Health & Welfare Plans Newsletter

June 1, 2020

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View COVID-19 News and Resources

[Guidance Overview]

The $550 Carryover vs. the Grace Period

"Employers generally should not amend a plan that offers the grace period mid-year to convert to the carryover for the current plan year. Employees may have made their elections intending to utilize their health FSA balance during the grace period by combining a year-one and year-two election for a high cost procedure ... IRS guidance suggests that this approach may be subject to 'non-Code legal restraints,' such as an ERISA breach of fiduciary duty claim."

ABD Insurance & Financial Services

[Guidance Overview]

San Francisco HCSO Compliance in the Work-From-Home Era

"Employees who are working from a home office outside of San Francisco (or any other non-SF place) exclusively during the quarter will not be [a Health Care Security Ordinance (HCSO)] covered employee for the quarter because they will not have worked at least 8 hours per week in SF. That means the employer will not be responsible for satisfying the required health care expenditures for that employee because the HCSO will not apply to the employee in the calendar quarter.... [E]mployees who are working from a home office in San Francisco will still be covered employees for the quarter."

ABD Insurance & Financial Services

[Guidance Overview]

CMS Issues Proposed Rule to Amend the HHS Risk Adjustment Data Validation Program

"In response to stakeholder feedback about HHS-RADV, the rule proposes changes to two technical aspects of the HHS-RADV program, the error rate calculation and the application of HHS-RADV results."

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

COBRA Lawsuit and Litigation Risk on the Rise

"Visiting [the] web site [of one of the firms filing these lawsuits] you will note a list of common mistakes employers make that can lead to litigation. These mistakes involve more than just missing deadlines in providing a COBRA election notice. The list includes contacting only the employee losing health coverage and forgetting to also contact the covered spouse and dependent children -- remember each covered family member has an individual COBRA election right."

Findley

Court Upholds Exclusion of Surrogate Pregnancy Costs, But Pitfalls Remain

"The 10th Circuit affirmed enforcement of the exclusion on the grounds that 'a reasonable person in the position of the participant would view 'pregnancy charges acting as a surrogate mother' as an example of a non-traditional medical expense' and hence as excluded care. Perhaps illustrating the legal maxim that 'bad facts make bad law,' it is impossible to tell whether the court's conclusion was tainted by the fact that the plaintiff proceeded with two separate surrogate pregnancies after confirming that that the plan did not cover this type of expense." [Moon v. Tall Tree Administrators, LLC, No. 18-4034 (10th Cir. May 19, 2020)]

E is for ERISA

How Have Healthcare Utilization and Spending Changed So Far During the Coronavirus Pandemic?

"[T]his chart collection [summarizes] ... how health costs and utilization have changed during the pandemic.... [T]here has been an abrupt and sizable decrease in healthcare utilization, at least in the early months of the pandemic. The exception has been telehealth, which has experienced an increase.... [H]ealthcare utilization began picking back up in late April or early May."

The Peterson-Kaiser Health System Tracker

Benefits in General

[Guidance Overview]

IRS, DOL Ease Deadlines for Health, Other Benefit Plans and Participants (PDF)

"[EBSA Disaster Relief Notice 2020-01] doesn't include relief for temporary delays in forwarding participant contributions to health plans. However, the Notice specifically says that DOL won't pursue enforcement action against an employer for a temporary delay -- due solely to the COVID-19 pandemic -- in forwarding participant contributions or loan repayments to an employee pension benefit plan."

Mercer

Rethinking Employee Benefits in Light of COVID-19

"As the United States begins to open back up, many employers are re-evaluating a return to the traditional workplace and are exploring continuing [work from home (WFH)] arrangements, either permanently or on an intermittent basis.... Employers who offer extended WFH arrangements should consider the following benefit modifications or enhancements ... Stipends or expense reimbursements.... Flexible work schedules and paid time off.... Childcare assistance.... Mental health benefits.... Financial wellness programs.... Health checks."

Wilkins Finston Friedman Law Group LLP

The HEROES Act: Key Retirement, Health and Welfare, and Tax Provisions

"[T]he Act reflects the House Democratic majority's priorities, and some of the provisions could be included as part of a bipartisan compromise package. This alert first summarizes key provisions of the HEROES Act impacting retirement plans and health insurance. It then discusses other provisions that may impact employers and individuals."

Groom Law Group

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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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