When Retirement Plan Service Providers Use Plan Participant Data for Purposes Unrelated to a Plan: What Employers Need to Know

There is a growing trend of using participant data to cross-sell financial products unrelated to plan recordkeeping by large recordkeepers and asset custodians of employer-sponsored retirement plans. In light of the fact that plan fiduciaries are ultimately legally responsible for the management and mismanagement of a retirement plan, this trend to use participant data may raise issues for employers in their role as plan sponsors and fiduciaries.

No Surprises Act: Federal Court Invalidates Parts of the Independent Dispute Resolution Process

On February 23, 2022, the U.S. District Court for the Eastern District of Texas struck down the part of the interagency interim final rule implementing the “independent dispute resolution” (IDR) procedures created by the No Surprises Act, which took effect for calendar-year plans on January 1, 2022 (Texas Medical Association v. U.S. Department of Health and Human Services). Though the bulk of the rule remains in effect, the changes will impact health plans and the employers that sponsor them.

Treasury Department, DOL, and HHS Provide Guidance on New Flexibility in Coverage of Over-the-Counter COVID-19 Tests

On February 4, 2022, the U.S. Department of Labor (DOL), U.S. Department of the Treasury, and U.S. Department of Health and Human Services (HHS) issued subregulatory guidance that provides greater flexibility and clarifies a few points on the required coverage of over-the-counter (OTC) COVID-19 tests, which took effect for employer health plans and health insurers on January 15, 2022. The guidance, in the form of frequently asked questions (FAQs), expands on the agencies’ prior guidance, which was issued last month. That initial guidance outlined the required coverage under section 6001 of the Families First Coronavirus Relief Act (FFCRA) and established enforcement safe harbors for plans and insurers.

Washington Governor Clarifies That Employers Are Still ‘Legally Obligated’ to Pay Premiums Under the Washington Cares Act

On December 22, 2021, Governor Jay Inslee sent a letter to Washington’s Employment Security Department (ESD) ordering it to not collect premiums under the Washington Cares Fund program until the legislature addresses some of the law’s issues. The letter acknowledged that “legislative leadership has strongly encouraged the employer community to pause collection of premiums from employees.”

Washington Governor and Legislative Leaders Announce Delay in Long-Term Care Fund

On December 17, 2021, Washington Governor Jay Inslee, Senate Majority Leader Andy Billig, and House Speaker Laurie Jinkins released a joint statement announcing that the premium assessment under the Washington Cares Fund would be delayed. Employers had been set to collect premiums from Washington employees starting on January 1, 2022, but with this announcement, state leaders have “strongly encourage[d]” employers to “pause on collecting premiums.”

President Biden’s At-Home COVID-19 Testing Reimbursement Plan Still Awaiting Details

On December 2, 2021, President Joe Biden made comments announcing the White House’s plan for combating COVID-19 and the emerging new variant, Omicron. As part of the nine-step plan, President Biden announced an initiative that would require private health insurers to reimburse covered individuals for the cost of at-home COVID-19 diagnostic tests during the public health emergency.

Employer-Provided COVID-19 Testing: An Employee Benefits Q&A

Although the fate of the Occupational Safety and Health Administration’s (OSHA) rules remains in limbo, many employers are moving ahead with efforts to comply with the OSHA emergency temporary standard (ETS) that requires employers with 100 or more employees to ensure that all are fully vaccinated or subject to COVID-19 testing at least weekly.

IRS Clarifies Application of Deadline Extensions to COBRA

The Internal Revenue Service (IRS) recently issued some much-needed guidance surrounding the application of deadline extensions that the IRS and the U.S. Department of Labor (DOL) previously issued for initial elections under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) and initial and subsequent premium payments.

Are Your Employee Benefits Plans Ready for the New Year or Is It the Same Auld Lang Syne?

Holiday season and the end of the year are both quickly approaching, and with the turning of the calendar from 2021 to 2022 come several employee benefit plan amendment deadlines and implementation requirements. Some of these changes are optional for plan sponsors to adopt so now is a good time to discuss and plan for the upcoming year.

Health Plan Surcharge for Unvaccinated Employees: New Guidance Provides a Roadmap

Employers that are considering imposing health plan premium surcharges to encourage their employees to get vaccinated have clearer guidance on how to do so without running afoul of the nondiscrimination rules under the Health Insurance Portability and Accountability Act of 1996 (HIPAA).

Both vaccination surcharges and incentives are permitted by HIPAA, provided that a plan complies with the requirements for “activity-only” wellness programs under the HIPAA regulations. Importantly, that means limiting the amount of the health plan surcharge or incentive generally to 30 percent of the total cost of coverage under the health plan, and providing a reasonable alternative way to avoid the surcharge if it is medically inadvisable for an individual to get the COVID-19 vaccine.

 

Sixth Circuit Rules Interest Rate Methodology Selected by Plan Actuary in Withdrawal Liability Calculation Violates ERISA

In a rare victory for employers that participate in multiemployer pension plans, the Sixth Circuit Court of Appeals held that the interest rate memorialized in the Segal Blend actuarial assumption was inappropriate to use in a withdrawal liability calculation because it is not based on “anticipated experience under the plan.”

It’s Not Over ‘Til It’s Over: The COBRA Premium Subsidy Is Ending

As we mentioned in our May 23, 2021, article, the American Rescue Plan Act of 2021 (ARPA) provides a 100 percent premium subsidy for continuation coverage under the Consolidated Omnibus Budget Reconciliation Act (COBRA) between April 1 and September 30, 2021, for certain assistance eligible individuals (AEIs). A part of an employer’s and plan administrator’s obligation is to notify AEIs that their subsidies are about to expire. Due to the timing requirements described below, plan administrators and their third party administrators must notify affected COBRA participants that their COBRA premium subsidies are ending soon.

Federal Agencies Issue HIV Preventive Services Guidance for Health Benefit Plans

The U.S. Department of Labor, U.S. Department of Health and Human Services, and U.S. Department of the Treasury recently issued regulatory guidance on the requirement that health plans cover pre-exposure prophylaxis (PrEP) treatment—“a comprehensive intervention comprised of antiretroviral medication and essential support services”—on a first-dollar basis for individuals at high risk of contracting human immunodeficiency virus (HIV).

New Guidance Delays Some Key CAA and Other Health Benefit Effective Dates

New regulatory guidance from three federal agencies that enforce private-sector benefits laws will make employers’ daunting 2021 health benefit to-do lists slightly—but only slightly—more manageable heading into 2022. Most importantly, the frequently asked questions (FAQ) guidance delays several of the most challenging 2021 and 2022 compliance requirements under the Consolidated Appropriations Act, 2021 (CAA) and the Patient Protection and Affordable Care Act (ACA): so-called “advanced explanations of benefits” (EOBs) providing good-faith estimates of the out-of-pocket costs for scheduled medical services; a “price comparison tool” to enable participants to compare cost-sharing amounts for specific network providers; extensive drug cost information that was to have been reported to the federal regulators in December 2021; and public pricing disclosures related to in-network rates, out-of-network allowed costs, and prescription drug prices.

Washington’s New Long-term Care Benefit Program: Important Deadlines Loom!

In 2021, Washington established a long-term care benefit program for Washington workers called the WA Cares Fund. In short, the program implements a mandatory 0.58 percent payroll deduction on employee wages to create a state trust fund, which, beginning in 2025, will be used to fund certain long-term care costs for eligible Washington workers. Each eligible Washington worker is entitled to a lifetime benefit of up to $36,500, which will be adjusted annually for inflation. The regulatory scheme implementing the program is still being developed, and we will update the below information on our Washington blog about the program as the regulatory rules are finalized and implemented.

Encouraging Employees to Get COVID-19 Vaccinations: Are Healthcare Surcharges the Answer?

The number of U.S. workers choosing to be vaccinated plateaued earlier this summer. As a result, employers, many of which hoped to return employees to the workplace in early fall, were left to debate whether to require employees to get vaccinated or to merely “strongly encourage” vaccination. Although many mandatory vaccination policies may pass legal scrutiny, they may nonetheless raise cultural tensions and raise the risk of losing employees in an already tight labor market.

Initial No Surprises Act Regulations Provide Some Clarity for Employer Plans

Plan participants can be hit with surprise medical bills when they receive care from out-of-network providers. Sometimes, this happens when participants do not know that the care they are receiving is from an out-of-network provider, like when they have surgery at an in-network facility only to find that the facility-appointed anesthesiologist, for example, is out-of-network.  Now, employers have a bit more clarity about how those surprise medical bills are supposed to be paid, beginning January 1, 2022, under new “No Surprises Act” regulations.

EEOC Roundup, Part III: 7 EEOC Policy Topics for Employers to Keep on the Radar in 2021 and Beyond

Our previous articles in this spotlight series on the U.S. Equal Employment Opportunity Commission (EEOC) highlighted the agency’s enforcement and litigation metrics and political composition of the Commission—matters that underscore how the Commission has and will address current pressing policy issues, such as employer-provided COVID-19 vaccination incentives. In particular, the unique “upside down” nature of the Commission (i.e., two Democrats who control the agenda but are outnumbered by three Republicans) will impact the substantive issues that the Commission will address in the coming months. In this third part of our series, we highlight some of the potential substantive policy developments that employers may want to track as the EEOC navigates through 2021 and beyond.

SAS 136: The New Audit Standard for Employee Benefit Plans and Its Impact on Plan Sponsors

The American Institute of Certified Public Accountants (AICPA) issued a new audit standard for employee benefit plans in July 2019. The new standard is commonly referred to as SAS 136, but its official name is “Statement on Auditing Standards (SAS) No. 136, Forming an Opinion and Reporting on Financial Statements of Employee Benefit Plans Subject to ERISA.”  Although SAS 136 imposes new duties on auditors, plan sponsors also have increased responsibilities under this new standard.