Health & Welfare Plans Newsletter

May 12, 2020

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View Coronavirus (COVID-19) News and Resources

[Official Guidance]

Text of CMS Update on the HHS-Operated Risk Adjustment Program Transfers for the 2014-2016 Benefit Years (PDF)

"In light of the December 31, 2019 Tenth Circuit Court of Appeals decision in New Mexico Health Connections v. [HHS], this document notifies issuers that [CMS] will resume the collection of risk adjustment charges (including overpayments) and distribution of risk adjustment payments for the 2014-2016 benefit years, beginning in the June 2020 payment cycle."

Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS]

[Sponsored]

Thorough analysis of important aspects of the FFCRA and CARES Act

Sponsored by Wolters Kluwer

Understand & respond to the new rules & requirements this legislation brings. Families First Act and CARES Act, Selected Provisions: LEA provides numerous features designed to help you locate and understand the changes made by these Acts. Learn More. Learn more


[Official Guidance]

Text of IRS Notice 2020-29: COVID-19 Guidance Under Section 125 Cafeteria Plans, and Guidance Related to High Deductible Health Plans (PDF)

15 pages. "[T]his notice provides for increased flexibility with respect to mid-year elections under a Section 125 cafeteria plan during calendar year 2020 related to employer-sponsored health coverage, health Flexible Spending Arrangements (health FSAs), and dependent care assistance programs. This notice also provides increased flexibility with respect to grace periods to apply unused amounts in health FSAs to medical care expenses incur red through December 31, 2020, and unused amounts in dependent care assistance programs to dependent care expenses incurred through December 31, 2020."

Internal Revenue Service [IRS]

[Official Guidance]

Text of IRS Notice 2020-33: Section 125 Cafeteria Plans -- Modification of Permissive Carryover Rule for Health Flexible Spending Arrangements and Clarification Regarding Reimbursements of Premiums by Individual Coverage Health Reimbursement Arrangements (PDF)

12 pages. "This notice modifies Notice 2013-71 ... to increase the carryover limit (currently $500) of unused amounts remaining as of the end of a plan year in a health Flexible Spending Arrangement (health FSA) under a Section 125 cafeteria plan that may be carried over to pay or reimburse a participant for medical care expenses incurred during the following plan year. The increase in the amount that can be carried over from one plan year to the next reflects indexing for inflation, and this indexing parallels the indexing applicable to the limit on salary reduction contributions under Section 125(i) of the Internal Revenue Code. Second, this notice clarifies the ability of a health plan to reimburse individual insurance policy premium expenses incurred prior to the beginning of the plan year for coverage provided during the plan year. This clarification will assist with the implementation of individual coverage health reimbursement arrangements (individual coverage HRAs)."

Internal Revenue Service [IRS]

[Guidance Overview]

FFCRA Updates

"This alert incorporates the guidance issued by the United States Department of Labor (DOL) on March 28, 2020, and updated on March 29, 2020, in addition to the regulations published by the DOL on April 6, 2020, and other DOL FAQ updates through May 8, 2020, related to FFCRA leave."

Ballard Spahr LLP

[Guidance Overview]

Key COBRA Deadlines Extended During the COVID-19 Pandemic

"[E]mployers should not use the extension to defer sending out COBRA notices. Doing so would typically require an override of procedures that are best left undisturbed. Slippage attributable to a missed or a late COBRA notice can produce penalties and potential liability for medical expenses incurred by the person who did not receive a timely notice. The real concern for employers ... is how the extension of the 60-day election deadline and the 45-day first premium payment will impact the cost of operating a group health plan."

Blank Rome LLP

[Guidance Overview]

Massachusetts Department of Family and Medical Leave Issues Proposed Amendments to PFML Regs

"The proposed amendments ... codify prior ... guidance regarding covered contract workers, clarify the requirements for private plan exemptions, provide further information regarding applications for benefits and reductions to benefit amounts, and add definitions for a number of previously undefined terms."

Seyfarth Shaw LLP

[Guidance Overview]

New York City Streamlines Process for Obtaining Emergency Sick Leave Pay

"The qualifications for mandatory isolation include those who either [1] tested positive for COVID-19, or [2] have symptoms of COVID-19 and were in contact with someone who tested positive for COVID-19 or who had symptoms of COVID-19.... [E]ligible employees who submit the applicable Appendix and any required documentation are deemed to have submitted the necessary documentation to qualify for NY EPSL."

Fisher Phillips

[Guidance Overview]

DOL Updates Its FFCRA Q&As

"Among other topics, the DOL Q&As address temporary placement agencies, school closures, and documentation of paid sick leave requests."

Ogletree Deakins

How and When to Evaluate Your Benefits Decision Support Tools

"Ultimately, an ROI calculation provides the best indicator of the success of your decision support tool. Consider these factors: [1] Migration of employees to less expensive plans ... [2] Medical trend influence ... [3] Increase in contributions to FSAs and HSAs ... [4] Corporate tax savings."

Tango Health

Employers Should Revisit Unlimited PTO Policies

"A recent California Court of Appeal case reminds employers that loosely drafted PTO policies may leave them on the hook for unused vacation days.... The prevalence of unlimited PTO policies across the country could give this opinion weight even outside of California.... During the COVID-19 downturn, many employers have already been forced to lay off employees, and more layoffs could be coming. It is more important now than ever for employers to review their unlimited PTO policies to ensure that the policies are tightly drafted." [McPherson v. EF Intercultural Foundation, Inc., No. B290869 (Cal. App. 2d, Apr. 1, 2020)]

Holland & Hart LLP

House Democrats Propose Retroactive Effective Date for Federal Employee Paid Parental Leave

"House Democrats last week urged House Speaker Nancy Pelosi and Minority Leader Kevin McCarthy to make the recently enacted program granting up to 12 weeks of paid parental leave to federal employees available to workers sooner than anticipated.... Under these lawmakers' proposal, the paid parental leave benefit would be effective retroactive to Dec. 20, 2019, when Trump first signed the bill."

Government Executive

'But For' or 'Motivating Factor' Under the FMLA? The Fifth Circuit May Soon Clarify and Join the Split Among the Circuits

"The US Supreme Court has never directly decided and the federal courts of appeal have not reached a unanimous decision on whether the 'but for' or 'motivating factor' standard applies to retaliation claims under the Family and Medical Leave Act (FMLA). An interlocutory appeal recently taken from the federal court in the Western District of Texas may give the Fifth Circuit a chance to weigh-in directly on this issue and provide clarity for litigants and the lower courts throughout Texas, Louisiana, and Mississippi." [Crankshaw v. City of Elgin, No. 18-075 (W.D. Tex. Apr. 14, 2020)]

Seyfarth Shaw LLP

Benefits in General

[Guidance Overview]

Editor's Pick Summary Table and In-Depth Analyses of COVID-19 Legislation for Employer-Based Retirement and Welfare Plans (PDF)

43 pages. "[This article catalogues] the provisions of the FFCRA and CARES Act that impact employer-sponsored retirement plans, health plans, and other benefits ... [The authors] have summarized the statutory provisions as well as related regulatory guidance that has been issued as of the date of this publication. The table includes a high level discussion of the law and practical considerations.... [A] comprehensive discussion of each provision [appears] at the end of the table."

Ice Miller LLP

[Guidance Overview]

Relief for Employee Benefit Plan Fiduciaries Due to COVID-19

"Private sector plan fiduciaries now have additional time during the COVID-19 outbreak to furnish required notices and disclosures to participants and beneficiaries ... The relief applies only if the plan fiduciary acts in good faith, which can include providing electronic disclosure for now ... Plan fiduciaries should be ready to fully comply with the notice and disclosure rules when normal business operations resume."

Hanson Bridgett LLP

Bankruptcy and Benefits Beyond a Crisis: How Chapters 11 and 7 Affect Retirement and Welfare Plans

"A filing under Chapter 11 may or may not affect the business's employee benefit offerings. Under a Chapter 7 filing, however, the business liquidates its assets to pay its creditors and the business ceases to exist. Typically, under a Chapter 7 filing, all benefit plans will be terminated."

Ogletree Deakins

Employer Plan Changes in Response to the COVID-19 Pandemic

"Prescription drug plans are changing to reduce barriers ... Mental health benefits are increasing ... Nearly all employers are offering telehealth services ... Employers are implementing DC plan changes as permitted by the CARES Act ... Health care benefits for furloughed and laid-off workers varies by employer."

International Foundation of Employee Benefit Plans [IFEBP]

Editor's Pick AICPA Delays Required Implementation of New Reporting Standards for Plans Subject to ERISA

"The American Institute of Certified Public Accountants (AICPA) has issued Statement of Auditing Standards (SAS) Number 141, which provides for a delay in effective dates for ... SAS 136, Forming an Opinion and Reporting on Financial Statements of Employee Benefit Plans Subject to ERISA ... to December 15, 2021. Additionally, it amends SAS 136 to no longer preclude early implementation."

Ascensus

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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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