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COVID-19 EMPLOYEE BENEFIT AND EXECUTIVE COMPENSATION QUESTIONS AND ANSWERS

In light of the recent economic developments stemming from the COVID-19 pandemic, many employers are evaluating their employee benefit plans and how employee and employer costs will be impacted. The following summary provides a list of questions we have been receiving from clients over the past week, along with action items to help employers address these issues. Health and Welfare Plans and Fringe Benefits Should benefits coverage continue while an employee is on an unpaid furlough? If so, how would the employee pay the employee?ÇÖs portion of the premium? Could the employee elect to drop coverage due to the reduction in hours of active service? Could the employer pay for coverage for some or all of its furloughed employees? Continued eligibility for benefits will depend on whether the employer treats the furlough as a termination of employment or as an unpaid leave of absence. The terms of the plan, including… Continue Reading

New HRA Option for Employers in 2020 May Avoid ACA Employer Penalties

New proposed rules have been issued by the federal Departments of the Treasury, Labor, and Health and Human Services that permit employers to offer health reimbursement arrangements (?Ç£HRAs?Ç¥) to employees who are enrolled in individual health insurance coverage. An employee could use such an HRA to pay the employee?ÇÖs premiums for individual health insurance and other medical expenses. The same HRA must be offered to an entire ?Ç£class?Ç¥ of employees, and a traditional group health plan could not be offered to that class. Classes of employees include full-time, part-time, seasonal, union, employees in a waiting period, employees under age 25, non-resident aliens with no U.S. income, employees in the same insurance rating area, or a combination of those classes. The HRA contribution could increase with age, reflecting the fact that health coverage for older employees is generally more expensive, and the IRS will provide an approach for varying contributions by… Continue Reading

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