Health & Welfare Plans Newsletter

July 10, 2020

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View COVID-19 News and Resources

[Guidance Overview]

Editor's Pick IRS Temporarily Relaxes Cafeteria Plan Midyear Election Change and FSA Rules

"Employers will need to engage with their cafeteria plan vendor to coordinate the implementation of any changes and to identify any potential issues or limitations, such as vendor capabilities. Employers wishing to adopt the claims period extension will also need to determine whether FSA forfeitures have already been applied to pay for plan expenses. If so, the employer will likely have to restore these amounts.... [E]mployers should consider how the changes will be communicated to employees, in accordance with ERISA (particularly for Health FSAs)."

Jones Walker

[Guidance Overview]

Recent COBRA Developments Call for Employer Attention

"The [DOL's] posting of revised model COBRA notices, the extension of various key COBRA deadlines and several class actions filed against employers for allegedly deficient COBRA notices all highlight the need to revisit COBRA compliance."

Davis Wright Tremaine LLP

[Guidance Overview]

Key Changes to Rules Implementing ACA Nondiscrimination Provisions

"The Final Rule makes clear that health insurance companies are not considered to be principally engaged in the provision of healthcare solely because they sell health insurance, if not doing so through one of the marketplaces. Due to this change, many health insurers will likely argue that when the rule changes take effect, Section 1557 no longer applies to them, or if it does, only to a small portion of its program. Benefits administrators may or may not be able to make a similar argument."

Dickinson Wright PLLC

[Guidance Overview]

IRS Addresses Employer Reporting Rules for FFCRA Credits and Self-Employed Individuals

"The Form W-2 reporting requirements at issue in the IRS's guidance will help self-employed individuals who also receive qualified paid leave wages from an employer determine the amount by which they must reduce their claimed qualified sick leave equivalent or qualified family leave equivalent tax credits."

Thomson Reuters Practical Law

[Guidance Overview]

CMS Relaxes Timelines for MLR Reporting and Rebates Due to COVID-19

"CMS has issued a bulletin announcing that, as a result of updates to HHS's risk adjustment timelines due to the COVID-19 emergency, it will not take enforcement action against an insurer that submits the 2019 MLR annual reporting form by August 17, 2020, instead of the usual July 31 deadline. In addition, CMS will not take enforcement action against an insurer that prepays part or all of its estimated 2019 MLR rebate before filing its 2019 MLR annual reporting form, either as a premium credit before September 30, 2020, or as a lump-sum check or reimbursement."

Thomson Reuters / EBIA

[Guidance Overview]

Sacramento, Santa Rosa, and San Mateo County Enact Emergency Paid Sick Leave Ordinances

"[T]hree local governments in Northern California enacted emergency paid sick leave ordinances.... In part, these laws aim to fill gaps left by the federal [FFCRA] ... [This article] separately address[es] what each ordinance requires, demonstrating how differently cities may approach implementation of emergency paid sick leave ordinances. These varying approaches further complicate the patchwork of emergency paid sick leave requirements in California, which includes a statewide mandate for certain food sector workers and now nine local ordinances."

Littler

[Guidance Overview]

COVID-19 Leaves of Absence: How-To Guides for Large and Small Employers in New Jersey

"Some employment laws vary depending on a company's size as measured by the number of employees. These flowcharts -- one for employers with fewer than 500 employees and one for those with 500 or more -- apply to leave requests through the end of 2020. They are designed to help businesses navigate the web of intersecting city, state and federal leave laws and regulations such as the [FFCRA], the New Jersey Family Leave Act and the New Jersey Earned Sick Leave Law."

Fox Rothschild LLP

COBRA: A Closer Look at Who Enrolls and the Case for Subsidies

"COBRA beneficiaries are more likely than those receiving coverage through a full-time employee to have certain health conditions ... and they are more likely to have spent more days in a hospital than those receiving coverage through a full-time employee. The average COBRA beneficiary uses more health care services and spends significantly more than the average person covered by insurance via a full-time employee.... Subsidies can help reduce adverse selection against COBRA plans."

Employee Benefit Research Institute [EBRI]

How Flexible Is Your Health Plan's PBM Partner?

"Characteristics of the most flexible PBMs [include] [1] Health plan representation on the Pharmacy and Therapeutics Committee.... [2] The opportunity to guide formulary and [utilization management] criteria.... [3] Acceptance of upside and downside risk.... [4] Mutually beneficial performance goals.... [5] Accountable, customized performance reporting for your market.... [6] Preferred, exclusive and custom arrangements for specialty drug management."

Evolent Health

Supreme Court Says Broad Exemption from Contraceptives Mandate Can Survive ... for Now

"The majority of employers sponsoring group medical plans provide cost-free contraceptives to their female members and are willing to do so without regard to mandates and exceptions. For those employers the court's ruling is inconsequential. But for those employers that hold religious or moral objections to contraceptives, the court's ruling allows them to maintain the status quo, at least for now." [Little Sisters of the Poor Saints Peter and Paul Home v. Pennsylvania, No. 19-431 (S. Ct. Jul. 8, 2020)]

Lockton

Almost Half of Adults in Families Losing Work During the Pandemic Avoided Health Care Because of Costs or COVID-19 Concerns

"Almost half (45.5 percent) of adults in families losing work or work-related income reported unmet need for medical care in the family because of costs in the 30 days before the survey and/or avoidance of care because of concerns about exposure to the coronavirus. Among adults in families losing work or work-related income because of the outbreak, more than half of those with lower incomes and those with uninsured family members, those in families with chronic conditions, and parents living with children under 19 were in families that avoided health care because of cost or concerns about exposure to the coronavirus."

Urban Institute

About 5% of Adults in Families Losing Jobs During the Pandemic Also Lost Employer-Sponsored Health Insurance

"Though coverage did not change between March/April and May for the overall sample, adults in families losing jobs reported a 4.9 percentage-point decline in [employer-sponsored insurance] during this period, from 59.0 percent to 54.1 percent, and a 3.5 percentage-point increase in private nongroup coverage, from 7.9 percent to 11.4 percent."

Urban Institute

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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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