can Employers Help?
As the year winds down, employers should remind employees about their FSA and HSA planning. It can be difficult to track all of the changes and details that employees need to know. For this reason, it is crucial to maintain clear communication as the year comes to a close. Here are 3 key points to communicate with your employees during Q4:
- Deadlines: While HSA funds roll over year to year, FSAs tend to expire at the end of the calendar year (or at the end of the plan year). However, there may be a carryover or grace period, depending on the plan. It’s important for employers to remind their teams as those deadlines approach and as to whether or not there’s a grace period for FSA funds.
- Rollover: Should your plan offer rollover, you can move up to $550 worth of funds from your FSA over to the next year.
- FSA- and HSA-Eligible Products and Services: There may be some health services and products that your employees aren’t aware of that they can use their FSA and HSA funds on. Surprising services and products include service animal expenses, thermometers, vision correction, and sunscreen. Be sure to share the FSA Store’s list of eligible items with your employees to make sure they know their options.
- Limits: The HSA out-of-pocket limits for 2022 have increased from $3,600 to $3,650 for individuals and from $7,200 to $7,300 for families.
- Grace Period: Be aware of any grace periods offered by your FSA plan. Typically, the grace period allows for two-and-a-half months following your standard deadline.
- CARES Act Changes: The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) changed certain requirements for HSAs, FSAs, and HRAs that make it easier for employees to pay for certain everyday medical care and items. These changes removed the requirement for a prescription when purchasing over-the-counter medicine with HSA and FSA funds and made menstrual products FSA- and HSA-eligible. It also made it so that telemedicine services can be covered with HSA funds before a deductible has been met—unless extended, this update will expire December 31, 2021.
- W-4: Employers should be sure to remind employees about their W-4 withholdings. It is important to note that Employers are required by the IRS to inform employees about resubmitting Form W-4 should they experience significant changes to filing status, such as marriage, divorce, or any other changes. This notice needs to be provided by December 1st.
10 HR Tips to Prepare for the End of the Year
Use the following steps to set your organization up for success heading into the new year:
- Communicate Reminders to Employees: From submitting FSA information to updating personal information, HR can stay ahead of yearly compliance (and administrative headaches) by regularly communicating key reminders to teammates before they leave for the holidays.
- Plan Ahead for Open Enrollment: When preparing for your 2021 benefits package, HR should work with brokers to take a proactive approach to open enrollment that considers challenges teams may face in the coming year.
- Address COVID-19 Concerns: It’s still too soon to tell when the COVID-19 outbreak will abate and workers can safely return to offices and worksites. Update your safety plan accordingly and make sure that you have appropriate communications prepared for testing strategies, rehiring former employees, and return-to-work letters.
- Audit Your PTO Policy: When was the last time you reviewed and updated your PTO policy? With coronavirus and changing employee benefits preferences, consider making changes to your PTO offering.
- Keep an Eye on 2022 Compliance: Heading into a new year, the IRS often makes adjustments to required forms like 1095-Cs and even overtime thresholds and HSA contribution limits. Don’t miss these vital updates—and communicate changes to your team, when applicable.
- Consider Your Culture: Take a look at your company culture. What’s working? What isn’t? Consider what changes you could make to improve retention, recruitment, and engagement—and find out how an HRIS can help you achieve these goals.
- Watch the HR Calendar: Don’t let yourself get swamped with new-year compliance deadlines. A comprehensive HR calendar can help you stay on top of these important dates, even before the year begins.
- Update Personal Information: Employees should be sure that all addresses and contact information are up to date for W-2s and ACA forms in the New Year. With BerniePortal, employees can easily check this information and make changes on their own.
- Check PTO Status: Is your organization’s PTO policy “use it or lose it”? Employees may want to know this before taking off for the holidays. If PTO rolls over, employees should check their balances for 2021.
- Finalize Benefits Elections: If your group plan has a 1/1/22 effective date, employees need to make sure they’ve completed all their elections and are satisfied with their choices well before the end of the year. Multiple reminders are typically necessary here. Because there can be brief delays in getting new insurance information, it may benefit employees to be reminded to refill prescriptions before the year-end.
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