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Additional Federal Guidance Regarding COVID-19 and Telehealth Coverage: Some Employer Take-Aways

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

Have You Notified Participants of Extended Deadlines?

As noted in our prior post here, the U.S. Departments of Labor and Treasury recently issued a notice requiring all employee health and welfare benefit plans to disregard the period from March 1, 2020 until 60 days after the announced end of the COVID-19 National Emergency (or other announced date) when determining the deadline to request HIPAA special enrollment, elect COBRA coverage, make a COBRA premium payment, notify the plan of a COBRA qualifying event or determination of a disability, file a benefit claim or appeal, or request an external review of a benefit claim denial. Although the notice did not address whether plan participants needed to be notified of these extended deadlines, plan administrators should be aware that they likely have a fiduciary duty to accurately convey this information to participants. For example, a COBRA election notice that states a deadline to elect or make premium payments without mentioning… Continue Reading

IRS Issues Proposed Rule on Withholding from Periodic Payments from Pensions and Annuities

Under Section 3405(e)(2) of the Internal Revenue Code, withholding from periodic payments from pensions and annuities is determined under rules prescribed by the Secretary of the Treasury. Currently, under IRS Notice 2020–3, if no withholding certificate is in effect, the required withholding amount is determined by treating the payee as a married individual claiming three withholding exemptions. Under the proposed rule, beginning in 2021, the required withholding amount will be determined in the manner described in the applicable forms, instructions, publications, and other guidance prescribed by the IRS Commissioner (e.g., the annual Publication 15-T and instructions to Form W-4P). The Proposed Rule can be found here.

DOL Issues Relief for Plan Fiduciaries

The DOL’s Employee Benefits Security Administration (“EBSA”) recently issued EBSA Disaster Relief Notice 2020-01. Notice 2020-01 applies to employee benefit plans, employers, labor organizations, and other plan sponsors, plan fiduciaries, participants and beneficiaries, and service providers subject to ERISA. Notice 2020-01 remains in effect from March 1, 2020 until 60 days after the announcement of the end of the presidentially declared national emergency due to COVID-19 (the “National Emergency”). Untimely Notice Relief Fiduciaries of ERISA plans generally have an obligation to provide notices and disclosures in accordance with the timing requirements of ERISA. However, under Notice 2020-01, the employee benefit plan and the responsible plan fiduciary will not be considered to violate ERISA for failing to timely furnish a notice, disclosure, or document that must be furnished between March 1, 2020 and 60 days after the announced end of the National Emergency, if the plan and responsible fiduciary act in… Continue Reading

2019 FSA Claims Submission Deadlines Suspended

Many employer-sponsored flexible spending arrangements (“FSAs”) have a claims submission deadline in March 2020 for the 2019 plan year. Some FSA vendors have contacted employers about extending those claims submission deadlines to later in the summer because participants could be delayed in submitting claims due to the COVID-19 pandemic. Generally, claims submission deadlines are set by plan design and are not regulated. However, the U.S. Departments of Labor and Treasury recently issued a notice suspending the deadline for submitting claims under all employee welfare benefit plans and employee pension benefit plans. The time period from March 1, 2020 until 60 days after the end of the national emergency or other date announced by the government (“Outbreak Period”) is disregarded in determining whether the deadline to submit a claim was met. The notice did not specifically address how the suspended deadlines are supposed to work for FSAs. Arguably, if the deadline… Continue Reading

Employers Take Note of Suspended COBRA Deadlines due to COVID-19

The U.S. Departments of Labor and the Treasury recently issued a joint notice promulgating final rules that take effect immediately upon publication in the Federal Register (the “Notice”). The Notice suspends a number of deadlines for employer-sponsored, group health plans, including deadlines under COBRA. The extension period is from March 1, 2020 until 60 days after the federal government announces the end of the COVID-19 national emergency or other date announced by the DOL (the “Outbreak Period”). The Outbreak Period is disregarded in determining whether the following COBRA deadlines have been met: (i) the date by which an individual must notify the plan of a COBRA qualifying event or disability determination, (ii) the 60-day period to elect COBRA coverage, and (iii) the deadline to make COBRA premium payments. Group health plans were also offered relief via the suspension of the deadline for providing COBRA election notices to COBRA qualified beneficiaries.… Continue Reading

Extension of Certain Timeframes for Employee Benefit Plans

On April 29, 2020, the U.S. Departments of Labor and the Treasury (together, the “Departments”) issued a notice (the “Notice”) requiring that all group health plans, disability and other types of employee welfare benefit plans, and employee pension benefit plans, subject to ERISA and the Internal Revenue Code, must disregard the period from March 1, 2020 until 60 days after the announced end of the COVID-19 National Emergency or such other date as announced by the Departments in a future notice (the “Outbreak Period”) for the following periods and dates: The 30-day period (or 60-day period, if applicable) to request HIPAA special enrollment; The 60-day election period for COBRA continuation coverage; The date for making COBRA premium payments; The date for individuals to notify the plan of a COBRA qualifying event or determination of disability; The date within which individuals may file a benefit claim under the plan’s claims procedures;… Continue Reading

SBC Relief for COVID-19 Coverage or Telehealth Changes to Group Health Plans

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

Employee Benefits as Payroll Costs under the Paycheck Protection Program

Businesses that received a loan under the Paycheck Protection Program (“PPP”) are eligible for forgiveness of that loan if, among other things, the loan proceeds are used to cover “payroll costs” incurred over the eight-week period after the loan is made. Payroll costs, capped at $100,000 on an annualized basis for each employee (i.e., $15,384 over the eight-week period), are broadly defined to include, among other things: Salary, wages, commissions, or tips; Employee benefits costs, such as for vacation or paid family or medical leave (other than wages for which a credit is received under the Families First Coronavirus Response Act), group health care costs, retirement plan contributions, and severance benefits; and State and local taxes assessed on employee compensation. As of the date of this posting, no guidance has been issued by the IRS or the Department of Treasury to further clarify what specific items qualify as payroll costs.… Continue Reading

Health and Welfare Issues and COVID-19: Reminder: Decrease in Pay/Hours Does Not Permit Dropping Health Plan Coverage If There is No Loss of Eligibility

As many employers reduce employees’ work hours, employers should consider that employees will remain responsible for their health plan contributions even though their pay is decreasing. As long as eligibility for coverage does not change, an employee is not permitted to change his or her health plan elections due solely to the decrease in pay or hours. One exception to this general rule is a change in status event created in connection with the Affordable Care Act, which provides that, in certain circumstances, an employee with reduced work hours may drop health plan coverage if the employee enrolls in other health plan coverage. Because the reduced pay may not cover all payroll deductions, employers should consider adopting a priority order for payroll deductions (e.g., health plan deductions are made before 401(k) plan deductions). In addition, an employer may want to consider a waiver of premiums, which is permitted if done… Continue Reading

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