The U.S. Departments of Labor, Treasury, and Health and Human Services (the “Departments”) recently issued FAQs regarding the Families First Coronavirus Response Act, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), and COVID-19. A number of these FAQs address a group health plan’s required coverage of COVID-19 tests, including which tests must be covered, related facility fees, reimbursement rates, and balance billing to patients. Employers should ensure that the third party administrators of their group health plans have incorporated this guidance for plan administration purposes. In addition, some of the other FAQs may be of interest to employers. For example, the FAQs provide that, if a group health plan reverses the increased coverage of COVID-19 or telehealth after the COVID-19 public health emergency period is over, the Departments will consider the plan to have satisfied the requirement to provide advance notice of changes to the Summary of Benefits… Continue Reading
Under the CARES Act, employers are eligible to claim an employee retention credit if certain conditions are met (see our prior blog post on the employee retention credit, as well as other employee benefits and executive compensation changes made by the CARES Act, here). The tax credit is equal to 50% of “qualified wages” paid to employees of up to $10,000. Qualified wages include (i) wages actually paid to covered employees (other than qualified paid sick and family leave wages for which a credit is allowed under the Families First Coronavirus Response Act) and (ii) the “qualified health plan expenses” allocable to such employees. On May 11, 2020, the IRS published new FAQs clarifying how qualified health plan expenses should be calculated for purposes of the employee retention credit. Notably, the FAQs provide guidance on how to calculate such expenses when an employer sponsors more than one health plan (e.g.,… Continue Reading
Under the CARES Act, employers who receive a Paycheck Protection Program (“PPP”) loan are ineligible to claim the employee retention tax credit. On May 6, 2020, the Small Business Administration (“SBA”) updated its FAQs on PPP loans to address situations when an employer received a PPP loan but now decides to repay it by the safe harbor deadline of May 14, 2020. Specifically, new Q/A-45 states that if such an employer repays its PPP loan by May 14, 2020, the employer will be eligible to claim the employee retention tax credit, provided the employer meets the other requirements to claim that credit. The SBA FAQs are available here.
Generally, if an employer-sponsored group health plan makes a material modification to coverage midyear that would affect the content of the plan’s Summary of Benefits and Coverage (“SBC”), the plan administrator must provide participants with 60 days’ prior notice of the modification. The U.S. Departments of Labor, Treasury, and Health and Human Services have issued a FAQ stating that they will not take any enforcement action against any plan for not providing such notice when the modification is to provide greater coverage related to the diagnosis and/or treatment of COVID-19 or to add benefits or reduce or eliminate cost sharing for telehealth and other remote care services. However, the plan administrator must still provide notice of the changes to participants as soon as reasonably practicable. This non-enforcement policy only applies while there is a public health emergency declaration or national emergency declaration related to COVID-19 in effect. The FAQs are… Continue Reading
CARES Act: Additional Guidance on the Interplay Between Social Security Tax Deferrals and Forgiveness of PPP Loans
In a new set of FAQs, the IRS clarifies that an employer who receives a loan under the Paycheck Protection Program (“PPP”) may also defer payment of the employer portion of Social Security taxes due on eligible wages until the employer receives notice from its PPP lender that the loan has been forgiven. Under the CARES Act, employers of all sizes may defer payment of their portion of Social Security taxes due on wages earned between March 27, 2020 and December 31, 2020, until December 31, 2021 (50% of the deferred taxes are due) and December 31, 2022 (the remaining deferred taxes are due), subject to certain restrictions. One of those restrictions is that an employer may not defer its Social Security taxes if it has taken out a PPP loan and all or any portion of the loan is forgiven. The new FAQs clarify that, once an employer receives… Continue Reading
Recently, the federal Departments of Labor, Treasury, and Health and Human Services (collectively, the “Agencies”) jointly issued a set of frequently asked questions and responses (the “FAQs”) that (i) provide additional examples of applying the Mental Health Parity and Addiction Equity Act, as amended (“MHPAEA”), to various fact patterns and (ii) finalize previous guidance issued by the Agencies in 2018 (see our prior blog post on that guidance here). The MHPAEA generally prohibits group health plans and issuers from imposing financial requirements (such as coinsurance or copays) or treatment limitations (such as visit limits or other “non-quantitative” limitations) on “mental health benefits” and “substance use disorder benefits” (collectively, “MH/SUD Benefits”) that are more restrictive than the predominant financial requirements and treatment limitations that apply to substantially all medical and surgical benefits (collectively, “Med/Surg Benefits”). The fact situations addressed in the FAQs include the following: • A group health plan’s imposition… Continue Reading
DOL Publishes FAQs on Employer Retirement Plan Obligations to Reemployed Service Members Under USERRA
The DOL recently published a series of frequently asked questions (“FAQs”) on its website that provide general guidance to employers on their retirement plan obligations to reemployed service members under the Uniformed Services Employment and Reemployment Rights Act of 1994 (“USERRA”). Among other things, the FAQs address (i) what military service must be credited for purposes of determining retirement benefits, (ii) an employer’s obligation to make retirement plan contributions while an employee is on a qualifying military leave of absence, and (iii) an employee’s right to make up missed contributions when he or she is reemployed following a qualifying military leave of absence. The FAQs are available here.
On December 14, 2018, Institutional Shareholder Services (“ISS”) issued its updated FAQs related to its U.S. Compensation Policies, effective for shareholder meetings occurring on or after February 1, 2019. There were some notable updates with respect to executive compensation and nonemployee director compensation, which are briefly discussed below. Problematic Pay Practices ISS had previously identified certain “problematic pay practices” that are likely to result in a negative say-on-pay vote recommendation. ISS has issued some notable updates: Impact of Code Section 162(m) Repeal. In light of the Code Section 162(m) repeal, ISS added, as a problematic pay practice, a shift away from performance-based compensation to discretionary or fixed compensation elements. Excess Termination Payments. ISS stated that new or materially amended agreements that provide for excess termination payments (no longer limited to change in control based termination payments) are problematic. Generally, termination payments are problematic if they exceed three times an executive’s… Continue Reading
The federal Departments of Labor (“DOL”), Health and Human Services, and the Treasury have jointly issued a set of proposed frequently asked questions (“FAQs”) which address nonquantitative treatment limitations (“NQTLs”) and health plan disclosure issues under the Mental Health Parity and Addiction Equity Act of 2008 (“MHPAEA”). Generally, the MHPAEA prohibits group health plans and issuers from imposing financial requirements or treatment limitations on “mental health benefits” and “substance use disorder benefits” (collectively, “MH/SUD Benefits”) that are more restrictive than the predominant financial requirements and treatment limitations that apply to substantially all medical and surgical benefits (collectively, “Med/Surg Benefits”). With respect to NQTLs, which include medical management, step therapy, and pre-authorization (versus “quantitative treatment limitations”, which are numerical, such as visit limits and day limits), a group health plan cannot impose an NQTL on MH/SUD Benefits in any classification unless, under the terms of the plan as written and in… Continue Reading
The IRS recently updated its Questions and Answers on Employer Shared Responsibility Provisions under the Affordable Care Act (the “FAQs”) to include a description of the employer shared responsibility payments process in the form of revised FAQs #55 – 58. FAQ #58 indicates the IRS will send assessments for the 2016 reporting year in late 2017. A brief overview of this process is described below: The IRS will send Letter 226J to the employer. This letter will include: (i) the assessment amount the IRS believes is owed by the employer for each month of the prior reporting year; (ii) a list of the full time employees resulting in the assessment (the list will include the Form 1095-C Part II indicator codes provided to the IRS, if any, by the employer); (iii) the steps the employer should take if it agrees or disagrees with the assessment; and (iv) the steps the… Continue Reading