Health & Welfare Plans Newsletter

June 10, 2020

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View COVID-19 News and Resources

[Guidance Overview]

Editor's Pick The PCORI Fee Returns: Due July 31 at Increased Rate of $2.54

"2019 was originally the final year PCORI fees were destined to be filed.... [U]nder the Further Consolidated Appropriations Act, 2020 ... the fee was extended for 10 more years, until 2029.... [T]he IRS has now released the fee for plan years ending on or after October 1, 2019 and before October 1, 2020, which includes 2019 calendar plan years that will report and pay the PCORI fee this July. The guidance also provides calculation transition relief for employers who may not have anticipated the need to identify the number of covered lives for plan years in that period."

ABD Insurance & Financial Services

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[Guidance Overview]

The PCORI Fee Is Back! Annual PCORI Filing Due to IRS by July 31

"In response to the COVID-19 pandemic, the IRS has provided extensions to various corporate and individual tax filings due in 2020. To date, the IRS has not provided any such extension to the Form 720 filings due July 31, 2020.... The amount of the fee due this July 31 varies, depending on when in 2019 the payor's plan year ended. The fee is $2.45 per covered life for plan years ending between Jan. 1 and Sept. 30, 2019, and is $2.54 per covered life for plan years ending between Oct. 1, 2019, and Sept. 30, 2020."

Lockton

[Guidance Overview]

Approaching Fast: July 31 Deadline for PCORI Fee Payment

"The PCORI Fee is considered an excise tax that must be reported on IRS Form 720 for the second quarter reporting period. It is due by July 31 of the year following the last day of the plan year being reported on.... The Fee is not assessed against most healthcare flexible spending accounts, as well as employee assistance, disease management, and wellness programs not providing significant medical care benefits, and plans covering primarily employees working outside the United States. A plan sponsor is also able to treat multiple self-insured plans with the same plan year as a single plan for reporting and payment purposes."

Burnham Benefits

[Guidance Overview]

Editor's Pick IRS Addresses Section 213 Medical Expense Deduction and Direct Primary Care Arrangements

"[A Direct Primary Care Arrangement [DPCA]) is a contract between an individual and a primary health care provider under which the provider agrees to furnish medical care for a set annual or periodic fee without billing a third party.... Under the proposed regulations, ... an HRA may reimburse DPCA fees.... For individuals in DPCAs, the type of coverage provided by the DPCA affects whether the individual is an eligible individual for purposes of the HSA rules under Code Section 223."

Thomson Reuters Practical Law

[Guidance Overview]

Massachusetts Releases Proposed Amendments to State's PFML Law

"The New Proposed Amendments incorporate new definitions of key terms and provide ... guidance regarding the requirements for private plan exemptions. Additionally, the New Proposed Amendments present information pertaining to applications for benefits, exclusions, and requirements under the law."

Epstein Becker Green

[Guidance Overview]

California Extends Paid Family Leave Benefits

"SB 83 extends the duration an employee may receive Paid Family Leave (PFL) benefits from six weeks to eight weeks effective July 1, 2020.... SB 83 increases the wage replacement benefit for low-wage workers to up to 90% of their gross wages. Arguably, the ticking time bomb in SB 83 is the requirement that the Governor submit a proposal extending PFL to six months by 2022."

Liebert Cassidy Whitmore

Editor's Pick Drivers of 2021 Health Insurance Premium Changes: The Effects of COVID-19 (PDF)

"How COVID-19 will affect 2021 premiums depends on assumptions related to: [1] The emergence of subsequent COVID-19 waves in 2020 or in 2021. [2] Whether non-COVID-19 utilization continues to be deferred or eliminated in 2021 or whether treatment deferred in 2020 is provided in 2021. [3] The pandemic's economic effects on shifts in insurance coverage and risk pool composition, and [4] COVID-19 testing and treatment costs, the availability of new treatments and vaccines, increases in mental health and substance treatment needs, changes to telehealth utilization and costs, and changes to provider reimbursement rates."

American Academy of Actuaries

Mental Health Stigma In the Workplace

"Of the 2,000+ workers surveyed, 77% get health insurance from their employer. A majority (61%) of these workers are satisfied with the mental health coverage offered as part of their overall health plan. However, many employers are still falling short in educating their workforce about mental health, illuminating the gap between mental health coverage and mental health education. In fact, more than half of those [surveyed] never received information from their employer about mental health."

Maestro Health

[Opinion]

ECFC Letter to Congressional Representatives in Support of the Family Savings Flexibility Act (PDF)

"Because of the COVID-19 pandemic, employees may not have incurred the health care and dependent care expenses that they anticipated when they elected to have their compensation reduced and contributed to a health FSA or DCAFSA. By allowing the rollover of these amounts into the following plan year, these employees will not face the potential forfeiture of those amounts. [The Family Savings Flexibility Act (HR 7008)] also recognizes the fact that the current contribution limit for DCAFSAs of $5,000 -- set 20 years ago -- has not kept up with inflation by increasing the contribution limit."

Defined Contribution Institutional Investment Association [DCIIA]

Benefits in General

When Does Fraud Not Mean Fraud? Second Circuit Further Educates Us About Equitable Remedies

"This week, the Second Circuit ... went back only 60 years to cite cases explaining that, in a court of equity, 'fraud' does not mean what you were taught in law school. Fraud has a broader meaning in equity than at law. The intention to defraud or to misrepresent are not a necessary. Rather, 'fraud' in a court of equity properly includes all acts, omissions, and concealments which involve a breach of legal or equitable duty, trust, or confidence, 'justly reposed, and are injurious to another.' You get this education for free. For Verizon, it might cost them $571,200 plus attorneys' fees and costs. Why?' [Sullivan-Mestecky v. Verizon Communications Inc., No. 18-1591 (2nd Cir. June 1, 2020)]

Kantor & Kantor

Recent Developments in Employee Benefits Law (PDF)

10 pages. "This article surveys recent developments in employee benefits law from Fall 2018 through Fall 2019. In particular, this survey reviews six decisions issued by United States Circuit Courts of Appeals during this time frame. Last year, the Circuit Courts provided important analysis regarding ... the 'actual knowledge' standard under Section 413(2), the pleading standard of employer 'stock drop' lawsuits, cross-plan offsetting of overpayments, fee investment litigation, and mandatory arbitration provisions. This article surveys key cases from the last year on these topics."

Alston & Bird, and Katten Muchin Rosenman LLP, via Tort Trial & Insurance Practice Law Journal

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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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