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Editor's Note: This page is an archive of news items that appear in our daily email newsletters. To automatically receive the latest news items -- plus links to the latest jobs, press releases, webcasts and events -- subscribe to our daily email newsletters.

Trying to Solve the COVID-19 Crisis May Exacerbate the Future Retirement Crisis
Miller Johnson Link to more items from this source
Apr. 1, 2020

"In addition to there being many unanswered questions regarding these new provisions, the last thing most employers should want is for their employees to tap their retirement plan accounts to satisfy a short term cash flow problem.... [T]he participant will be selling assets at the worst possible time, whether the participant takes a distribution or a loan.... [P]articipants should be encouraged to continue to contribute to the Plan (even if the employer must suspend its contributions), since the best time to invest in assets like stocks is generally after a significant drop in the market.... This is also a good time for participants who can afford to do so to consider a Roth conversion."

Unraveling U.S. Retirement Savings: How a Global Pandemic Threatens to Undo Decades of Planning
Bryan Cave Leighton Paisner LLP Link to more items from this source
Apr. 1, 2020

"[P]lan sponsors should pause before adopting the new in-service withdrawal and loan options wholesale. The options made available under the CARES Act are permissive, not required. Implementing a thoughtful, needs-based, COVID-19 withdrawal/loan policy could protect employees' financial security for decades to come. Plan sponsors can adopt an incremental approach to COVID-19 in-service withdrawals or loans, and should consider doing so in the interest of helping participants not decimate hard-won savings[.]"

Judge's Decision Halts Dallas from Enforcing Paid Sick Leave Ordinance
Jackson Lewis P.C. Link to more items from this source
Apr. 1, 2020

"Judge Jordan acknowledged that the decision 'issues at a time when the American public and federal, state, and local authorities are confronted with the unprecedented public health crisis and economic upheaval caused by Coronavirus Disease 2019 ('COVID-19').' But, he concluded, under Texas law, the public policy issue of whether the government should impose paid sick leave requirements on private employers is a decision for the Texas legislature." [ESI/Employee Solutions, L.P. v. City of Dallas, No. 19-570 (E.D. Tex. Mar. 30, 2020)]

CARES Act for Retirement and Health Plan Sponsors
Maynard Cooper & Gale Link to more items from this source
[Guidance Overview]
Apr. 1, 2020

"Due to the urgency of the current situation, your retirement plan service provider may accelerate the decision-making process by treating these distributions as an automatic plan feature ... [It] is paramount that plan sponsors connect with their service providers as soon as possible to determine how their plans will address these distributions.... Effective March 27, 2020, employers with a high-deductible health plan (HDHP) and accompanying [HSA] can provide coverage for telehealth services before a participant reaches his or her deductible without disqualifying them from being eligible to contribute to their HSA."

CARES Act Expands Requirements for Health Plans
Ice Miller LLP Link to more items from this source
[Guidance Overview]
Mar. 31, 2020

"Plans are already obligated to cover both evidence-based items and services with ratings of 'A' or 'B' and immunizations with recommendations from the Advisory Committee on Immunization Practices.... Under the ACA, plans normally have a year or more to implement newly recommended preventive services. The effect of the new requirement is to clarify that health plans must cover these services within 15 business days after the date a recommendation is made if the services are intended to prevent or mitigate coronavirus. This means that health plans must stay alert and informed throughout the COVID-19 public health emergency, as preventive services can be expected to receive approval on a rolling basis as new evidence emerges."

Minimizing the Risk of ERISA Litigation in a Turbulent Economic Climate
Proskauer Link to more items from this source
Mar. 31, 2020

"Recent swings have seen historic losses in market prices, and although all investments are feeling the hit and some slightly rebounded after Congress passed the $2.2 trillion CARES Act, some will be more adversely affected than others. This is precisely the environment in which plaintiffs can make hindsight accusations against ERISA plan fiduciaries for offering allegedly imprudent investment options.... [T]here are some types of investments that are considerably more likely to be the target of claims under ERISA."

Topics to Understand When Selling Company Stock to Raise Cash Link to more items from this source
Mar. 31, 2020

"[1] Understand capital gains tax basics to generate capital losses ... [2] Clearly identify the lot of shares you want to sell ... [3] Watch out for wash sales ... [4] Job loss? Carefully follow your company's post-termination stock option exercise rules ... [5] Know your company's rules for ESPP contributions ... [6] Be mindful of holding periods for ESPPs and ISOs ... [7] Beware of insider trading."

ARA Letter to EBSA Requesting Deadline Relief Due to Impact of COVID-19 Pandemic (PDF)
American Retirement Association [ARA] Link to more items from this source
Mar. 31, 2020

"[ARA believes] that the ongoing and likely future impacts of the current COVID-19 (Coronavirus) pandemic will impede efforts by plan sponsors and service providers to comply with [ERISA] ... [and that] reasonable relief relating to certain ERISA notice and disclosure requirements is appropriate. The enclosed table summarizes the requirements for which we believe extensions of 90-120 days are warranted."

Act Now to Determine Treatment of COVID-19 Sick and Leave Pay Under Your Retirement Plan
Warner Norcross & Judd LLP Link to more items from this source
Mar. 31, 2020

"Starting April 1, 2020, certain employees are entitled to receive sick pay and leave pay related to COVID-19 ... Whether these new sick and leave payments are compensation for contribution and accrual purposes depends on the plan's definition of creditable or plan compensation.... The answer may be different for every plan." [Editor's note: this issue is currently being discussed in a thread on our message boards.]

New York State Releases FAQs on New COVID-19 Leave Law
Epstein Becker Green Link to more items from this source
[Guidance Overview]
Mar. 31, 2020

"[L]eave periods under the Law refer to calendar days, not business days, but when granting paid leave, employers are required to pay the amount of money that the employee would have otherwise received during the five- or 14-day period.... [O]nly employees who are under a mandatory or precautionary quarantine order, and are not able to work from home through remote access or other means, are eligible for leave under the Law.... The FAQs also address the Law's interaction with other forms of paid leave to which an employee may be entitled."

COVID-19 and Impact on Health Savings Accounts and Flexible Spending Accounts
TRI-AD Link to more items from this source
Mar. 31, 2020

"How does COVID-19 affect an HSA? ... Are expenses related to COVID-19 eligible for reimbursement in a HCFSA? ... Can an employee change their HCFSA annual election due to COVID-19 issues? ... Can an employee change their DCFSA annual election due to COVID-19 issues? ... Can dependent care expenses be incurred and eligible for reimbursement if a parent is home and not working during a mandated employer work suspension? ... What if an employee is working remotely and incurs day care costs?"

Employers Unable to Submit Forms 1094-C and 1095-C to IRS Due to AIR System Being Down
Accord Link to more items from this source
Mar. 31, 2020

"Over the past few days Accord Systems has experienced significant trouble trying to submit the Forms 1094-C and 1095-C to the [IRS ACA Information Returns (AIR) system] on our clients' behalf. While we have experienced difficulties in previous years, 2019 has presented a host of unique problems.... The remainder of this article summarizes what we learned and discusses what an employer should do in light of the March 31, 2020 deadline to electronically submit the Forms 1094-C and 1095-C to the IRS."

Editor's Pick COVID-19 Employee Benefit and Executive Compensation Questions and Answers
Haynes and Boone, LLP Link to more items from this source
[Guidance Overview]
Mar. 31, 2020

"[1] Should benefits coverage continue while an employee is on an unpaid furlough? ... [2] If an employee is off work because he or she has been quarantined due to potential exposure to COVID-19, does this qualify as a disability for purposes of an employer's short-term disability (STD) and long-term disability (LTD) plans? ... [3] What tax-free payments can an employer make to its employees as 'qualified disaster relief'? ... [4] If an employer sponsors a nonqualified deferred compensation plan, could the employer suspend, reduce, or eliminate the employer's contribution to, or terminate, the plan during the year? ... [5] Can employees' contributions to a nonqualified deferred compensation plan be suspended during the year, or can they take hardship withdrawals from the plan? ... [6] Would expenses incurred by employees qualify as 'financial hardships' eligible for hardship withdrawals under a qualified retirement plan? ... [7] Can a plan sponsor suspend, reduce, or eliminate matching and other contributions under qualified retirement plans (including safe harbor plans) mid-year? ... [8] Can a plan sponsor freeze or terminate its defined benefit or cash balance plan? ... [9] What is the effect of the current market and interest rate down turn on the funded status of defined benefit pension plans?"

Eighth Circuit Rules on ERISA's Church Plan Exemption
Jackson Lewis P.C. Link to more items from this source
Mar. 31, 2020

"The focus in Sanzone (as in other post-Advocate 'church plan' cases) is on whether a hospital's internal benefits committee constitutes a principal purpose organization. Consistent with rulings by other courts, the Eighth Circuit said yes, applying ordinary meanings to the statutory terms 'maintain' and 'organization.' " [Sanzone v. Mercy Health, No. 18-3574 (8th Cir. March 27, 2020)]

COVID-19 Impact on U.S. Retirement Plans (PDF)
Buck Link to more items from this source
Mar. 31, 2020

10 pages. "At this time it is critical that [retirement] programs continue to function and fulfill their important role in society as many will depend on them to provide much needed financial security. This reference document addresses the potential disruptions to employer sponsored retirement programs.... [1] Plan sponsor processes ... [2] Pension plan administration ... [3] Governance ... [4] Investment ... [5] Defined contribution plans ... [6] Funding."

Puerto Rico Treasury Department Extends Tax Exemptions for COVID-19 Employer-Provided Payments and Amends Rules for Qualified Retirement Plan and IRA Distributions
Littler Link to more items from this source
[Guidance Overview]
Mar. 31, 2020

"CC RI 20-23 amends Internal Revenue Circular Letter 20-09 (CC RI 20-09), which provided special rules and procedures applicable to distributions from qualified retirement plans and individual retirement accounts (IRAs) following the recent earthquakes in Puerto Rico, to incorporate, as part of the definition of 'Eligible Expenses,' those related to the COVID-19 emergency."

Editor's Pick The CARES Act: Plan Sponsor Action Items
Wilkins Finston Friedman Law Group LLP Link to more items from this source
[Guidance Overview]
Mar. 31, 2020

"[1] Prepare communications to participants to inform them of the availability of Coronavirus-related Distributions, along with information re eligibility, requesting, taxation, and repayment of the distributions; [2] Coordinate with the parties who make plan distributions ... to make the necessary adjustments to those processes for Coronavirus-related Distributions ... [3] [D]ecide whether to ... allow for the more liberalized loan provisions ... [and] coordinate with the plan recordkeeper to implement them ... [4] Prepare communications to the subset of affected participants to inform them of the suspension of 2020 RMDs."

Editor's Pick CARES Act Action Items for Retirement Plan Sponsors (PDF)
Trucker Huss Link to more items from this source
[Guidance Overview]
Mar. 31, 2020

"A careful review of your retirement plan's procedures and plan administrator's constraints should be conducted to determine if any platform changes are required in order to implement the applicable CARES Act provision(s) ... Participant communications should be prepared and distributed to properly inform participants of any operational changes under your retirement plan(s) ... and any additional steps that participants will have to take in order to take advantage of any such changes."

CARES Act Provisions Affecting Welfare Benefit Plans
Stevens & Lee Link to more items from this source
[Guidance Overview]
Mar. 31, 2020

"[1] Over-the-counter drugs and medicines may be reimbursable from FSAs and HSAs ... [2] Employers can pay employees' student loans on a tax-free basis ... [3] COVID-19 testing and services must be provided without cost sharing ... [4] Telehealth ... [5] Out-of-network providers reimbursement."

Federal Government CARES (Act) About ESOPS
Kaufman & Canoles, P.C. Link to more items from this source
[Guidance Overview]
Mar. 31, 2020

"ESOP-owned companies, like all impacted businesses, are entitled to apply for and take out an SBA PPP loan to cover its 'payroll costs' and other approved expenses.... ESOP-owned companies can also use the proceeds to cover their contributions for retirement plans -- ESOP contributions as well as 401(k) plan contributions."

Retirement Plan Provisions in the Coronavirus Stimulus Bill
River and Mercantile Solutions Link to more items from this source
Mar. 31, 2020

"[1] Pension plan contribution deadline extension  ... [2] Tax relief and repayment flexibility for retirement plan distributions and loans ... [3] Regulatory power to delay ERISA deadlines due to COVID-19 ... [4] Required minimum distributions from individual account plans suspended for 2020 ... [5] AFTAP relief for plan years that include calendar year 2020."

Safeguarding Participant Contributions to Your 401(k) Plan
Fox Rothschild LLP Link to more items from this source
Mar. 31, 2020

"[A]ny ability to defer or eliminate 401(k) contributions applies to employer contributions only. Under no circumstances, may an employer defer participant contributions to a 401(k) Plan.... Penalties for violating these requirements can be severe."

Group Health Plan and Cafeteria Plan Issues Related to COVID-19
Hanson Bridgett LLP Link to more items from this source
[Guidance Overview]
Mar. 31, 2020

"[1] Can employers allow changes to employee elections under their ... section 125 cafeteria plans to reflect changes in circumstances due to COVID-19? ... [2] Are there special privacy issues under [HIPAA] that apply to an employer's group health plan with respect to COVID-19? ... [3] Has the IRS changed the employer shared responsibility payment (ESRP) rules under the ACA for employers that reduce employees' hours of work because of the COVID-19 emergency? ... [4] Has the IRS extended the March 31, 2020 deadline for filing ACA Forms 1094-C and 1095-C regarding coverage provided in 2019?"

CARES Act Impacts for Employer-Sponsored Health and Welfare Benefit Plans
Akerman Link to more items from this source
[Guidance Overview]
Mar. 31, 2020

"The CARES Act mandates that all providers of COVID-19 diagnostic tests publish the price of the testing services online. Providers who fail to comply with the publishing requirement are subject to a fine of up to $300 per day.... For plan years beginning on or before December 31, 2021, a plan will not fail to be a high deductible health plan [HDHP] (and a participant will not be disqualified from contributing to an HSA) by reason of failing to charge a deductible for 'telehealth and other remote care services.' "

Healthcare Employers Spared Burden of FFCRA Under DOL Guidance
Holland & Hart LLP Link to more items from this source
[Guidance Overview]
Mar. 31, 2020

"DOL's Q&A greatly expanded the definitions of healthcare provider and emergency responder to permit employers to exclude a broad cross-section of employees from the leave rights ... DOL encourages employers of healthcare providers and emergency responders to be 'judicious' when excluding employees from the leave rights under the Act because of the overarching need to minimize the spread of the virus."

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