Health & Welfare Plans Newsletter

May 15, 2020

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View Coronavirus (COVID-19) News and Resources

[Official Guidance]

Text of CMS Bulletin: Temporary Period of Relaxed Enforcement of Certain Timeframes Related to Group Market Requirements Under the Public Health Service Act in Response to the COVID-19 Outbreak (PDF)

"[CMS] concurs with the relief specified by DOL, the Treasury Department, and IRS in the Joint Federal Register Notice, as well as in EBSA [Disaster Relief] Notice 2020-01 issued by DOL.... CMS will adopt a temporary policy of relaxed enforcement to extend similar time frames otherwise applicable to non-Federal governmental group health plans and health insurance issuers offering coverage in connection with a group health plan, and their participants and beneficiaries, under applicable provisions of title XXVII of the Public Health Service Act (PHS Act).... CMS also will not consider a Small Business Health Options Program (SHOP), a SHOP issuer offering a qualified health plan (QHP) through a SHOP, or small business participating in a SHOP to be out of compliance with rules applicable to the SHOP, to the extent the SHOP, issuer, or small business operates in a manner consistent with this relief. To the extent there are different outbreak period end dates for different parts of the country, the relief provided by this Bulletin will apply in a manner consistent with any additional guidance announced by DOL or jointly by DOL and the Treasury Department /IRS regarding the application of the relief to those different areas."

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

[Guidance Overview]

DOL Latest FAQ on FFCRA: Might Employers Who Use Temp Agencies Actually Be on the Hook for Paid Sick and Paid FMLA Leave?

"[T]he FAQ does suggest that the employer utilizing the temp's services is on the hook for EPSL and FMLA+ if they are a joint employer with the temp agency.... [A] true joint employer: [1] Hires or fires the employee; [2] Supervises and controls the employee's work schedule or conditions of employment to a substantial degree; [3] Determines the employee's rate and method of payment; and [4] Maintains the employee's employment records.... [In] many employee leasing situations, the employer simply will not have this kind of control over the temp employee."

FMLA Insights

[Guidance Overview]

DOL Updates FFCRA Guidance

"The guidance expands on the meaning of an employer with 500 employees ... The guidance also expands on the 50-employee small business exemption.... The benefits provided under the FFCRA were available as of April 1, 2020 and cannot be provided retroactively.... Employees may end a voluntary leave of absence and use leave under the FFCRA for a qualifying reason."

Mintz

[Guidance Overview]

COBRA is Temporarily Social Distancing From its Election and Payment Deadlines

"The deadline for providing the COBRA election notice to participants has also been suspended during the Outbreak Period. However, this relief does not relieve employers of the headaches associated with the possible retroactive implementation (and, in some cases, cancellation) of COBRA coverage. The guidance also makes clear that the deadline suspension cannot exceed the one-year limit imposed by ERISA Section 518 and Code Section 7508A."

Littler

[Guidance Overview]

IRS Expands Permissible Mid-Year Cafeteria Plan Election Changes

"The practical effect of the guidance on a calendar year plan with a grace period is to extend that period for the 2019 plan year through December 31, 2020. Although this could be beneficial to employees, the extension of the grace period of a general-purpose health FSA could potentially make the employee ineligible to contribute to an HSA for all of 2020."

Buck

[Guidance Overview]

Editor's Pick IRS Allows Unprecedented Mid-Year Election Changes Under Section 125 Cafeteria Plans

"If an employer is interested in voluntarily expanding the mid-year election opportunities for 2020, before proceeding, the employer should confirm with its carrier (for fully insured plans) or stop-loss carrier (for self-funded plans) that the carrier will honor these mid-year changes. Fortunately, carriers have been more flexible with respect to mid-year enrollments during the COVID-19 pandemic.... Employers should be aware that employees who request to drop employer-sponsored coverage mid-year may not be eligible to enroll in other coverage mid-year absent a HIPAA special enrollment event."

Miller Johnson

[Guidance Overview]

Ch-Ch-Ch-Changes (In Elections and Grace Periods)

"[It is] not entirely clear whether the term ['employer-sponsored health coverage'] includes dental and vision coverage. The Notice does make clear, however, that it only encompasses benefits that are excludable from an individual's gross income under Code sections 105 or 106."

Groom Law Group

[Guidance Overview]

Massachusetts Department of Paid Family and Medical Leave Releases New Draft Regs

"The proposed amendments provide further guidance on the application and approval process for a potential private plan exemption to the law. This includes information on partial exemptions, timing, plan requirements, and plan administration and compliance.... The proposals include a requirement for further substantiation of the need for leave for individuals applying for benefits.... The proposed amendments include a framework for courts to refer to in determining whether unlawful retaliation occurred."

Jackson Lewis P.C.

[Guidance Overview]

Oakland Enacts COVID-19 Supplemental Paid Sick Leave Ordinance

"On May 12, 2020, Oakland joined the list of California localities that have enacted a law requiring supplemental paid sick leave for COVID-19 purposes ... The requirements take effect immediately and will remain through December 31, 2020, unless the city extends the law's end date."

Littler

District Court Finds Seattle's Fair Share Ordinance Is Not ERISA-Preempted

"[The court] held that a Seattle ordinance requiring certain hotel industry employers to make employee health care expenditures was not preempted by ERISA. In the district court's view, the challenged ordinance was similar to the ordinance previously upheld by the Ninth Circuit[.]" [The ERISA Industry Committee v. City of Seattle, No. 18-1188 (W.D. Wash. May 8, 2020)]

Thomson Reuters Practical Law

Small-Employer Exemption to FFCRA: It's Not as Large as You'd Think

"This teeny-tiny employer exemption is pretty teeny-tiny: It applies only to FFCRA leave related to care of a son or daughter because of a school or child care closing, or unavailability of a child care provider, because of COVID-19. There is no exemption from the other provisions of the Emergency Paid Sick Leave Act (for example, the requirement to provide paid leave to an employee who is having to stay home because of a quarantine or isolation order from a public health authority). Even if the leave is needed for a qualifying reason, the exemption is not available unless an authorized officer of the employer certifies in writing that one of [three specific] conditions exists."

Constangy, Brooks, Smith & Prophete LLP

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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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