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.
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.
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.
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.”
Employer-sponsored health plans can add air ambulance claims reporting to the list of required disclosures that will go into effect in the next several years.
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.
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 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.
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.
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.
On July 26, 2021, the Internal Revenue Service (IRS) released Notice 2021-46 to provide additional guidance on the Consolidated Omnibus Budget Reconciliation Act (COBRA) subsidy under the American Rescue Plan Act of 2021 (ARPA). On May 18, 2021, the IRS released Notice 2021-31 to address issues related to subsidy eligibility and calculation of the tax credit.
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.
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.
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.
Participants in dependent care assistance programs (DCAPs) will get the best of both worlds (at least in 2021) under new guidance from the Internal Revenue Service (IRS).
The American Rescue Plan Act of 2021 (ARPA) implemented a 100 percent COBRA subsidy for certain qualified beneficiaries beginning on April 1, 2021, and ending September 30, 2021. On May 18, 2021, more than a month into the subsidy period, the Internal Revenue Service (IRS) released Notice 2021-31. This guidance, provided in the form of questions and answers (Q&As)—86 Q&As!—addresses issues of interest to employers, including issues related to reporting the Medicare tax credit and receiving advance payment of payroll tax credits that exceed Medicare taxes owed and withheld. Here are the key takeaways for employers.
The first part of this two-part blog series focused on the Biden administration’s first 100 days and reviewed the administration’s legislative plans. The second part of the series addresses policy developments occurring at the executive branch agencies and independent agencies.
The Consolidated Appropriations Act (CAA), 2021 had far-reaching effects on employee benefit plans. One of the more onerous changes introduced by the CAA relates to the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA). MHPAEA requires that group health plans offering mental health and substance use disorder benefits (MH/SUD benefits) provide those benefits on no less generous terms than medical and surgical benefits.
April 30, 2021, marked President Joe Biden’s 100th day in office, and his administration has wasted little time advancing its policy priorities. At this moment, the administration is focusing most of its attention on repealing much of the policy accomplishments of the previous administration but can be expected to advance its own proposals in short time. Additionally, Democrats in the U.S. House of Representatives are looking for ways around the U.S. Senate’s legislative filibuster in order to advance their ambitious legislative agenda. Below is a very brief outline of the major labor and employment legislative actions of President Biden’s first 100 days.
On May 10, 2021, the Internal Revenue Service (IRS) announced the 2022 health savings account (HSA) annual contribution limit and the 2022 high deductible health plan (HDHP) definitional limit per Internal Revenue Code Section 223.
Retirement plans are increasingly subject to cybersecurity issues, and the U.S. Department of Labor (DOL) is taking notice. On April 14, 2021, the DOL published cybersecurity guidance “for plan sponsors, plan fiduciaries, record keepers and plan participants on best practices for maintaining cybersecurity, including tips” for hiring service providers and online security tips for participants. In recent years, DOL guidance that eased rules related to electronic communications to plan participants might have helped make participants more susceptible to phishing attempts that masquerade as official plan communications.
The new 100 percent premium subsidy applies to individuals eligible for Consolidated Omnibus Budget Reconciliation Act (COBRA) coverage due to either a reduction in hours or an involuntary termination of employment, and it applies for the period from April 1, 2021, to September 30, 2021. The U.S. Department of Labor (DOL) has already produced model notice forms and initial guidance consisting of a summary sheet and frequently asked questions (FAQs). Employers are still awaiting formal regulations and guidance from the Internal Revenue Service (IRS).
More than a year into the COVID-19 pandemic, employers are happy to be more focused on vaccine issues than on issues relating to furloughs and layoffs.
Less than a month after the American Rescue Plan Act of 2021 (ARPA) was signed into law, new U.S. Department of Labor (DOL) guidance and model forms are clearing up a number of employer concerns about the 100 percent COBRA coverage subsidy for continuing health benefits that runs from April 1, 2021, to September 30, 2021.
The U.S. Department of Labor’s (DOL) Employee Benefits Security Administration (EBSA) published EBSA Disaster Relief Notice 2021-01 in the nick of time on February 26, 2021. EBSA Disaster Relief Notice 2021-01 was released just two days before the date that certain benefit plan deadline extensions were potentially expiring. The DOL and the Internal Revenue Service (IRS) issued joint guidance on May 4, 2020, which provided that certain employee benefit plan deadlines for participants would be tolled or suspended during the COVID-19 “Outbreak Period,” which began on March 1, 2020, and which ends 60 days after the end of the COVID-19 national emergency. Certain deadlines applying to plan administrators were also tolled last year as set forth in EBSA Disaster Relief Notice 2020-01.
On February 26, 2021, the U.S. Department of Labor (DOL), U.S. Department of Health and Human Services (HHS), and the U.S. Department of the Treasury issued guidance entitled “FAQs About Families First Coronavirus Response Act and Coronavirus Aid, Relief, and Economic Security Act Implementation Part 44.” The guidance addresses frequently asked questions (FAQs) that stem from the requirements under the FFCRA and CARES Act that group health plans and issuers cover COVID-19 testing (including certain related items and services) and vaccinations without cost sharing during the public health emergency declared by HHS. The declared public health emergency is expected to be in place until at least the end of 2021.
On February 26, 2021, the U.S. Department of Labor, along with the U.S. Department of Health and Human Services and the U.S. Department of the Treasury, issued answers to new frequently asked questions (FAQs) interpreting certain provisions of the Families First Coronavirus Response Act and the Coronavirus Aid, Relief, and Economic Security (CARES) Act. This article reviews the portion of the FAQs that directly apply to employer vaccination incentive programs. Previous guidance addressed coverage requirements for COVID-19 vaccines and diagnostic testing.
The American Rescue Plan Act of 2021 (ARPA), which became law on March 11, 2021, provides a 100 percent subsidy of premiums under the Consolidated Omnibus Budget Reconciliation Act (COBRA) beginning on April 1, 2021, through September 30, 2021, with employers to recoup the missing premiums through Medicare tax credits.
On March 11, 2021, President Joe Biden signed the American Rescue Plan Act of 2021 (ARPA). The ARPA is the latest installment of COVID-19–related stimulus packages passed by Congress in the last 12 months. Similar to the Families First Coronavirus Response Act (FFCRA) and the Coronavirus Aid, Relief, and Economic Security Act (CARES) Act, the ARPA contains a number of employee benefit plan and executive compensation provisions, which are highlighted below.
We had pondered when this day would come. The doomsday scenario that the Pension Benefit Guaranty Corporation (PBGC) would become insolvent in five to six years is now old history. (The new estimated time of PBGC insolvency is the mid-2040s.) Plan participants, the plans, employers, unions, and the PBGC had all been patiently waiting for relief—and they have apparently been rewarded with the relief they were seeking.