Health & Welfare Plans Newsletter

May 14, 2020

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View Coronavirus (COVID-19) News and Resources

[Guidance Overview]

Editor's Pick HHS Final Rule Addresses Application of Prescription Drug Copay Coupons to Group Health Plan Out-of-Pocket Limit

"Unless new guidance is issued by the IRS changing its current position that discounts must be disregarded in determining whether a HDHP deductible has been met, it appears that sponsors of HSA-compatible HDHPs must adopt a copay accumulator program in order to preserve participants' eligibility to make or receive health savings account (HSA) contributions. A copay accumulator program tracks participants' use of prescription drug copay coupons and prevents the prescription drug copay coupons from being credited toward a participant's deductible and out-of-pocket limit."

Vorys

[Guidance Overview]

Navigating the COBRA Rules Under the Latest DOL and IRS COVID-19 Relief

"Continuation coverage would have to be coordinated with any FMLA rights and any continuation rights an individual may have under existing plan documents, employment agreements and personnel policies. Communication and documentation of any changes are critical. Unless the rules are clearly explained, an individual eligible for COBRA continuation may not only lose valuable rights but may look to the employer to remediate any loss. A lack of documentation, or ambiguous documentation, can be costly."

Lathrop GPM

[Guidance Overview]

IRS Provides COVID-19 Relief for Cafeteria Plans

"The additional flexibility, while generally advantageous for plan participants, may result in increased employer costs, as fewer employee contributions are likely to be forfeited under the 'use it or lose it' rule ... The additional flexibility in mid-year changes could also lead to additional 'adverse selection' with respect to employer-sponsored group health plans[.]"

Spencer Fane

[Guidance Overview]

All Bets Are Off: IRS Issues New Playbook for Section 125 Plans During Pandemic

While [Notice 2020-29 and Notice 2020-33 provide] welcome relief, the guidance leaves many questions unanswered.... When and how must participants be notified regarding these changes? ... Does the flexibility surrounding election changes apply to all qualified benefits under Section 125 (including dental and vision coverage), or does it only apply to medical, health FSA and dependent care FSA benefits? ... Will insurance carriers and reinsurance carriers honor this election change flexibility?

Seyfarth Shaw LLP

[Guidance Overview]

Editor's Pick IRS Issues New Rules Impacting FSA and HRA Plans: Employer Action Required

"[1] [D]etermine if the optional changes for 2020 only for participants' mid-year group health coverage revocation, changes, or new elections will be allowed ... [2] For 2020 only for each of the FSAs (health and dependent care), decide if the plan will allow mid-year revocations, increases, and/or decreases in the elected amounts.... [3] Decide for 2020 only if an FSA will allow for the optional extended time through December 31, 2020 for participants to incur and submit claims for the prior plan year.... [4] If your health care FSA has a carryover provision, begin planning your employee communications in preparation for the 2021 plan year for an increased carryover amount.... [5] If you sponsor an ICHRA, work in conjunction with that plan vendor to implement the ability to reimburse payments made prior to coverage, and prepare a communication to employees clarifying how individual health coverage reimbursements can now be made under the ICHRA."

Kushner & Company

[Guidance Overview]

New Jersey Amends Four Leave Laws

"New Jersey has amended its leave laws to make them available in the event of state designated emergencies arising out of an epidemic of a communicable disease ... New Jersey provides four different leave laws. They are the Earned Sick Leave law, Family Leave Act, Family Leave Insurance, and State Temporary Disability. Beginning March 25, 2020, individuals can take expanded leave, as more fully described [in this article]."

CBIZ

[Guidance Overview]

D.C. Will Require Paid Leave and Excused Absences for Voters

"Upon an employee's request, an employer must provide the employee at least two hours of paid leave to vote in person in any public election in D.C. Employees ineligible to vote in D.C. may also receive two hours of paid leave to vote in person in any election run by the jurisdiction in which the employee is eligible to vote."

McGuireWoods

DOL Updates Model COBRA Notices

"Both model notices include a new section that provides information about Medicare special enrollment periods and how COBRA coverage coordinates with Medicare.... Because individuals who don't enroll during their special enrollment period generally would have to wait until the next Medicare annual enrollment to enroll, they could potentially have a gap in coverage if their COBRA coverage ends before their Medicare coverage becomes effective."

Buck

Providers, Payers Try to Convince Supreme Court to Not Strike Down ACA

"Several major groups filed 'friend of the court' legal briefs ... in a federal lawsuit brought by Texas and 17 other red states seeking to get rid of the ACA. A prevailing theme throughout the briefs is that jettisoning the healthcare law would create chaos and strain the healthcare system." [California v. Texas, No. 19-840; Texas v. California, No. 19-1019 (cert. pet. granted Mar. 2, 2020)]

FierceHealthcare

Treasury Allowing an Employer Tax Credit for Insured Furloughed Workers

"Employers that are partly or completely prohibited from operating during the shutdowns caused by the coronavirus pandemic but who continue to fund employee health care coverage, may be able to take up to a $10,000 tax credit for each employee, regardless of whether they are paying wages to those employees."

Findley

[Opinion]

Statement by the AHIP Board of Directors on Safely Re-Opening America's Health Care System

"For surgeries and procedures that were pre-authorized and approved but subsequently postponed due to COVID-19, health insurance providers will implement grace periods to extend the approvals.... [H]ealth insurance providers will promote and encourage members to catch up on preventive and routine care deferred due to COVID-19.... Health insurance providers are committed to partnering with hospitals, physicians, nurses, and other health care workers to continue the accelerated adoption and use of innovative technologies, such as telemedicine ... [I]nsurance providers will continue to streamline the use of prior authorization[.]"

America's Health Insurance Plans [AHIP]

Benefits in General

[Guidance Overview]

Coronavirus Recovery and Relief Guidance on Employee Benefit Plans

"Employers should review their plan provisions -- particularly the claim and appeal rules -- because the prior maximum limits on filing certain actions such as appeals of denials may need to be altered due to the tolling of these periods during the Outbreak Period. The requirement to disregard the Outbreak Period in determining whether the deadlines have been exhausted may require plan amendments for retirement as well as health, disability and other benefits using the ERISA claim procedures. The final rule extending the deadlines did not address when plan amendments need to be made to consider the Outbreak Period."

Jackson Walker

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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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