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June 11, 2020 logo logo
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View COVID-19 News and Resources

[Official Guidance]

Text of IRS Notice 2020-46: Treatment of Amounts Paid to Section 170(c) Organizations Under Employer Leave-Based Donation Programs to Aid Victims of the Coronavirus Disease (COVID-19) Pandemic (PDF)

"Cash payments an employer makes to section 170(c) organizations in exchange for vacation, sick, or personal leave that its employees elect to forgo will not be treated as wages (or compensation, as applicable) to the employees or otherwise be included in the gross income of the employees if the payments are: [1] made to the section 170(c) organizations for the relief of victims of the COVID-19 pandemic in the affected geographic areas; and [2] paid to the section 170(c) organizations before January 1, 2021. Similarly, employees electing to forgo leave will not be treated as having constructively received gross income or wages (or compensation, as applicable)."

Internal Revenue Service [IRS]

[Guidance Overview]

IRS Updates PCORI Fee Amount; Payment Due by July 31

"[T]he guidance provides transition relief by also allowing plan sponsors to use any reasonable method for calculating the number of covered lives for plan years ending on or after October 1, 2019, and before October 1, 2020.... Plan sponsors should use Form 720 to pay the fee. However, as of [June 9, 2020], Form 720 had not yet been updated to reflect the new fee for plan years ending on or after October 1, 2019, through December 31, 2019." [Editor's note: Updated Instructions for IRS Form 720 have been issued.]


[Guidance Overview]

IRS Issues New Proposed Rule on Health Care Sharing Ministries and Direct Primary Care

"On June 8, 2020, the [IRS] issued a short proposed rule that would allow employers to reimburse employees for fees for direct primary care and health care sharing ministries through a health reimbursement arrangement (HRA).... The proposed rule, by giving tax-advantaged status to these types of arrangements, could result in even higher enrollment in ministries. This could damage the [ACA] individual market by further segmenting the risk pool between ACA-compliant plans and ministries. Comments on the proposed rule are due in 60 days."

Katie Keith, in Health Affairs

[Guidance Overview]

IRS Provides Participant-Friendly Guidance for Cafeteria Plans in Light of COVID-19

"For any mid-year changes in health coverage, the employer will want to communicate with its insurer (if insured) and stop loss carrier (if self-insured) to make sure the insurer agrees to the changes and that they can be implemented effectively. If an employer wants to make any of these changes, it will need to formally adopt an amendment to accomplish them. [Notice 2020-29] grants a fairly generous amount of time to do this."

Lathrop GPM

[Guidance Overview]

Oakland Passes Emergency Paid Sick Leave Ordinance

"Oakland's ordinance is broader and more generous than the FFCRA's EPSL.... [1] Oakland's ordinance applies to all employers with 50 or more employees.... [2] [T]he ordinance expands the reasons for which an employee may use Oakland's EPSL.... [3] [T]he ordinance allows an employee to receive his or her entire salary ... [4] [T]he ordinance allows employers to 'credit the total sick leave hours' provided to an employee under the FFCRA against the requirements for EPSL under the ordinance."

Ogletree Deakins

[Guidance Overview]

Washington, DC's Paid Leave Program Starts July 1

"Guidance on the exceptions process says that employees working in the city during a particular quarter and reported by the employer to the district's UI program are always covered by the UPL law, with no exceptions. Employees also are covered by the UPL law if their work performed outside of the district consists of just isolated transactions or is temporary, transitory or incidental.... Work performed outside the city is considered 'incidental' when the location of the work is not essential to its performance, so teleworking is considered incidental."


ERISA Lawsuits Target United HealthCare Reimbursements Practices

"The Glendale Outpatient Surgery Center's [GOSC's] ERISA lawsuit  ... claims that [United HealthCare] skimped on reimbursement for services rendered by GOSC to United HealthCare patients. On May 19 the Ninth Circuit dismissed the lawsuit ... The fatal flaw was that the lawsuit did not identify a specific ERISA plan or plan terms that would have required payment.... [T]he history of complaints against United HealthCare provides background beyond the story of a lawsuit that appears to have been inadequately pled." [Glendale Outpatient Surgery Center v. United Healthcare Services, Inc., No. 19-55412 (9th Cir. May 19, 2020; unpub.)]

IRS Proposes Regs on Direct Primary Care, Other Medical Arrangements

"[H]ealth FSAs are not mentioned in the proposal. However, they would seem to be prohibited from reimbursing amounts paid for direct primary care arrangements or health care sharing ministries to the extent these expenses are treated as payments for insurance. Also, while an HRA might reimburse direct primary care expenses, care should be taken to ensure that the arrangement does not otherwise fail to comply with health care reform's mandates and requirements."

Thomson Reuters / EBIA

Benefits in General

[Official Guidance]

Text of IRS Notice 2020-47: Public Recommendations Invited on Items to Be Included on the 2020-2021 Priority Guidance Plan (PDF)

"The Department of the Treasury and the [IRS] invite the public to submit recommendations for items to be included on the 2020-2021 Priority Guidance Plan.... Please submit recommendations for guidance by Wednesday, July 22, 2020 ... Taxpayers are not required to submit recommendations for guidance in any particular format."

Internal Revenue Service [IRS]

[Guidance Overview]

COVID-19 Sent Many Employees Home to Work Remotely -- Remember to Reimburse their Expenses

"Illinois law requires employers to reimburse employees for work-related expenses, subject to certain restrictions. Due to the risks of liability employers face under Illinois law for unreimbursed work-related expenses, it is important for employers to have a written reimbursement policy in place and to reimburse employees for qualifying expenses in a timely manner. With large numbers of employees now working from home for an extended time, it is crucial for employers to contact their employees regularly and remind them to submit any qualifying expenses for reimbursement."

Masuda Funai

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Insurer Premium Rebates/Reductions = MLRRs?

"Some health insurance carriers are reducing premiums or providing rebates due to lower utilization of medical services so the issue arises whether the employer has to 'share' the savings with employees. My view is that these are essentially an advance payments of Medical Loss Ratio Rebates that the insurers would normally be sending later in the year, and therefore need to be 'shared' with employees as we do with MLRRs. Anybody taking a contrary position?"

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Press Releases

Nominations Due Friday, June 12, 2020: Plan Sponsor Excellence & Innovation Awards
Defined Contribution Institutional Investment Association [DCIIA]

Most Popular Items in the Previous Issue

Recent Developments in Employee Benefits Law (PDF)
Alston & Bird, and Katten Muchin Rosenman LLP, via Tort Trial & Insurance Practice Law Journal, Inc.
1298 Minnesota Avenue, Suite H
Winter Park, Florida 32789
(407) 644-4146

Lois Baker, J.D., President
David Rhett Baker, J.D., Editor and Publisher
Holly Horton, Business Manager

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BenefitsLink Health & Welfare Plans Newsletter, ISSN no. 1536-9595. Copyright 2020, 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, 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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