Health & Welfare Plans Newsletter

May 18, 2020

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Webcasts, Conferences

Families First Coronavirus Response Act (FFCRA) for Employers
May 20, 2020 WEBCAST
Wage and Hour Division [WHD], U.S. Department of Labor [DOL]

Families First Coronavirus Response Act (FFCRA) for State and Local Governments
May 22, 2020 WEBCAST
Wage and Hour Division [WHD], U.S. Department of Labor [DOL]

COBRA Compliance
May 28, 2020 WEBCAST
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

COBRA Compliance
June 11, 2020 WEBCAST
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

Primer on the Structure, Taxation and Regulation of Group Voluntary Benefits
July 22, 2020 WEBCAST
Lorman Education Services

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View Coronavirus (COVID-19) News and Resources

[Guidance Overview]

How COBRA Got Her Groove Back: Old Law Gets New Focus From DOL, Class Action Plaintiffs' Attorneys

"After falling out of favor [post-ACA], ... everyone is once again talking about COBRA in light of recent DOL guidance and a rash of class action lawsuits alleging inadequacy of COBRA notices.... [M]any plan sponsors are taking the opportunity to dust off their old COBRA notices and give them a facelift for the new era."

Seyfarth Shaw LLP

[Guidance Overview]

IRS Increases Carryover Limits for Health FSAs, Addresses Timing of Health Insurance Premium Payments

"[Notice 2020-33] allows for premium payments to continue to qualify for the exclusion from income, even if they are paid prior to the beginning of the year. This technical change applies to all health plans that pay for health plan premiums, including individual coverage health reimbursement arrangements. This guidance is in line with guidance that already applies for qualified small employer health reimbursement arrangements."

Ballard Spahr LLP

[Guidance Overview]

IRS Expands Flexibility for Cafeteria Plans in Response to COVID-19

"[If] the claims period is extended under a health FSA that is not HSA-compatible, no contributions may be made to an HSA during the extended period if a participant has unused amounts remaining at the end of a plan year or grace period ending in 2020. Accordingly, employers should take caution before adopting an extended grace period."

Husch Blackwell

[Guidance Overview]

IRS Permits Additional Flexibility for Cafeteria Plan Elections and Carryovers

"While all election coverage changes must be prospective, you are free to limit the number of election changes that can be made; specify the time period for which changes can be made; and in the case of HFSAs and DCAPs, limit elections to amounts not less than already reimbursed. You should consider the adverse selection risks in determining how expansively to amend their plans for mid-year changes.... [If] you wish to adopt mid-year election and carryover changes, you often must consult with, and obtain advanced approval from, carriers and stop-loss providers."

Fisher Phillips

[Guidance Overview]

The Families First Coronavirus Response Act: Impact on Employers and Plan Sponsors (PDF)

"Can high-deductible health plans provide 100% coverage before the deductible? ... Do the health coverage requirements apply to grandfathered plans and excepted benefits under the [ACA]? ... Which private sector employers are subject to the FFCRA paid leave requirements? ... Which employees count toward the 500-employee threshold? ... What documentation can an employer require for paid sick leave and expanded FMLA?" [Editor's note: Article does not reflect the expanded cafeteria plan election provisions of IRS Notice 2020-29.]

benefits magazine, a publication of the International Foundation of Employee Benefit Plans [IFEBP]

[Guidance Overview]

New York Requires All Employers to Provide Sick Leave

"Employers can fulfill their obligations by either providing the sick leave in a lump sum at the beginning of the calendar year (i.e., frontloading it) or by allowing employees to accrue sick leave at a rate of not less than one hour for every 30 hours worked, beginning at the later of September 30, 2020, or the commencement of employment. While current employees will begin accruing sick leave in 2020, employers are not required to permit usage of that accrued time until January 2021."

Blank Rome LLP

[Guidance Overview]

Final CMS Benefit and Payment Parameters for 2021

"[1] Cost-sharing limits... [2] Affordability standard: individual coverage... [3] Employer Shared Responsibility penalties... [4] Prescription drug coupons and cost sharing... [5] Excepted-benefit HRA: notice obligation... [6] QSEHRA: special enrollment periods... [7] Federal exchange user fees."

CBIZ

Claims Are Down. What Happens Next?

"In evaluating the effect of COVID-19 on health plan costs, the primary impacts are related to new costs for testing and treating patients who need hospitalization, and 'savings' from deferred elective care that does not return. While many estimates ... envision some scenarios leading to 2020 costs lower than budgets, there are secondary consequences that could impact costs in 2021 and beyond."

Mercer

Wide Range of Amici Support California, House in Texas Litigation

"Amicus briefs were filed by every major health care stakeholder group -- including health insurers, hospitals, physicians, the AARP, and an array of patient and consumer advocates -- as well as small business leaders, labor unions, legal scholars, economists, members of Congress, tribes and tribal organizations, localities, and public health experts ... Consistent with prior filings, amici warn of massive disruption and devastating consequences if all or parts of the ACA are deemed invalid. Many also emphasize the importance of the ACA to the nation's COVID-19 response." [California v. Texas, No. 19-840; Texas v. California, No. 19-1019 (cert. pet. granted Mar. 2, 2020)]

Katie Keith, in Health Affairs

Puerto Rico Senate Approves Reverting to Pre-2017 Employment Law Reform Sick, Vacation Leave

"Senate Bill 1524 seeks to revert to the law in effect before the enactment of the Employment Law Reform by lowering the accrual threshold from 130 hours per month to 115 hours per month. [The Bill] also would revert the minimum vacation leave accrual for all eligible employees to 1.25 days per month, for a total of 15 days per year ... Sick leave accrual would remain the same, at one day per month."

Jackson Lewis P.C.

PBMs See Solid 1Q Results Despite Challenges Ahead

"Major PBMs reported strong results for the first quarter of 2020 as members rushed to fill prescriptions in March ahead of the COVID-19 pandemic. However, financial analysts warn the pandemic could have unpredictable effects on PBMs' finances for the rest of 2020 and moving into 2021."

AISHealth

[Opinion]

P4ESC Letter to Agencies and Congress Requesting Compliance Relief for Employer-Sponsored Coverage (PDF)

"P4ESC requests three safe harbor and regulatory relief measures regarding the reporting requirements: [1] provide employers with longer than 30 days to appeal a 226-J tax penalty letter; [2] provide employers that have to pay a tax penalty with a deferral similar to that offered for other tax-related payments and filings to help with liquidity burdens; and [3] require the IRS to review an employer's reported filings to data match against an individual's tax return before issuing a 226-J letter.... P4ESC requests that the Administration continue granting or extending reporting and filing delays and safe harbors for various federal requirements throughout the duration of the pandemic."

Partnership for Employer-Sponsored Coverage [P4ESC]

Benefits in General

[Guidance Overview]

Editor's Pick COVID-19 Resource Guide: Action Items and Implementation Guidelines for Employee Benefit Plans

22-page chart summarizes official guidance, effective dates, employer actions, and additional notes for employer-sponsored plans.

Pepper Hamilton LLP and Troutman Sanders

Press Releases

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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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