New Requirement for Group Health Plans and Insurance Companies to Cover At-Home COVID-19 Testing Costs Effective Saturday, January 15th
Beginning January 15, 2022, insurance companies and group health plans will be required to cover the cost of over-the-counter, at-home COVID-19 tests authorized by the Food and Drug Administration (“OTC Tests”) that are purchased on or after that date. Health plans and insurance companies must provide coverage for up to eight individual OTC Tests per month for each enrolled individual (e.g., a family of four will be covered for up to 32 OTC Tests per month). If the health plan or insurer sets up a network of preferred locations for participants to obtain OTC Tests with no up-front cost, then the health plan and/or insurer may limit the amount it reimburses for OTC Tests purchased outside such network to $12 per test (or the actual cost of the OTC Test, if lower). Otherwise, the health plan and/or insurer must reimburse the full cost of the OTC Test. FAQs issued by… Continue Reading
The IRS recently issued a news release reminding retirement plan participants that required minimum distributions (“RMDs”) must be made by December 31st. RMDs are minimum amounts that must be distributed to a retirement plan participant each year beginning with the year in which such participant attains age 72 (age 70½ if the participant attained 70½ before January 1, 2020) or, if later, the year in which the participant retires. If the participant is a 5% owner of the employer sponsoring the retirement plan, RMDs must begin once the participant attains age 72 (or 70½ if the participant attained age 70½ before January 1, 2020), regardless of retirement status. The CARES Act waived the RMD requirement for 2020, including the RMD that was payable on or before April 1, 2021, for a participant with a required beginning date of April 1, 2021. A participant who attained age 70½ in 2019 (the… Continue Reading
Agencies Issue FAQs Clarifying Wellness Program and Other Health Plan Requirements Related to COVID-19 Vaccines
The DOL, Treasury Department, and HHS have jointly issued a set of FAQs that provide helpful clarifications regarding certain requirements under the CARES Act, the HIPAA nondiscrimination rules (the “Nondiscrimination Rules”), and the Affordable Care Act (the “ACA”) related to COVID-19 vaccines (“Vaccines”). Wellness Programs under the Nondiscrimination Rules Among other items, the FAQs provide guidance under the Nondiscrimination Rules regarding an employer’s imposition of a premium discount under a wellness program for an individual’s receipt of a Vaccine. If the wellness program is itself, or is part of, a group health plan that is not otherwise exempt from the Nondiscrimination Rules, the FAQs confirm that a premium discount would constitute a “health-contingent, activity-only” wellness program that must, among other requirements, offer a “reasonable alternative standard” to qualify for the discount for individuals for whom it is unreasonably difficult due to a medical condition, or medically inadvisable, to receive the… Continue Reading
The IRS recently released proposed regulations related to excess employment tax credits claimed by employers under the American Rescue Plan Act of 2021. Specifically, the proposed regulations clarify that any paid sick and family leave credits or employee retention tax credits that were refunded or credited to an employer in excess of the credits the employer was actually entitled to claim will be treated as an underpayment of the applicable employment taxes that will be collected by the IRS in accordance with its customary assessment and collection procedures. For additional information on the requirements and limitations related to these employment tax credits, please see our prior blog posts here, here, and here. The proposed regulations are available here.
The IRS recently released Notice 2021-49 (the “Notice”), which provides additional guidance for employers who are claiming the employee retention tax credit for the third and fourth quarters of 2021 based on enhancements to the tax credit enacted in the American Rescue Plan Act of 2021 (the “ARPA”). The ARPA extended the employee retention tax credit for “qualified wages” paid to employees between July 1st and December 31st of 2021, and the Notice clarifies that the rules applicable to claiming the enhanced employee retention tax credit under the ARPA are generally the same as those for claiming the credit under the CARES Act. The Notice provides additional guidance on several miscellaneous issues with respect to the credit and also responds to questions received by the IRS related to the credit, including, among others: The definition of full-time employee and whether that definition includes full-time equivalents; The treatment of tips as… Continue Reading
In Notice 2020-46, the IRS provided guidance regarding cash payments made by employers to certain charitable organizations for the relief of COVID-19 victims under employer-sponsored, leave-based donation programs (see our prior blog post about Notice 2020-46 here). Under such donation programs, an employee could elect to forgo paid vacation, sick, or personal leave in exchange for cash payments made by his or her employer to qualifying charitable organizations for the relief of COVID-19 victims, without having such amounts being included in his or her taxable gross income. Under Notice 2020-46, such cash payments had to be made before January 1, 2021; however, in Notice 2021-42, the IRS extended this relief period to include qualifying cash payments that are made after December 31, 2020 and before January 1, 2022. Notice 2021-42 is available here.
Recent guidance issued by the U.S. Equal Employment Opportunity Commission (the ?Ç£EEOC?Ç¥) addresses many common employment issues regarding COVID-19 vaccinations, including the applicability of certain federal laws such as the Americans with Disabilities Act (the ?Ç£ADA?Ç¥), the Genetic Information Nondiscrimination Act, and Title VII of the of the Civil Rights Act (?Ç£Title VII?Ç¥). In accordance with this EEOC guidance, an employer may require employees who are physically entering the workplace to be vaccinated for COVID-19, subject to certain ?Ç£reasonable accommodations?Ç¥ under the ADA and Title VII for employees who are unable to get vaccinated due to a covered disability, pregnancy, or sincerely held religious belief, practice, or observance. The guidance provides a list of examples of reasonable accommodations, such as requiring the use of face masks, social distancing, working modified shifts, periodic testing for COVID-19, and giving employees the opportunity to telework or accept a reassignment. In addition, an employer… Continue Reading
As we previously reported here, the American Rescue Plan Act of 2021 (?Ç£ARPA?Ç¥) provides a 100% COBRA premium subsidy to any qualified beneficiary who is entitled to COBRA coverage due to an involuntary termination of employment or reduction in hours of employment. Employers will receive a tax credit for the cost of COBRA premiums for April 1 to September 30, 2021. The IRS recently issued FAQs addressing many issues related to the subsidy, including: (i) subsidy eligibility, (ii) what qualifies as a reduction in hours or an involuntary termination of employment, (iii) the type of coverage eligible for the subsidy, (iv) when the subsidy period begins and ends, (v) the extended election period, (vi) coordination with the extended deadlines due to the COVID national emergency (?Ç£Outbreak Period Extensions?Ç¥), (vii) payments to insurers, (viii) application to state continuation coverage, and (ix) calculation and claiming of the subsidy tax credit. One of… Continue Reading
During the pandemic, many employers laid off and terminated employees as businesses shut-down and then rehired employees when businesses reopened. Employers who sponsored retirement plans and incurred these fluctuations in their workforce risked that the layoffs and terminations could trigger partial retirement plan terminations, which would require 100% vesting of affected participants. Whether a partial plan termination has occurred is generally based on the facts and circumstances, but there is a rebuttable presumption that a partial plan termination has occurred if 20% or more of a plan?ÇÖs active participants have had an employer-initiated termination within a given plan year. In September of 2020, the IRS issued FAQs to clarify that when an employee was terminated and rehired within 2020, they would not be counted for purposes of determining whether a partial plan termination occurred (we reported on this guidance here). Section 209 of the Taxpayer Certainty and Disaster Tax Relief… Continue Reading
The DOL?áissued new model notices that may be used in connection with COBRA premium assistance requirements under the American Rescue Plan Act of 2021 (?Ç£ARPA?Ç¥). These model notices include (i) an ARPA General Notice, (ii) a Notice in Connection with Extended Election Periods, (iii) an Alternative Notice, and (iv) a Notice of Expiration of Period of Premium Assistance. The DOL also issued a Summary of ARPA requirements, which the DOL states should be included with the ARPA General Notice, the Alternative Notice, and the Notice in Connection with Extended Election Periods. Use of the model notices is not required. The ARPA General Notice (or its equivalent) should be sent to each COBRA qualified beneficiary (?Ç£QB?Ç¥) who experiences a COBRA qualifying event from April 1, 2021 through September 30, 2021. The FAQs issued in conjunction with the model notices state that the ARPA General Notice must be sent only to those… Continue Reading