May 21. 2020
Good Afternoon Everyone,
We are sending the latest news and guidance released by federal agencies in response to changing needs due to COVID-19. These updates include an extension of employee benefit plan timeframes and deadlines, relaxing Section 125 Cafeteria Plan qualifying event rules, increasing the FSA rollover amount, and other HSA-related changes. Federal agencies will continue to monitor the effects of COVID-19 and may provide additional relief as warranted. Please refer to the linked notices for additional details.
Extension of Benefit Plan Timeframes and Deadlines
In a joint announcement, both agencies state that an employee benefit plan will not violate ERISA for failing to distribute a required notice, disclosure or document due during the Outbreak Period as long as the plan and responsible fiduciary act in good faith. Good-faith efforts include the use of email, text messages, and continuous-access websites to share information.
These are the events that are included in this relief:
- The 30-day QLE notification to the plan administrator
- The 30-day QLE eligibility change submission
- The 60-day COBRA election period
- The 45-day COBRA initial premium payment
- The grace period to submit ongoing COBRA payments
- The date for individuals to notify the plan of a determination of disability
- The date to file a benefit claim, including Flexible Spending and Dependent Care Accounts
- The date to file a claims appeal
- The date to file a request for external review after receiving a final claims denial
- The required notices, disclosures, or documents related to plan administration
Essentially, group employee benefit plans subject to ERISA or the Internal Revenue Code must disregard the period from March 1, 2020 until sixty (60) days after the announced end of the National Emergency. (The "Outbreak Period" is March 1st through the 60 days after the announced end of the National Emergency.) If any of the above events are due during the Outbreak Period, the deadlines start counting down after the end of the Outbreak Period. Since we are still actively under national emergency status, we don't know what exact timeframes look like. It's recommended that plan administrators continue to fulfill responsibilities as soon as reasonably and administratively possible. However, the DOL provided examples (on pages 11-15 of the notice linked above) of how this would work once the Federal Government announces the end date to the emergency status.
LINK: IRS Notice 2020-29
Section 125 Cafeteria Plan Rules
On May 12th, 2020, the IRS announced temporary flexibility for mid-year election changes under a Section 125 Cafeteria Plan during calendar year 2020. These changes are designed to allow employers to respond to changes in benefit needs as a result of the pandemic. This guidance for mid-year elections applies to self-insured and fully-insured groups and flexible spending arrangements (health FSA and DCAP).
Permitted Election Changes
- Make a new election if the employee or dependents previously declined coverage
- Change elections to a different plan offered by the employer
- Terminate an existing election to enroll in other coverage
- Cancel, increase, or decrease an existing election for a Healthcare FSA or Dependent Care FSA
Employers are allowed to choose whether to allow the above changes; however, doing so will require that you adopt a plan amendment by December 31st, 2021. These changes are also retroactive to plan years starting January 1st, 2020. It is also important to communicate these plan changes to all employees if you plan to amend your plan documents. We have been patiently awaiting carrier and administrator responses to this notice. We're unsure if ALL carriers or administrators are required to support these changes. Please contact your Client Manager as soon as possible if you intend to allow these changes so we can ensure that your plan documents can be modified.
LINK: IRS Notice 2020-33
Health FSA Rollover Increase
Since 2013, healthcare flexible spending accounts allowed unused funds up to $500 to be rolled over to the following plan year. The IRS has now announced that this carryover amount will be increasing to $550 for plan years starting in 2020 with the rollover occurring in 2021. Carriers administering FSA plans will automatically implement this change upon 2020 renewal (retroactively for plan years that started January 1st, 2020). However, employers have the option to adopt or decline this increase. Those who wish to adopt the $550 rollover will also be required to update plan documents and provide communication to all employees. Please contact your Client Manager as soon as possible if you intend to decline this rollover increase to ensure that your plan documents maintain compliance.
Health Savings Accounts
LINK: IRS Notice 2020-32
For calendar year 2021, the annual contribution limit in a Health Savings Account for self-only coverage in a high deductible health plan will be increased to $3,600 and the limit for family coverage will be increased to $7,200.
LINK: IRS Notice 2020-18
The grace period for 2019 HSA contributions has been extended to July 15th, 2020, originally April 15th, to coincide with the updated tax filing deadline.
We understand this is a lot of information to absorb with some decision making involved. We're encouraging employers to think carefully about the decisions being made about relaxing qualifying event restrictions. We're cautious of the major administrative burden that could be placed on employers, carriers, and administrators during an already stressful time. Changes require meaningful modifications to plan documents, benefit administration systems, benefit communications, and other related plan information. We're very aware the recently released guidance may be more meaningful to some employers and employees over others. We're committed to meeting your needs and welcome the conversation concerning your goals.
Wishing everyone a safe and happy Memorial Day Weekend.
Your EBS Team
April 2, 2020
Good Afternoon Everyone,
We have had some important changes since our last update including details of the CARES Act and further guidance from carriers and government agencies. Despite the further guidance released, there still remains many unanswered questions. We're hopeful this email can clear up some of the outstanding questions we have received. However, we are realistic in recognizing there are still gray areas and unique situations that lack clarity. In this release, we will be discussing the CARES Act relief for businesses and important tax vehicle changes, further FFCRA guidance from DOL and IRS, premium payment deferrals and extensions, and COVID-19 cost impacts to health plans.
CARES Act Small Business Relief and Benefit Plan Changes
On Friday March 27th, the House of Representatives passed the largest economic bill in U.S. History, and President Trump has signed the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") into law. We feel the parts of the law most pertinent to our clients will be the multiple forms of relief for small businesses as well as changes to tax vehicle eligible expenses. The US Senate Committee on Small Business and Entrepreneurship has released the Small Business Owner's Guide to the CARES Act. Included in the guide is detailed steps for business owners to understand and take advantage of the Paycheck Protection Program, Emergency Economic Injury Grant, Small Business Debt Relief Program, and other counseling and tax provisions for small businesses. Please also keep in mind that several states have also passed economic stimulus packages to help small businesses and employees. We have included links to surrounding states in our previous communications below.
Included in the CARES Act are provisions that affect employee benefits plans. The CARES Act permanently reinstated over-the-counter products as eligible expenses for Health Savings Accounts (HSA), Flexible Spending Accounts (FSA), and Health Reimbursement Arrangements (HRA) funds without needing a prescription. As many of you remember, the requirement to have a prescription for OTC products to be tax vehicle eligible was instituted under the Affordable Care Act. That provision was quite unpopular when initially passed about 10 years ago so we are certain many people will welcome the reversal. This change takes place retroactive to January 1, 2020. It is also important to note menstrual care products were added as eligible expenses under the legislation. That means employees can now use HSA, FSA, and HRA funds to purchase items such as tampons, sanitary pads, and other related menstrual care products. This change also takes place retroactive to January 1, 2020.
Keeping the theme of tax vehicles, we have received many requests related to Dependent Care Account election changes and termination given the changes in childcare related to COVID-19. The IRS allows an election change for the following reasons:
- Reduction in hours
- Change in employment status
- FMLA leave
- Substantial change in employer benefits/cost
- Change of cost from the provider
- Change of provider resulting in change of cost
Since most children are home due to school and childcare closures, many parents are not paying related costs and therefor reducing DCA elections or cancelling the election altogether. Inversely, if school is closed and parents unable to work need childcare coverage, we are seeing first time elections or increases in DCA elections. As a reminder, normal time frames for processing qualifying events still exist. Employees must request changes to their DCA elections within 30 days of the "event" occurring.
The last important benefits change to mention is the ability to temporarily allow for HDHPs with HSAs to cover any telehealth or remote care expenses even if the participant hasn't met the minimum IRS deductible. Prior to this change, most plans providing telemedicine visit claims at no cost to the participant would jeopardize the members ability to make HSA contributions. The change continues through 2020 and 2021 so this is a temporary change given the guidelines of social distancing and recommended use of telemedicine for most visits.
Further DOL and IRS Guidance for FFCRA
As many of you are keenly aware, the FFCRA went into effect April 1, 2020. When the law was originally released it lacked critical information employers and employees needed to apply the law appropriately. Since the FFCRA passage, the DOL and IRS have released fact sheets and FAQs. It is very important to recognize guidance has evolved and initial guidance has changed with further clarification. The DOL encourages everyone to check the FAQ frequently as they continue to add guidance regularly. One of the biggest changes we have seen is the stance on employees availability for paid sick leave or family leave if they can work from home (telework) but are unable to work from home for any of the covered reasons under the FFCRA. Initial guidance stated if the employee could telework they weren't entitled to paid sick or family leave. The guidance has evolved to recognize that some employees who can telework but are unable to telework because of being too sick themselves, caring for a family member, or watching children are now entitled for paid sick and family leave. Please reference questions 17 through 20 in the DOL FAQ for specific language related to this topic. I would encourage all of our employers to become familiar with the new guidance released from the DOL and IRS. The DOL encourages employers and employees to collaborate to achieve flexibility and meet mutual needs. As a reminder, you should have distributed or posted the mandatory employee rights poster by April 1.
Premium Payment Deferrals and Extensions
Most medical and ancillary carriers have provided relief for premium payment through grace period extensions or deferrals. I would please encourage any employer that is looking to exercise this relief to contact your EBS Client Manager so we can formally place your request with the appropriate carriers. We would like to mention there is currently some confusion for groups that are in the DC Health Link. The carriers and the DC Health Link are currently at odds for payment relief that is being provided. We are waiting on further clarification so we can provide proper guidance for DCHL groups. Collectively thinking about the resources from SBA and payment relief from carriers, cost related to group benefits including insurance premiums is counted towards the loan calculation and loan proceeds under the Paycheck Protection Program. With that in mind, some employers have chosen not to defer premium payment for the upcoming months.
COVID-19 Cost Impacts to Health Plans
Employers have been asking how COVID-19 testing and treatment will impact overall costs to their health plan. It is worthwhile to take a step back and capture the current environment of healthcare consumption in the US. As of last week, most non-emergent use of healthcare has predominantly been cancelled. This would include preventive care visits, evaluation and management visits, therapy visits, and elective surgeries or procedures. It also includes the labs, radiology, and imaging associated with those visits or procedures. Outside of acute care visits or prescriptions related to chronic or acute use, healthcare consumption has halted to prevent the spread of COVID-19 and to create capacity for the anticipated surge of hospitalizations. In light of this, we are predicting medical spend to be much lower than average for as long as we live in this environment. The exposure to health plans related to COVID-19 testing and treatment is extremely variable. All of it is dependent on whether members are infected and if their symptoms are severe enough to require hospitalization. According to the CDC a very small percentage of those who are infected require hospitalization. Most cases are able to be treated at home in isolation. We are also very aware that older populations including Medicare eligible and/or those with chronic conditions such as diabetes, heart disease, and respiratory problems, are at the highest risk for hospitalization. Should members require testing and treatment, the intensity of the treatment plays the largest role in dictating cost. Fair Health estimates the average cost of COVID-19 inpatient treatment to be $32,221. Ultimately how employers and insurers are impacted is largely unknown. It will largely be dictated by specific market characteristics, total exposure, and the intensity of treatment required.
We are somewhat concerned with the potential downstream costs of the COVID-19 environment. We are forecasting a rise in the gaps of care for chronic members due to the limited interaction with overseeing physicians. We would encourage members to adhere to their providers existing care plan and evidence based guidelines for their care despite the current environment. What is also potentially alarming is the rise of mental and behavioral health issues due to limited access to providers coupled with the additional burden of social distancing and isolation. We encourage the use of telemedicine for mental health visits. Some providers have adopted telemedicine capabilities internally. Many carriers or standalone telemedicine vendors offer mental health visits under their platform. Employee Assistance Programs are also an incredible resource during this time. We ask that you please remind your employees of these tools and resources available to them to help cope with any mental health challenges.
Lastly, we would like to recognize all of our clients including the business owners and HR representatives that have demonstrated heroic efforts during this time. We understand you are on the front lines dealing with employees and the severe challenges that COVID-19 has presented. For all of the negativity surrounding us, we are encouraged by the actions and stories we hear of our clients adapting their businesses and protecting their employees wherever it's possible. Small businesses and the people like you are what make this country great. We appreciate you. We are here to help however we can.
As always, wishing you health and sanity,
The EBS Team
March 27, 2020
Good Afternoon Everyone,
Our team continues to research and stay informed on the latest changes, though it seems news on all fronts is released faster than we are able to collect and disseminate. In our final update for the week, we want to bring your attention to the most relevant changes concerning your benefit programs and legislation. This update includes the most recent updates for carrier billing and eligibility relief, FFCRA Workplace Posters and FAQs, COVID-19 changes to State Paid Family and Medical Leave Laws, and information concerning the Coronavirus Aid, Relief, and Economic Security Act (CARES).
Some carriers have made adjustments to their original guidance concerning billing and eligibility relief. Please refer to the attached chart for the most up to date guidance from carriers. After much anticipation, CareFirst has finally released its response to COVID-19. CareFirst has relaxed its eligibility guidelines to cover employees who have been furloughed or laid-off as long as premiums continue to be paid. New hire and re-hire waiting periods have been waived. Employees can enroll or re-enroll on a date determined by the group. Any employee or dependent who previously waived coverage is now able to join at this time. In regards to premium relief, CareFirst is offering payment deferments of up to two months with no interest or penalty. Deferred premium needs to be satisfied over time through scheduled periodic payments. This deferment is not automatic and requests must be made to be considered. If you wish to take advantage of CareFirst's or any other carriers' financial relief offerings, please contact your EBS Client Manager as soon as possible so that we may help facilitate this arrangement with the carrier on your behalf.
FFCRA workplace posters were also recently published which require applicable employers to post them in a conspicuous place on premises. Given certain state mandated business closures, this requirement can be satisfied by emailing or direct mailing this notice to employees or by posting this notice on an employee information internal or external website. For your convenience, the links to the posters are below.
Families First Coronavirus Response Act (FFCRA) continues to be at the forefront of discussions among the industry and Federal leaders. What has largely been overlooked are the changes states have made to their existing paid family and medical leave laws in response to COVID-19. There are a total of nine states that have passed State Paid Family and Medical Leave laws. It's important to note, the states have not used same the employer size limits enacted within the FFCRA for paid leave. Please refer to the corresponding sites below for information on the states' PFML benefits for COVID-19:
- California https://www.labor.ca.gov/coronavirus2019/
- New York https://paidfamilyleave.ny.gov/COVID19
- Washington https://paidleave.wa.gov/coronavirus/
- District of Columbia (BENEFITS DON'T START UNTIL JULY 2020)
- Massachusetts (BENEFITS DON'T START UNTIL 2021)
- Connecticut (BENEFITS DON'T START UNTIL 2022)
- Oregon (BENEFITS DON'T START UNTIL 2023)
The Senate and House have both passed the Coronavirus Aid, Relief, and Economic Security Act (CARES). It is expected to be signed by the President immediately. The bill addresses economic impacts of, and otherwise responds to, the COVID-19 (coronavirus) outbreak. The bill authorizes emergency loans to distressed businesses, including air carriers, and suspends certain aviation excise taxes.
With respect to small businesses, the bill:
- establishes, and provides funding for, forgivable bridge loans; and
- provides additional funding for grants and technical assistance.
The bill also provides funding for $1,200 tax rebates to individuals, with additional $500 payments per qualifying child. The rebate begins phasing out when incomes exceed $75,000 (or $150,000 for joint filers).
The bill establishes limits on requirements for employers to provide paid leave.
With respect to taxes, the bill:
- establishes special rules for certain tax-favored withdrawals from retirement plans;
- delays due dates for employer payroll taxes and estimated tax payments for corporations; and
- revises other provisions, including those related to losses, charitable deductions, and business interest.
With respect to health care, the bill:
- provides additional funding for the prevention, diagnosis, and treatment of COVID-19;
- limits liability for volunteer health care professionals;
- prioritizes Food and Drug Administration (FDA) review of certain drugs;
- allows emergency use of certain diagnostic tests that are not approved by the FDA;
- expands health-insurance coverage for diagnostic testing and requires coverage for preventative services and vaccines;
- revises other provisions, including those regarding the medical supply chain, the national stockpile, the health care workforce, the Healthy Start program, telehealth services, nutrition services, Medicare and Medicaid.
With respect to education, the bill:
- temporarily suspends payments for federal student loans; and
- otherwise revises provisions related to campus-based aid, supplemental educational-opportunity grants, federal work-study, subsidized loans, Pell grants, and foreign institutions.
- The bill also authorizes the Department of the Treasury to temporarily guarantee money-market funds.
Lastly, you may have noticed that addressing member-level benefits related to COVID-19 has largely been absent from our emails. Our intention with our communication to you is to focus on matters that directly impact decisions you are making on a day to day basis related to your operations and benefits administration. Rest assured that our Client Care Team has been addressing employees' individual concerns about testing, claims processing, and other resources to help them understand their benefits in light of our health climate. Our service team members continue to adhere and uphold HIPAA privacy standards by keeping any employee health concerns with utmost confidentiality, whether they pertain to confirmed or suspected cases of COVID-19 or any other conditions. Our partners at ThinkHR released an FAQ this week that provides general guidance on handling workplace health, employee management, and business operations. You can lean on ThinkHR's team of trusted HR-advisors to provide any additional guidance you may need.
As always, wishing you health and sanity,
The EBS Team
March 25, 2020
Good Afternoon Everyone,
Since the distribution of our previous email, new information released daily from carriers and Federal and State governments has been rapidly changing and at times overwhelming. To provide you more targeted guidance, we have sifted through this information and have compiled what we believe is most relevant to you and your business at this time. This update includes information on premium relief and relaxed eligibility requirements as well as new guidance from the IRS and DOL on the First Families Coronavirus Response Act (FFCRA). We have also listed business and employee resources from neighboring state governments to help address some of your most pressing concerns.
Many carriers understand the financial hardships that businesses are facing in light of the coronavirus pandemic and are offering an extension of premium billing grace periods. Additionally, carriers are offering leniencies around eligibility rules during this time so that employees who may have otherwise been terminated from coverage, due to coronavirus-related reasons such as layoffs, furloughs, and reduction of hours, may continue to be covered during this critical time of health emergencies. We have taken the time to contact most major carriers. Some carriers have released official statements. Others have communicated with us through our designated representatives. A few have not supplied their response in either format and have remained mute. The attached chart details the guidelines carriers have released for billing and eligibility relief. Bear in mind that this information may change at any time and state mandates may supersede carriers' decisions on premium relief and changes to eligibility rules.
Since the passing of FFCRA, the IRS has issued additional guidance as to how employers are able to take advantage of the tax credits based on COVID-19 related paid leave that is provided to employees. The link below outlines the paid leave benefits under the Act and the tax credits for reimbursement. While we are unable to provide tax advice, we are continually monitoring for new information and guidance that may benefit you. We recommend that you seek the advice of legal counsel and/or tax professional for any tax specific questions. Separately, the DOL has released further guidance including a fact sheet for employers and employees, and FAQs. In this release, the DOL addresses critical questions, such as how an employer must count the number of their employees to determine coverage; how small businesses can obtain an exemption; how to count hours for part-time employees; and how to calculate the wages employees are entitled to under this law. Lastly, FFCRA leave, which was initially believed to be effective April 2nd, is now in effect as of April 1st.
Families First Coronavirus Response Act
Finally, we have listed resources below from surrounding states for businesses and employees affected by COVID-19. Included in the links below is:
- Each state's response to COVID-19 including health recommendations, operating statuses, a multitude of resources for affected individuals, and FAQs
- Business resources such as SBA Disaster Loans, grants, other financial and tax relief
- Employer and employee information related to unemployment benefits and other recovery funds
If you are a multi-state employer with employees located in other areas, please check the respective state's pages for more information.
State Resources for Individuals, Businesses, and Employees:
District of Columbia
As always, please do not hesitate to contact our team should you have any other questions or concerns.
March 20, 2020
As we end the first week of social distancing and as more business operations are affected by COVID-19, we want to help you navigate through these uncertain times by providing resources to keep you and your organization up to date on the latest announcements and information. We have received numerous inquiries relating to impacts on employee benefits, among other challenges and concerns. We are closely monitoring information from Federal and local governments and awaiting guidance from insurance carriers relating to possible interim relief for employers.
As it stands today, normal eligibility and billing rules apply. Employees who experience a furlough, layoff, or reduction in hours due to the loss of production caused by COVID-19 and cease to be eligible for benefits are subject to normal termination rules according to your policy contract. Employees are entitled to enroll in continuation of coverage, either through State Continuation or COBRA depending on your employer size and where applicable. Employers have the option to subsidize premiums for continuation of coverage to help alleviate some of the financial burdens employees face. Please be aware self-funded plans have the ability to change layoff provisions. Most stop-loss carriers are recognizing these changes without approval. Contact your EBS Client Manager if you would like to visit this provision and available options.
Carriers have created dedicated websites related to COVID-19 to help members and employers stay up to date on the latest news and developments, which we have listed below. If you are a self-funded employer, new legislation requires that your plans cover testing and visits related to testing at no charge to the member. Your self-funded plan administrator is paying claims according to this legislation.
Additionally, our current clients have complimentary access to a multitude of other resources through ThinkHR. If you currently do not have a ThinkHR login, please contact our team so you can be registered as a user.
If our team can be of further assistance, please don't hesitate to contact us.
Health Insurance Carrier Links for Messages and Resources:
ThinkHR Recorded Webinar: COVID-19 HR Guidance and Best Practices:
Families First Coronavirus Response Act (All Employers Under 500 Employees):
- SunLife Webinar on Wednesday, March 25th at 2:00PM ET
- Guardian Webinar on Wednesday, March 25th at 12:00PM
As employee benefits brokers, our core competency is to provide you access to medical, dental, vision, life, disability, and other insurance products. We help you navigate employee benefits through automated technologies that streamline and automate the process, such as integrated payroll, enrollment platforms, benefits administration, and Human Resource Information Systems. We keep you out of the penalty zone by advising you and providing solutions to meet your ERISA and Affordable Care Act (ACA) requirements, including reporting and distributing notices. We protect your bottom line by providing financially-focused and strategic planning, cost containment strategies, and risk management. We back all of this up with incredible customer service that is with you every step of the way. We are Employee Benefit Services. We are easier, better, smarter.