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<< Older News  |  April 4, 2020

News

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CARES Act Suspension of Loan Repayments -- Is It Employer's Choice or the Participant's Choice?
Business of Benefits Link to more items from this source
Apr. 3, 2020

"The statute seems to make the suspension mandatory; yet ... there's a legal problem with this, given loans are existing, valid contracts under state law; ... Did the IRS recognize this issue and try to fix it by claiming that the employer has the choice, because of its ability to change the loan policy under the plan? You know that there will be 'curmudgeonly' employers out there who will NOT approve the suspension. [The author] would think that the IRS could not tax that loan as being defaulted, even though it was reported as such on a 1099."

Tags: Coronavirus (COVID-19)  •  Retirement Plan Admininstration

Jarvis Appeals Unsuccessful Challenge to CalSavers Auto-IRA Decision
American Retirement Association [ARA] Link to more items from this source
Apr. 3, 2020

"The Howard Jarvis Taxpayers Association has filed ... [a notice of] appeal of a decision last month which held that that the Golden State's auto-IRA program for private sector workers is neither an employee benefit plan nor does it relate to an ERISA plan, and therefore was not preempted by ERISA.' [Howard Jarvis Taxpayers Ass'n v. The California Secure Choice Retirement Savings Program, No. 18-1584 (E.D. Cal. Mar. 10, 2020)]

Tags: Retirement Plan Policy

COVID-19 and Health Plan Experience: A Framework for Developing Cost Projections
Mercer Link to more items from this source
Apr. 3, 2020

"Among the many financial consequences of the COVID-19 pandemic on US businesses will be its impact on 2020 self-insured health plan costs.... [R]eviewing multiple future-state scenarios will be essential as the situation evolves both in the macro environment and in your own organization. To update your 2020 claims estimate, you will need to start with your current 2020 estimate and make three adjustments."

Tags: Coronavirus (COVID-19)  •  Misc. Health Plan Costs

Text of Additional DOL Q&As on the Families First Coronavirus Response Act (FFCRA)
Wage and Hour Division [WHD], U.S. Department of Labor [DOL] Link to more items from this source
[Official Guidance]
Apr. 3, 2020

Updated Apr. 3, 2020, to add Q&As 60–79 to the prior version:

  1. How do I know if I can receive paid sick leave for a Federal, State, or local quarantine or isolation order related to COVID-19? ...
  2. When am I eligible for paid sick leave to self-quarantine? ...
  3. I am an employee. I become ill with COVID-19 symptoms, decide to quarantine myself for two weeks, and then return to work. I do not seek a medical diagnosis or the advice of a health care provider. Can I get paid for those two weeks under the FFCRA? ...
  4. When am I eligible for paid sick leave to care for someone who is subject to a quarantine or isolation order? ...
  5. Can I take paid sick leave to care for any individual who is subject to a quarantine or isolation order or who has been advised to self-quarantine? ...
  6. When am I eligible for paid sick leave to care for someone who is self-quarantining? ...
  7. May I take paid sick leave or expanded family and medical leave to care for my child who is 18 years old or older? ...
  8. What is a "place of care"? ...
  9. Who is my "child care provider"? ...
  10. Can more than one guardian take paid sick leave or expanded family and medical leave simultaneously to care for my child whose school or place of care is closed, or child care provider is unavailable, due to COVID-19 related reasons? ...
  11. My child's school or place of care has moved to online instruction or to another model in which children are expected or required to complete assignments at home. Is it "closed"? ...
  12. May I take paid sick leave to care for a child other than my child? ...
  13. May I take expanded family and medical leave to care for a child other than my child? ...
  14. When am I eligible for paid sick leave based on a "substantially similar condition" specified by the U.S. Department of Health and Human Services? ...
  15. If I am a staffing company, how do I count internal workers and staffed workers under the FFCRA? ...
  16. As an employer, how much do I pay a seasonal employee with an irregular schedule for each day of paid sick leave or expanded family and medical leave that he or she takes? ...
  17. May I take paid sick leave or expanded family and medical leave if I am receiving workers' compensation or temporary disability benefits through an employer or state-provided plan? ...
  18. May I take paid sick leave or expanded family and medical leave under the FFCRA if I am on an employer-approved leave of absence? ...
  19. Will DOL begin enforcing FFCRA immediately? ...
  20. Does the non-enforcement position mean businesses do not need to comply with the FFCRA from the effective date of April 1, 2020 through April 17, 2020? ...

Tags: Coronavirus (COVID-19)  •  Family and Medical Leave Benefits, Incl. FMLA

Before You Take That Retirement Plan Withdrawal...
Cammack Retirement Group Link to more items from this source
Apr. 3, 2020

"Withdrawals turn 'paper' losses into actual losses.... Withdrawals destroy the magic that is compounding, particularly for younger participants.... Withdrawals are often just a band-aid for an underlying financial problem."

Tags: Coronavirus (COVID-19)  •  Retirement Plan Information for Employees

DOL Publishes Temporary Regs Interpreting FFCRA
Davis Wright Tremaine LLP Link to more items from this source
[Guidance Overview]
Apr. 3, 2020

"Among the more surprising provisions in the regulations is the [DOL's] expansive interpretation of what constitutes an 'order of quarantine or isolation' for the purposes of an employee qualifying for the two weeks of sick leave ... This is a marked departure from previous law and triggers a careful (and sometimes complicated) factual analysis ... [It] is not the case that every individual working in a jurisdiction subject to a 'shelter in place' order is automatically entitled to two weeks of sick leave under the EPSLA."

Tags: Coronavirus (COVID-19)  •  Family and Medical Leave Benefits, Incl. FMLA

DOL Temporary Rule Provides Definitive Guidance on Small Business Exemption to FFCRA
McAfee & Taft Link to more items from this source
[Guidance Overview]
Apr. 3, 2020

"Small employers are not exempt from paying up to 80 hours of full or partial sick leave to an employee who requires it for himself or to care for a covered individual due COVID-19 related reasons. The small business exemption is narrow in scope and relates only to sick leave and expanded FMLA necessitated by lack of child care as a result of COVID-19 reasons."

Tags: Coronavirus (COVID-19)  •  Family and Medical Leave Benefits, Incl. FMLA

SEC Says Coronavirus Will Not Delay Reg BI, Form CRS
planadviser Link to more items from this source
Apr. 3, 2020

"[SEC] Chairman Jay Clayton has publicly confirmed that the June 30 deadline for compliance with the SEC’s Regulation Best Interest (Reg BI) rulemaking package remains in effect.... Clayton notes that, over the past 10 months, the SEC has engaged extensively with broker/dealers, investment advisers, retail investors and other market participants, as well as FINRA and other regulatory partners, regarding the implementation of Reg BI and the associated Form CRS."

Tags: Coronavirus (COVID-19)  •  Fiduciary Duties  •  Retirement Plan Investments: Misc. Issues

COVID-19 Takes Bite Out of U.S. Corporate Pension Plans
Willis Towers Watson Link to more items from this source
Apr. 3, 2020

"The funded status of the nation's largest corporate pension plans fell by eight percentage points during the first quarter of 2020, driven primarily by declines in equity markets ... [P]ension plan data for 376 Fortune 1000 companies ... indicate the aggregate pension funded status is estimated to be 79% as of March 31, 2020, compared with 87% at the end of 2019. That's the lowest funded status plans have experienced since 2012, when the year-end funded status stood at 77%."

Tags: Coronavirus (COVID-19)  •  Funding of Defined Benefit Pension Plans

Temporary FFCRA Regs Clarify FFCRA Leave Rules
Fox Rothschild LLP Link to more items from this source
[Guidance Overview]
Apr. 3, 2020

"The regulations also emphasize that employees subject to shelter-in-place orders may not take paid sick leave if they are able to telework, provided that there is work for the employee to do, the employer allows the employee to telework and there are no extenuating circumstances that prevent the employee from performing that work."

Tags: Coronavirus (COVID-19)  •  Family and Medical Leave Benefits, Incl. FMLA

DOL Rolls Out FFCRA Regs as New Leave Requirements Go Into Effect
Ice Miller LLP Link to more items from this source
[Guidance Overview]
Apr. 3, 2020

"[An] employee is only entitled to up to 80 hours of leave under the EPSLA, regardless of the number of employers for whom the employee works between April 1 and December 31, 2020. In other words, if an employee takes a portion of the EPSLA leave while working with one employer and then changes employers, the second employer only needs to provide the remainder of the leave to the employee, not the full 80 hours."

Tags: Coronavirus (COVID-19)  •  Family and Medical Leave Benefits, Incl. FMLA

DOL Issues Regs Interpreting FFCRA Expanded FMLA and Paid Sick Leave Laws
Constangy, Brooks, Smith & Prophete LLP Link to more items from this source
[Guidance Overview]
Apr. 3, 2020

"The employer does not have to pay for hours that a teleworking employee fails to report unless the employer knew or had reason to know that the employee was working. If an employee is teleworking, of course he or she is not normally entitled to paid leave. However, if there is a disruption to the work in the remote workplace (the DOL uses the example of a power failure) that prevents the employee from working, the employee is entitled to paid leave for that time."

Tags: Coronavirus (COVID-19)  •  Family and Medical Leave Benefits, Incl. FMLA

Construction Company Workers Get Support in ESOP Appeal
Bloomberg Law Link to more items from this source
Apr. 3, 2020

"The Pension Rights Center waded into a dispute involving Choate Construction Co.'s employee stock ownership plan, urging the Fourth Circuit to revive the employees' lawsuit and recognize the 'special risks' these plans pose for workers.... The Choate employees allege they were forced to pay $198 million for company stock that may have been worth less than $65 million[.]" [Lee v. Argent Trust Co., No. 19-156 (E.D.N.C. Aug. 7, 2019; amicus brief to 4th Cir. filed Mar. 30, 2020)]

Tags: Employee Stock Ownership Plans (ESOPs)

DOL Issues Regs Implementing the New Emergency Paid Sick and Paid FMLA Law
FMLA Insights Link to more items from this source
[Guidance Overview]
Apr. 3, 2020

"[In] 124 pages of regulations, DOL extensively covers employer coverage, how small businesses may be exempted from the new law, regular rate calculations, intermittent leave, substitution of accrued paid leave with EPSL and FMLA+, employer/employee notice issues, and documents employees must provide to request a leave."

Tags: Coronavirus (COVID-19)  •  Family and Medical Leave Benefits, Incl. FMLA

COVID-19 Emergency Paid Leave and Other Leave-Related Benefits
Hanson Bridgett LLP Link to more items from this source
[Guidance Overview]
Apr. 3, 2020

"[1] Must employers continue to provide coverage under their group health plans while employees are on COVID-19 related paid sick leave or paid FMLA leave? ... [2] Can employers allow changes to employee elections under their ... section 125 cafeteria plans to reflect changes in circumstances due to COVID-19? ... [3] Can an employer establish catastrophic leave-sharing or disaster leave-sharing programs to allow employees to assist one another with COVID-19 situations?"

Tags: Coronavirus (COVID-19)  •  Family and Medical Leave Benefits, Incl. FMLA

Should You Withdraw From Your 401(k)?
InvestmentU Link to more items from this source
Apr. 3, 2020

"The best-case scenario that would make tapping into your 401(k) this year a financially responsible decision is if you expect that you will be able to repay those funds within three years. If you can do that, you will not have to pay tax on the withdrawal, and you will have essentially received a three-year interest-free loan. No harm, no foul. The reality, though, is that the next several months are going to be incredibly difficult for millions of Americans."

Tags: Coronavirus (COVID-19)  •  Retirement Plan Information for Employees

IRS Issues Guidance on Required Documentation Necessary to Obtain Tax Credits for FFCRA Paid Sick Leave and Emergency FMLA Leave
Vorys Link to more items from this source
[Guidance Overview]
Apr. 3, 2020

"The IRS Guidelines require that an employee must provide written documentation containing the following information before taking PSL or EFML: [1] employee's name; [2] date or dates for which leave is requested; [3] qualifying reason for the leave; and [4] statement that the employee is unable to work (either on-site or via telework) because of the qualified reason for leave. Employees must also provide additional documentation depending on the reason for taking the PSL or EFMLA[.]"

Tags: Coronavirus (COVID-19)  •  Family and Medical Leave Benefits, Incl. FMLA

New York Bill Would Require Immediate Relief for Employees Subject to Mandatory or Precautionary Quarantine or Isolation
Nixon Peabody LLP Link to more items from this source
[Guidance Overview]
Apr. 3, 2020

"The [proposed statute] protects employees by requiring employers to provide additional 'coronavirus-specific' paid sick leave to employees, and expanding the state's disability and paid family leave benefits to cover certain coronavirus-related leave.... [T]he new sick leave requirements purport to provide for a tiered approach for benefits based on the size of the employer."

Tags: Coronavirus (COVID-19)  •  Family and Medical Leave Benefits, Incl. FMLA

Will Workforce Cuts Cause Partial Terminations in DC Plans?
Callan Link to more items from this source
Apr. 3, 2020

"Generally, if the employer's turnover rate is at least 20% during the applicable time period, there is a presumption that a partial termination of the plan has occurred. The time period in question depends on the facts and circumstances of a situation ... Identifying a partial plan termination is important since the failure to recognize and act on it can cause disqualification of the entire plan."

Tags: Coronavirus (COVID-19)  •  Retirement Plan Admininstration

The ACA Look-Back Measurement Method and COVID-19
CBIZ Link to more items from this source
[Guidance Overview]
Apr. 3, 2020

"Federal agencies have not issued any guidance regarding the ACA's employer shared responsibility rules in light of the COVID-19 outbreak. As a result, the general rules for determining employee status apply."

Tags: Coronavirus (COVID-19)  •  Health Plan Design  •  Misc. Health Plan Administration Issues

April's San Francisco HCSO Reporting for 2019 Cancelled
ABD Insurance & Financial Services Link to more items from this source
[Guidance Overview]
Apr. 3, 2020

"[A] supplement ... to the Emergency Proclamation [states] that the work required to compile and report the data necessary would require some employers to engage in non-essential travel to their places of business and would place further economic strain on employers. Therefore, the standard April 2020 requirement for employers to report 2019 health care expenditures is waived.... [C]overed employers are still required to make any required health care expenditures to the City Option for the first quarter 2020 by April 30, 2020."

Tags: Coronavirus (COVID-19)  •  Misc. Health Plan Administration Issues

TDFs (and Plan Fiduciaries) in the Crosshairs: Investment Lessons from the Coronavirus (PDF)
Target Date Solutions Link to more items from this source
[Opinion]
Apr. 3, 2020

"It's hard to imagine that anything good could come out of a pandemic, but this one has exposed a scandal in retirement savings plans ... There are two fiduciary breaches that are scandalous: [1] Fiduciaries, namely investment advisors, are breaching their duty of loyalty by not vetting their TDF selection. Self interests are taking precedence over beneficiary interests, violating the SEC's Best Interest (BI) standard. And [2] Fiduciaries are breaching their duty of care by turning a blind eye to the risk near the retirement date in the TDFs they choose, exposing beneficiaries to excessive risk. Fiduciaries are responsible for harm that should have been avoided."

Tags: Coronavirus (COVID-19)  •  Fiduciary Duties  •  Retirement Plan Investments: Misc. Issues

Editor's Pick COVID-19 Special Enrollment in Group Health Plans
Wilkins Finston Friedman Law Group LLP Link to more items from this source
Apr. 3, 2020

"[M]any insurers are offering a 30-day special enrollment period (SEP) for their insured and self-funded group health plans.... [This] COVID-19 SEP does not qualify as a HIPAA special enrollment event nor a change in family status event under the section 125 cafeteria plan rules that would permit mid-year enrollment in a self-funded or fully-insured group health plan on a pre-tax basis.... The COVID-19 SEP poses additional issues for self-funded group health plans, especially ones that are subject to ERISA.... The stop loss policy may not cover participants who enroll during a COVID-19 SEP which means the plan sponsor would be fully liable for claims made by such participants."

Tags: Coronavirus (COVID-19)  •  Health Plan Design  •  Misc. Health Plan Administration Issues

Federal District Court Provides Mini-Primer on Choice of Law Issues to Determine the Standard of Review
Lane Powell PC Link to more items from this source
Apr. 3, 2020

"[M]any states have imposed statutes which affect which standard of review governs ERISA claim decisions. Many policies include a 'choice of law' provision, setting forth which state law will govern the standard of review. But what happens when the policy does not have a 'choice of law' provision? How does the court determine which state law governs the standard of review in ERISA claims?" [Byerly v. Standard Insurance Co., No. 18-592 (E.D. Tex. Mar. 25, 2020)]

Tags: ERISA Preemption of State and Local Laws  •  Misc. Health Plan Administration Issues

DOL Annual Report to Congress on Self-Insured Group Health Plans (PDF)
U.S. Department of Labor [DOL] Link to more items from this source
Apr. 3, 2020

18 pages. "Approximately 57,800 group health plans filed a Form 5500 for 2017, an increase of more than 3 percent from the number of plans that filed a Form 5500 for 2016. Of plans that filed a 2017 Form 5500, about 23,500 were self-insured and 3,800 mixed self-insurance with insurance (mixed-insured). Self -insured group health plans that filed a Form 5500 covered approximately 34 million participants in 2017 and held assets totaling about $95 billion." [Also released: Appendix A: Abstract of 2017 Form 5500 Annual Reports Reflecting Statistical Year Filings, and Appendix B: Self-Insured Health Benefit Plans 2020, Based on Filings Through Statistical Year 2017.]

Tags: Health Plan Design


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