Health & Welfare Plans Newsletter

August 6, 2020

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[Guidance Overview]

Administering COBRA Notices in the COVID-19 World of Extended Deadlines

"[S]ome plan administrators are considering the possibility of just restarting all the COBRA periods (whether it is the election period or premium payment period) at the end of the outbreak period. The primary consideration seems to be ease of administration.... Here are some of the key issues to consider ... [1] Adverse selection risk.... [2] Reconciling the extension with prior communications.... [3] Addressing claims and coverage issues.... [4] Impact of other coverage during the outbreak period.... [5] Is the plan insured or self-insured?"

HR Daily Advisor

[Guidance Overview]

IRS Releases ACA Shared Responsibility Affordability Percentage for 2021

"Many employers use the FPL safe harbor to develop employee contributions for self-only coverage to avoid ACA assessments under 4980H. Using the FPL safe harbor also simplifies ACA reporting and coding of Form 1095-C. In determining the maximum self-only contribution amount that a calendar year plan can charge in 2021 under the FPL safe harbor ... [t]he maximum monthly contribution will be 9.83% of $12,760, divided by 12, or $104.53."

Buck

[Guidance Overview]

Massachusetts Dept. of Paid Family and Medical Leave Releases Final Regs

"The Department has significantly modified the regulations concerning exemptions through adoption of a private plan. While employers may continue to apply for an exemption from medical leave, family leave, or both, the final regulations prohibit the grant of an exemption for a private plan that covers only a portion of the workforce.... The final regulations also devote substantial attention to the intersection of state and private plans and the avoidance of coverage gaps if there is a transition between the two."

Littler

Updated FMLA Forms Are Easier to Use

"[T]he Notice of Eligibility/Rights and Responsibilities form (WH-381) articulates in greater detail employers' and employees' rights and obligations associated with FMLA leave and potential consequences if those obligations are not met. It also includes a clearer statement of employees' rights with respect to their health benefits and reinstatement upon return ... [and] better addresses issues related to the substitution of paid leave."

Reinhart Boerner Van Deuren s.c.

New York Federal Court Invalidates Several Provisions of FFCRA Regs

"With the work-availability requirement no longer in place, it is unclear how FFCRA leave will apply going forward with respect to various employer responses to work slowdowns or closure orders ... [T]he question remains as to whether a 'health care provider' for purposes of exclusion from FFCRA leave is limited to those individuals who satisfy the FMLA's limited definition ... [In] those situations where intermittent FFCRA leave is generally permitted under the regulations, employers must permit employees to take such leave intermittently.... [E]mployers should not require the submission of documentation as a precondition to taking FFCRA leave.... [T]he full extent of Monday's ruling -- and its geographic reach -- are as yet unknown[.]" [New York v. U.S. Dept. of Labor, No. 20-3020 (S.D.N.Y. Aug. 3, 2020)]

Bryan Cave Leighton Paisner LLP

District Court Largely Rejects DOL Arguments and Sides with State of New York on Implementation of FFCRA

"[T]he decision appears to allow employers to request documentation where the leave is 'foreseeable' and does not appear to preclude an employer from obtaining documentation after leave is approved.... [The court also ruled that] FFCRA leave is available to employees who need to take leave even if the employer does not have work available.... This ruling will likely be appealed to the Second Circuit, and it is unclear whether the Circuit Court will stay its application pending a determination on appeal." [New York v. U.S. Dept. of Labor, No. 20-3020 (S.D.N.Y. Aug. 3, 2020)]

Wilson Elser

Seattle's Mandate for Healthcare Expenditures for Hotel Employees Survives ERISA Challenge

"The court noted that employers can satisfy the ordinance with a health plan or cash compensation, so no ERISA plan is required. While the ERISA Industry Committee (ERIC) intends to appeal the ruling, covered employers should review their health plan designs and strategy for compliance. Seattle has issued final rules for the Improving Access to Medical Care for Hotel Employees Ordinance and set up a website that includes waiver forms and Q&As clarifying certain provisions in the law." (ERISA Indus. Comm. v. Seattle, No. 18-1188 (W.D. Wash. May 8, 2020))

Mercer

Caution Advised iconThird Circuit: Out-of-Network Provider's Suit Against Insurer Not Preempted by ERISA

"As plan anti-assignment clauses increasingly block providers from pursuing recovery through benefit assignments, out-of-network providers may seek ad hoc arrangements regarding payment for services not covered by a plan. The insurer in this case conceded that the claims would not be preempted by ERISA if they were governed by a freestanding contract identifying the discrete services to be performed and the amount to be paid, with no mention of the plan. Even when ERISA preemption is a consideration, this case demonstrates that ERISA's preemptive reach is not unlimited, and liability under state law is possible." [The Plastic Surgery Center, P.A. v. Aetna Life Ins. Co., No. 18-3381 (3d Cir. Jul. 17, 2020)]

Thomson Reuters / EBIA

Caution Advised iconTenth Circuit Holds Nondeferential Standard of Review Applies Because Discretionary Authority Provision Was Not Disclosed

"Unless the plan document grants the decisionmaker discretionary authority to interpret and administer the plan and to make factual determinations, the less favorable de novo standard of review applies. And, as shown here, even if discretionary authority language appears in the formal plan document, deferential review may be lost if the discretionary authority provision is not disclosed in the SPD." [Lyn M. v. Premera Blue Cross, No. 18-4098 (10th Cir. Jul. 24, 2020)]

Thomson Reuters / EBIA

Massachusetts Legislature Considering Bills That Would Provide COVID-Related Paid Sick Time

"[The bill] would provide up to 80 hours of paid sick time to employees who need to take time off from work for certain reasons related to the current COVID-19 public health emergency and who are not currently eligible for paid sick time under the [FFCRA].... Sick time provided by employers to employees under the proposed legislation will be reimbursed by the state. The maximum amount an employee may receive for sick time is capped at $850 per week."

Seyfarth Shaw LLP

Will the New Executive Order on Telehealth Changes Be Permanent?

"Claims data that came into CMS regarding spring visits show that nearly half of all Medicare fee-for-service primary care visits were provided through telehealth in April 2020. CMS data showed that even when offices began to open in May, telehealth visits continued.... In the next 30 to 60 days, we should see a flurry of activity as many federal agencies respond to the executive order."

Nixon Peabody LLP

New Guidance Allows Premium Credits for Consumers

"Premium credits can be given for one or more months, but the policy is temporary and extends only through the end of the calendar year. Insurers that offer coverage through HealthCare.gov must notify CMS about premium credits before October 1, 2020."

Katie Keith, in Health Affairs

Benefits in General

[Guidance Overview]

Editor's PickIRS Approves Plan Allowing Employees to Annually Choose Between Profit Sharing Plan and HRA Contributions

"The IRS noted that, while employees would be permitted to make an annual irrevocable election of contributions to the plans, they would not be permitted to elect to have the contributions paid in cash or used towards taxable benefits. Accordingly, the IRS ruled that the proposed amendment to the profit sharing plan will not cause the plan to be treated as offering a cash or deferred arrangement pursuant to section 401(k)."

The Wagner Law Group

Editor's PickSide by Side Comparison: Electronic Disclosure Rules for Retirement and Welfare Plans

"The DOL recently provided retirement plans with a new method to comply electronically with certain participant disclosure and notice requirements.... This new method adds to the previously issued DOL safe harbor and the IRS rules. [This chart provides] a side-by-side general comparison to help plan administrators keep track of when each method may be used, and what requirements must be met."

Proskauer

Press Releases

CalPERS Chief Investment Officer Yu (Ben) Meng Resigns
CalPERS [California Public Employees' Retirement System]

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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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