The Consolidated Appropriations Act of 2023 (“Act”) was passed by Congress in late December 2022 and signed by President Biden on December 29, 2022.  The Act, a $1.7 trillion dollar spending bill, contains provisions which modify the laws applicable to welfare benefit plans and retirement benefit plans.  Below is a high-level list of the provisions of the Act which are effective in 2023 and which may affect your plan:

Welfare Benefit Plans

  • High Deductible Health Plans can continue to waive the deductible for any telehealth services for plan years beginning before January 1, 2025.

Retirement Benefit Plans

  • The age for required minimum distributions is increased to 73 starting on January 1, 2023, and age 75 starting on January 1, 2033.
  • Employers may now offer de minimis financial incentives to employees to participate in 401(k) and 403(b) plans.
  • The early distribution 10% percent tax will not apply to distributions for participants with a terminal illness.
  • Plans may allow participants the option of electing to receive matching contributions on a Roth basis.
  • Employers who (a) offer eligibility for military spouses within two months of hire, (b) qualify military spouses immediately for any matching contributions, and (c) vest employer contributions at 100% for military spouses, will receive a tax credit.
  • Repayment of qualified birth or adoption distributions must be limited to 3 years. Before the Act, the repayment term was not limited.
  • Participants in governmental 457(b) plans are no longer required to request changes in their deferral rate prior to the beginning of the month in which the deferral will be made.
  • Employers may participate in multiple employer 403(b) plans.
  • Employers joining a multiple employer plan are eligible for a startup tax credit for 3 years.

For more information on these changes and changes becoming effective after 2023, including allowing matching on student loan payments, higher catch-up limits, changes in the long-term part-time employee rules, required automatic enrollment for new plans and the creation of pension-linked savings accounts, please contact any member of our Labor and Employment Practice Group or join us on January 20, 2023 for the Secure 2.0 Webinar.  For more information on the Webinar click here:  Secure 2.0 Webinar – McNees Wallace & Nurick LLC (