Health & Welfare Plans Newsletter

April 1, 2020

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View Coronavirus (COVID-19) News and Resources
View Coronavirus (COVID-19) Webcasts

[Official Guidance]

Text of IRS FAQS: COVID-19-Related Tax Credits for Required Paid Leave Provided by Small and Midsize Businesses

"The FFCRA provides that employers subject to the EPSLA and the Expanded FMLA paid leave requirements are entitled to fully refundable tax credits to cover the cost of the leave required to be paid for these periods of time during which employees are unable to work (which for purposes of these rules, includes telework). Certain self-employed persons in similar circumstances are entitled to similar credits.... [These FAQs] provide more detailed information regarding the requirements, limitations, and application of the paid leave credits."

  • Basic FAQs (#1-19)
  • Determining the Amount of the Tax Credit for Qualified Sick Leave Wages (#20-24)
  • Determining the Amount of the Tax Credit for Qualified Family Leave Wages (#25-30)
  • Determining the Amount of Allocable Qualified Health Plan Expenses (#31-36)
  • How to Claim the Credits (#37-43)
  • How Should an Employer Substantiate Eligibility for Tax Credits for Qualified Leave Wages? (#44-46)
  • Periods of Time for Which Credits are Available (#47-48)
  • Special Issues for Employers: Taxation and Deductibility of Tax Credits (#49-51)
  • Special Issues for Employers: Interaction of FFCRA Tax Credits with Other Tax Credits (#52)
  • Special Issues for Employers: Use of Third-Party Payers (#53)
  • Special Issues for Employers: Other Issues (#54-56)
  • Special Issues for Employees (#57-59)
  • Specific Provisions Related to Self-Employed Individuals (#60-66)

Internal Revenue Service [IRS]

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[Official Guidance]

Text of IRS Notice 2020-22: Relief from Penalty for Failure to Deposit Employment Taxes (PDF)

"The purpose of this notice is to provide penalty relief with respect to certain employers' deposits of Federal employment taxes with the [IRS]  ... including deposits of withheld income taxes, taxes under the Federal Insurance Contributions Act (FICA), and taxes under the Railroad Retirement Tax Act (RRTA) ... Specifically, this notice provides relief to employers entitled to the new refundable tax credits provided under the Families First Coronavirus Response Act [FFCRA] ... and the Coronavirus Aid, Relief, and Economic Security Act (CARES Act)[.]"

Internal Revenue Service [IRS]

[Guidance Overview]

IRS Limits the Number of Caretakers for Paid Leave, Outlines the Documentation Required to Take Leave

"[The IRS] took a hard line on an employee's need for emergency paid sick leave (EPSL) and emergency paid FMLA (FMLA+), taking the position that only one caretaker can take leave for a child whose school or childcare is closed. Moreover, if the child is over 14 years old, the parent must explain the special circumstances requiring the employee to provide care. This position is outlined in detailed FAQs highlighting the documentation employers can require to substantiate an employee's need for EPSL and FMLA+. The IRS also detailed the documents that must be maintained to obtain tax credits for EPSL and FMLA+ payments."

FMLA Insights

[Guidance Overview]

Editor's Pick COVID-19 Paid Leave Rules Are Effective Today: Things Certain Employers Should Do ASAP

"[1] Determine whether your company or any subsidiaries are subject to either of the new paid leave requirements ... If it is clear that your company has 500 or more employees, you can stop reading here -- these paid leave requirements do not apply to your company.... [2] Provide the required notice ... [3] Determine which employees could be entitled to the new paid leave ... [4] Develop a process for collecting required documentation ... [5] Talk to your payroll department or payroll vendor regarding the tax credits."

Groom Law Group

[Guidance Overview]

Updated Guidance for Employers on Paid Leave Requirements of the FFCRA

"[1] Who counts as an 'employee' for paid sick and family leave under the FFCRA? ... [2] Who is eligible for paid FFCRA leave in the event of a furlough, plant closure, or hours reduction? ... [3] Interaction between FFCRA paid leave and other paid leave ... [4] Interaction between paid FFCRA leave and FMLA leave ... [5] Can employees take intermittent paid leave under the FFCRA? ... [6] What documentation is required related to FFCRA leave? ... [7] When will employers be entitled to a tax credit for paid FFCRA leave?"

Schiff Hardin

[Guidance Overview]

DOL Releases Updated FFCRA Guidance on Telework and Intermittent Leave

"The FFCRA does not require that employers provide intermittent leave to teleworking employees. Intermittent leave is permitted if an employer allows it, and: [1] an employee is unable to telework his or her normal schedule of hours due to a COVID-19 -- qualifying reason under the EPSLA; or [2] an employee is prevented from teleworking during his or her normal schedule of hours because he or she needs to care for a child whose school or place of care is closed, or whose childcare provider is unavailable, because of COVID-19 -- related reasons under the EFMLEA."

Ogletree Deakins

[Guidance Overview]

DOL Updates Guidance on FFCRA Leave, Including Exemptions for Small Businesses and Exclusions for Health Care Providers

"[1] When to count employees for coverage.... [2] Small business exemption.... [3] Exclusion of health care providers.... [4] Exclusion of emergency responders.... [5] Public sector employee eligibility.... [6] Full-time employees defined.... [7] Son or daughter defined.... [8] Total amount of leave available under the FFCRA.... [9] Concurrent use of FFCRA leaves.... [10] Job restoration.... [11] Leave and health insurance waiting periods."

Ice Miller LLP

[Guidance Overview]

New York Releases Guidance on COVID-19 Leave

"The amount of leave employers are required to provide depends on their size as of January 1, 2020. Because the FAQs do not address whether employer size is determined by the number of employees in New York or nationwide, further guidance is needed."

Buck

[Guidance Overview]

San Francisco Issues Guidance on COVID-19 Paid Sick Leave While Area Shelter-In-Place Orders Extended

"San Francisco's Workers and Families First Program will provide $10 million to reimburse businesses with employees in San Francisco to allow businesses to provide those employees with additional paid sick leave.... All San Francisco employers with full- or part-time employees who work in San Francisco are eligible. Remote employees are not eligible."

Fisher Phillips

Editor's Pick Leave Tracking and Recordkeeping Under COVID-19: Adjusting for the New Normal

"This post provides practical guidance for employers on: [1] adjusting current systems to keep track of leave taken under the FFCRA; [2] documents to request from employees in connection with leave taken under the FFCRA; and [3] records that must be kept for leave taken under the FFCRA. While this guidance is focused on FFCRA leaves, it may also be generally applied to employee leave under any expanded state or local laws in connection with COVID-19."

Mintz

COVID-19: New Law Allows Free Telehealth Without Compromising Tax Benefits of Health Savings Accounts

"For plan years beginning before January 1, 2022, an employer can sponsor an HDHP and simultaneously offer a telemedicine service without disqualifying an employee from making or receiving tax-advantaged HSA contributions. Continued expansion in coverage means telehealth providers and employers can enhance telehealth program offerings, both for the immediate cost savings and growing opportunities for revenue generation, to say nothing of patient quality and satisfaction."

Foley & Lardner LLP

Dallas Paid Sick Leave Ordinance Blocked Just Days Before Scheduled Enforcement

"Austin, San Antonio, and Dallas -- three major Texas cities -- each enacted paid sick leave ordinances requiring private employers to provide paid sick leave to employees. With yesterday's ruling, all three have now been enjoined. While Dallas employers may have an obligation to provide federal paid sick leave under the [FFCRA], they have no responsibility to provide Dallas sick leave -- for now." [ESI/Employee Solutions LP v. City of Dallas, No. 19-570 (E.D. Tex. Mar. 30, 2020)]

Fisher Phillips

Judge's Decision Halts Dallas from Enforcing Paid Sick Leave Ordinance

"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)]

Jackson Lewis P.C.

Benefits in General

[Guidance Overview]

CARES Act for Retirement and Health Plan Sponsors

"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."

Maynard Cooper & Gale

Press Releases

Most Popular Items in the Previous Issue

Text of DOL Q&As on FFCRA, Including Clarifications and New Q&As
Wage and Hour Division [WHD], U.S. Department of Labor [DOL]

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BenefitsLink Health & Welfare Plans Newsletter, ISSN no. 1536-9595. Copyright 2020 BenefitsLink.com, Inc. All materials contained in this newsletter are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of BenefitsLink.com, Inc., or in the case of third party materials, the owner of those materials. You may not alter or remove any trademark, copyright or other notices from copies of the content.

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