Health & Welfare Plans Newsletter

April 10, 2020

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Navigating COVID-19 Compliance Challenges Under the CARES Act and FFCRA
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Employee Benefits Spring Update 2020: 5-Part Webinar Series
May 20, 2020 WEBCAST
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Annual Education Conference
August 13, 2020 in GA
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[Guidance Overview]

Important Takeaways from the DOL's Temporary Rule on the FFCRA

"[1] Clarification of the qualifying reasons for use of Paid Sick Leave and Expanded FMLA under the FFCRA.... [2] The DOL encourages employers to implement highly flexible work arrangements.... [3] Employers and employees may agree to intermittent leave.... [4] Statewide 'shelter-in-place' orders and their effect on paid sick leave.... [5] Determining whether employers meet the employee thresholds to be covered by FFCRA paid leave provisions.... [6] Limited exemptions for small businesses to offer paid leave.... [7] DOL's model notice and employer requirements.... [8] Documentation requirements for paid leave under FFCRA."

Dentons

[Guidance Overview]

Editor's Pick FFCRA Leave Documentation: What Is Required and What Is Recommended?

"Employers are required to maintain [specific] records for each FFCRA leave ... [The authors] recommend that employers provide employees ... with a certification form that clearly details all [required] information for employees to complete and sign.... Employers should limit their inquiry into the employee's reasons for FFCRA leave to the above documentation. The FFCRA regulations make clear that employers cannot require additional documentation of an employee's reason for leave, aside from what is listed above and any further guidance issued by the IRS or DOL."

Davis Wright Tremaine LLP

[Guidance Overview]

Editor's Pick Tax Credits Available to Employers Under the FFCRA and the CARES Act

"These credits are allowed against the employer's portion of Social Security taxes and are equal to 100% of the sick leave wages and family leave wages paid under the FFCRA and 50% of qualified wages paid under the employee retention credit provisions of the CARES Act.... These tax credits are refundable, so if the credits exceed the employer’s Social Security tax liability, the employer is entitled to a refund from the IRS. "

Choate Hall & Stewart LLP

[Guidance Overview]

Code Section 139: Little-Known Disaster Relief Benefits Now in the Spotlight

"Qualified disaster relief payments are excluded from gross income and are not subject to federal income tax, FICA or FUTA withholding; further, the payments are deductible by the employer. Thus, they do not have to be reported as income by the employee on an employee's Form W-2 or on a Form 1099. Employers should be aware, however, that Code Section 139 only addresses the tax treatment of these benefits under federal law; applicable state laws will need to be examined to determine if such amounts are subject to state income tax withholding."

Faegre Drinker

[Guidance Overview]

Q&As About Section 139 Qualified Disaster Relief Payments

"[1] What payments to employees qualify as qualified disaster relief payments? ... [2] What payments made by employers to employees would not be covered by Section 139? ... [3] Are employers entitled to a tax deduction for disaster relief payments in the same manner as payment of regular wages? ... [4] Is the tax-free treatment of qualified disaster relief payments limited to those made by employers? ... [5] What other requirements must an employer meet under Section 139? ... [6] Is Section 139 available for state income tax purposes as well? ... [7] What about employers that fund relief fund programs through charitable organizations (public charities) that were formed to assist employees in connection with a disaster or a personal financial hardship?"

BakerHostetler

[Guidance Overview]

Los Angeles Emergency Order Mandates Supplemental Paid Sick Leave for Large Employers

"Under the existing Los Angeles City paid sick leave ordinance, employers were already required to provide employees with at least 48 hours (six days) of paid sick leave or one hour for every 30 hours worked.... The L.A. Supplemental PSL now seeks to 'bridge the gap' by creating mandatory paid sick leave for the Los Angeles employees of many larger employers who are not bound by the FFCRA."

ReedSmith

[Guidance Overview]

Los Angeles Mayor Orders Supplemental COVID-19 Paid Sick Leave

"While there are several exemptions, the Order applies to employers that have either: [1] 500 or more employees within the City of Los Angeles; or [2] 2,000 or more employees within the United States. Employees covered by the Order are those who perform any work within the geographic boundaries of the City of Los Angeles and who were continuously employed by the same employer from February 3, 2020 to March 4, 2020."

Davis Wright Tremaine LLP

[Guidance Overview]

San Francisco and San Jose Require Emergency Paid Sick Leave to Cover FFCRA Coverage Gaps

"San Francisco and San Jose have joined the growing list of local California jurisdictions to adopt COVID-19-specific paid sick leave measures impacting employer and employees who operate in the local areas. In general, these ordinances ... supplement paid leave already offered under federal law and other local ordinances... The City of Los Angeles and Emeryville have already adopted similar measures, and more proposals are under consideration in Oakland and Los Angeles County, among other jurisdictions."

Fisher Phillips

[Guidance Overview]

San Francisco Enacts Emergency Ordinance: Public Health Emergency Leave

"Employees covered by the [Public Health Emergency Leave Ordinance (PHELO)] include full-time, part-time, temporary, seasonal, salaried and commissioned workers, and individuals employed through public job training programs, such as CalWorks or CAAP, who have performed at least 56 hours of work within the San Francisco City and County geographic boundaries during the prior year. Emergency leave will be available for immediate use, regardless of how long the employee has been employed by the employer and regardless whether or when the employee is scheduled to work."

Duane Morris LLP

Surprise Billing Banned for Providers That Get CARES Act Grants

"Providers that receive grant funds from the [CARES] Act will have to certify that they will not try to collect more money from COVID-19 patients than the patients would have to pay if services had been in-network. The ban applies to patients covered by commercial, government or employer-sponsored coverage."

Modern Healthcare Online; free registration required

Using COVID-19 Disaster Relief Funds to Assist Employees

"Section 139 disaster relief funds allow employers to make qualified disaster relief payments to employees ... [It] is prudent to set forth the terms of a disaster relief fund in a written document or policy ... [which] should describe the scope of the policy, the duration of the disaster relief fund, eligibility requirements for receipt of disaster relief payments, procedures to apply for payments, the timing and method of making payments, and limits on the amount of payments, if any.... A properly structured disaster relief fund will not be subject to ERISA."

Greensfelder

COVID-19 Costs to Commercial Health Insurers (PDF)

"[T]he incidence rate of COVID-19 along with the hospitalization rate is key to estimating future costs. As time passes, the likelihood increases that different therapies and cures will be developed to help bring down fatalities, hospitalizations, and, ultimately , the costs of this disease. The most important goal is to produce a vaccine. This is necessary in order to achieve the most dramatic reductions and stop the pandemic in its tracks. Despite extensive work by many on this endeavor, that goal is not likely to be achieved until sometime next year."

Society of Actuaries

Benefits in General

[Guidance Overview]

IRS 5500 Extension Comes Up Short

"Under Notice 2020-23, released April 9, the extensions generally now apply to all taxpayers that have a filing or payment deadline falling on or after April 1, 2020, and before July 15, 2020.... The extension will surely be welcome news for those June 30 plan year-ends that had filed for an extended deadline of April 15 (the regular Jan. 31 deadline + 2-1/2 months) -- and which will now have until July 15 to file.... [T]he news will be of little comfort to those plans with calendar year-ends -- for which their July 31 deadline is fast approaching."

American Retirement Association [ARA]

[Guidance Overview]

COVID-19: Puerto Rico Tax Exemptions for Employer Payments and Changes to Puerto Rico Qualified Plans

"CC RI 20-22 extends the provisions of CC RI 20-08, which provides income tax exemptions for 'Qualified Payments Made for Disaster Assistance' made by employers to employees and independent contractors, to include certain payments made as a result of the COVID-19 emergency.... CC RI 20-23 amends CC RI 20-09, which provides rules applicable to 'Special Disaster Distributions' from qualified retirement plans and IRAs."

Haynes and Boone, LLP

Benefits in the Time of COVID-19: RIFs, Furloughs, Layoffs, and Leaves of Absence

"[1] Partial plan terminations.... [2] Qualified plan loans.... [3] Health and welfare plan eligibility.... [4] COBRA continuation coverage.... [5] ACA information reporting.... [6] USERRA.... [7] Severance benefits.... [8] Executive compensation.... [9] Multiemployer pension plan withdrawal liability.... [10] ERISA litigation considerations."

Epstein Becker Green

Press Releases

Most Popular Items in the Previous Issue

Text of DOL Correction to Temporary Regs for Paid Leave Under the FFCRA
Wage and Hour Division [WHD], U.S. Department of Labor [DOL]

COVID-19 and the Affordable Care Act
Conrad Siegel Actuaries

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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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