Health & Welfare Plans Newsletter

June 17, 2020

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[Guidance Overview]

Proposed IRS Rule Would Allow HRA Reimbursement for Direct Primary Care and Healthcare Sharing Ministry Fees

"[P]recisely how the [direct primary care arrangement (DPCA)] is designed, and what it pays for impacts the employee's eligibility to make HSA contributions, determines ERISA's applicability to the DPCA, and might trigger [ACA] protections, COBRA and other issues.... [B]ecause the IRS views employee pretax contributions as employer contributions, even an employee-pay-all DPCA fee arrangement might trigger HSA disqualification if the employees' fees are paid with pretax salary reductions via a cafeteria plan."

Lockton

[Guidance Overview]

Direct Primary Care Arrangements and Health Care Sharing Ministries Receive Favorable Tax Treatment Under Proposed Regs

"This footnote indicates that a [direct primary care (DPC)] arrangement funded by an employer, presumably including employee pre-tax contributions, would create a group health plan. The Proposed Regs do not otherwise address what would happen if an employer offered or paid for a DPC arrangement ... [M]any state laws do regulate DPCs as insurance. So, while the Proposed Regs are favorable from a federal tax perspective, there are a myriad of other compliance issues that an administrator or employer would need to address before making this arrangement available to employees."

Groom Law Group

[Guidance Overview]

HHS Issues Final Rule on Section 1557

"For now, gender identity is excluded from Section 1557 under the final rule.... The final rule limits the scope of which entities are 'covered' -- and so must comply -- with the rule. Under the final rule, to be captured, an entity must be 'principally engaged in health care' or, for entities outside of that scope, the particular activity must be funded by HHS."

Seyfarth Shaw LLP

[Guidance Overview]

IRS Outlines Changes to Health Care Spending Available Under CARES Act

"Under the CARES Act, a high deductible health plan (HDHP) temporarily can cover telehealth and other remote care services without a deductible, or with a deductible below the minimum annual deductible otherwise required by law. Telehealth and other remote care services also are temporarily included as categories of coverage that are disregarded for the purpose of determining whether an individual who has other health plan coverage in addition to an HDHP is an eligible individual who may make tax-favored contributions to his or her HSA.... The CARES Act also modifies the rules that apply to various tax-advantaged accounts (HSAs, Archer MSAs, Health FSAs, and HRAs) so that additional items are 'qualified medical expenses' that may be reimbursed from those accounts."

Internal Revenue Service [IRS]

[Guidance Overview]

San Francisco and San Jose Mandate Emergency Paid Sick Leave to Cover FFCRA Coverage Gaps

"San Francisco has reenacted the ordinance and it will remain in effect for another 61 days, unless it is reenacted, or the Public Health Emergency is terminated.... [The ordinance] now applies to employees providing labor or services for a fee in San Francisco, no longer requiring the 56-hour requirement. Whether an individual is an employee is determined using California's new AB5 standard (ABC Test) and whether the individual is an employee under the rules governing San Francisco's pre-existing Paid Sick Leave Ordinance."

Fisher Phillips

Minneapolis Wins the Battle Over Sick and Safe Time Mandate

"On June 10, 2020, the Minnesota Supreme Court held state law does not preempt the Minneapolis Sick and Safe Time Ordinance (SST Ordinance), and the ordinance can apply to employers located outside Minneapolis. The SST Ordinance requires employers to provide for protected sick and safe time (SST) for covered employees, requires employers to track the accrual and use of leave time, and, for employers of six or more employees, mandates that SST be paid. The ordinance covers 'any individual employed by an employer. .. who perform[s] work within the geographic boundaries of the City for at least eighty [80] hours in a year.' " [Minnesota Chamber of Commerce vs. City of Minneapolis, No. A18-1077 (Minn. Jun. 10, 2020)]

Littler

The Uncertain Future of Texas Paid Sick Leave Ordinances

"On June 5, 2020, the Texas Supreme Court ... denied a petition from the City of Austin to review a state appellate court decision holding that Austin's paid sick leave ordinance is unconstitutional and preempted by the Texas Minimum Wage Act.... [A]fter months without any further movement, the court offered no reason for its refusal to review the case." [Texas Ass'n of Business v. City of Austin, No. 3-18-00445-CV (Tex. 3d App. Nov. 16, 2018; pet. for review denied Jun. 5, 2020)]

Littler

In Life Insurance Coverage Dispute, a District Court Goes Against the Tide in Favor of Equitable Remedies

"The confusing nature of the pleadings aside, the Court's decision seems at odds with the recent trend in ERISA cases. All the relevant information was in the hands of the plan sponsor. Premiums were paid. Coverage was confirmed. Yet no liability was found." [Staropoli v. Metropolitan Life Ins. Co., No. 19-2850 (E.D. Penn. Jun. 8, 2020)]

Kantor & Kantor

Editor's Pick Troubling Pattern of COVID-19 Workplace Litigation Begins to Emerge

"As an increasing number of employees return to work, employers should be aware that a number of COVID-19-related lawsuits raising FMLA and ADA concerns have already begun to emerge. What do employers need to know in order to avoid being on the receiving end of such a claim?"

Fisher Phillips

Self-Funding Details Drive Performance

"The self-funded employer can: [1] Realize claims savings ... [2] Enjoy greater transparency ... [3] Increase cash flow ... [4] Have access to data ... [5] Have better control ... [6] Experience easier compliance ... [7] Enjoy network choices."

Corporate Synergies

Editor's Pick HIPAA Compliance for Work-from-Home or Telehealth Programs: Frequently Overlooked Considerations

"Complete a new HIPAA risk analysis.... Revise your policies accordingly.... Test your contingency plans.... Adjust your privacy notices and consents.... Make sure your contracts are compliant with applicable privacy laws."

Carlton Fields

Physicians Say High-Deductible Health Plans Cause Patients to Delay Care

"55% of physicians surveyed [by the Physicians Advocacy Group and the National Opinion Research Center] said patient cost concerns are causing them to change how they prefer to time treatments. 66% have changed their decision about whether to prescribe drugs. 61% changed the type of medical treatment provided. 86% have changed which types of drugs they prescribe."

HealthLeaders Media

State Relief and Empowerment Waivers: State-Based Reinsurance Programs (PDF)

"Twelve states have used section 1332 waivers to waive the [ACA] single risk pool requirement ... The data tables presented in [this paper] provide an overview of the state-based reinsurance programs implemented using section 1332 waivers, including relevant information about premiums, issuer participation, and enrollment." [CCIIO Data Brief, June 2020]

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

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Final 5500-SF Due 6/30/2020 -- Can We Wait Until July?

"So I have a plan that terminated and their final Form 5500-SF and Form 8955-SSA are due 6/30/20. We are waiting for them to pay our final bill before filing. Because of the automatic extension, if I filed it between 7/1 and 7/15/20, do I have to check any box on the form? Or just send it in like normal?"

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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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