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BCLP Benefits 3Q Review: IRS, DOL, & PBGC Guidance

In this edition of our newsletter, we have summarized key third quarter guidance from the Internal Revenue Service, Department of Labor, and Pension Benefit Guaranty Corporation. As we look back on the third quarter of 2020, there has been a noticeable shift at the federal level from a focus on guidance related to the COVID-19 pandemic and the Congressional response in the first half of the year to a return to executing the regulatory agendas of the federal agencies and the priorities of President Trump’s administration. Despite this shift, federal agencies have continued to issue new, amended, or extended COVID-19 guidance as the circumstances of the COVID-19 pandemic continue to evolve. We have, therefore, included both COVID-19 and non-COVID-19 guidance in this newsletter and group the summaries by these categories.

Read the full newsletter by clicking here.

If you have any questions about a topic included in this newsletter, please contact a member of our Employee Benefits & Executive Compensation Group.

Additional COVID-19 Extensions = Greater Administrative Headaches for Plan Sponsors

As any employer is keenly aware, the administration of an employee benefit plan (especially a group health plan) involves a number of different deadlines imposed under the Employee Retirement Income Security Act (ERISA) and the Internal Revenue Code (Code).  Amidst concerns that the current COVID-19 pandemic may cause individuals to lose benefits due to the failure to meet certain pre-established deadlines and in recognition of the challenges group health plans may face in complying with certain notice obligations, the Department of Labor and Internal Revenue Service (collectively, the “Agencies”) jointly published notice in the Federal Register of a significant extension in application of the following statutorily prescribed deadlines:

Special Enrollment Periods

  • 30-day deadline to request enrollment in the event of a loss of eligibility for other health coverage or the acquisition of a new dependent due to marriage, birth, adoption or placement for adoption
  • 60-day deadline to request enrollment in the event of either a loss of eligibility for coverage under Medicaid or a state children’s health insurance coverage (CHIP) or gaining eligibility for premium assistance through Medicaid or CHIP.

COBRA Continuation Coverage

  • 30-day period for employer to notify plan administrator of certain COBRA qualifying events
  • 14-day period for plan administrator to issue COBRA Election Notice to qualified beneficiary
  • 60-day period for qualified beneficiary to elect COBRA continuation coverage
  • 45-day period for qualified beneficiary to submit initial COBRA premium payment
  • 30-day period for qualified beneficiary to submit subsequent COBRA premium payments
  • Qualified beneficiary’s

Families First Coronavirus Response Act Part 2 of 2: Impact on Employer Health Plans

The Families First Coronavirus Response Act (“FFCRA”) enacted March 18 provides a combination of benefits to help U.S. employees during the COVID-19 pandemic:

  • Mandated benefits under employer health plans,
  • Paid sick leave benefits (up to 80 hours) – click here for our discussion of the paid sick leave benefits,
  • FMLA benefits (up to 12 weeks with a combination of paid and unpaid leave) – click here for our discussion of the FMLA benefits,
  • Tax benefits to ease the cost to certain small employers of providing health care coverage under the newly expanded sick leave and FMLA benefits noted above click here for a discussion of the FMLA benefits – click here for our discussion of the small employer tax credits.

The following is a summary of the mandated benefits COVID-19 testing requirements applicable to employer health plans.

COVID-19 Diagnostic Testing Coverage Requirements

Most group health plans[1] and group insurance coverage are required to cover COVID-19 testing related items and services without imposing any cost sharing (including deductibles, copayments, and coinsurance) or prior authorization or medical management requirements. The following is a summary of the key points of the FFCRA requirement:

  1. Coverage of Diagnostic Items and Services without Cost-Sharing. The specific items and services to which the coverage mandate applies include:
    1. “In vitro diagnostic products”[2] used for the detection of SARS–CoV–2 or diagnosis of the virus that causes COVID–19

Guidance on Employee Benefits and the Coronavirus (COVID-19)

As the Coronavirus has continued to spread, there has been guidance from various entities on a myriad of topics pertaining to employee benefits. Summaries and links to such guidance can be found below. This information will be updated regularly as more guidance becomes available.

The Health Insurance Portability and Accountability Act (HIPAA): The Office for Civil Rights, a division of the U.S. Department of Health and Human Services, published a bulletin outlining privacy of protected health information and when covered entities may disclose such information without a patient’s authorization. Covered entities may be able to disclose needed protected health information without individual authorization to public health authorities, to persons at risk of contracting or spreading a disease, or to prevent a serious and imminent threat, among other limited circumstances. Covered entities must make reasonable efforts to limit the information disclosed to that which is the minimum necessary to accomplish the purpose. In a prior post, we provided a review of the bulletin and ongoing HIPAA obligations for covered entities.

The Family and Medical Leave Act (FMLA): The U.S. Department of Labor released a Q&A addressing various questions about employee rights and employer responsibilities under the FMLA. Eligible employees are typically entitled to take up to 12 weeks of unpaid, job-protected leave in a designated 12-month period due to their own illness or that of a family member. Covered employers must continue to abide by federal FMLA laws as well

Deep Dive: Association Health Plans, Part 7: Business and Operational Issues Associated with Forming an AHP: Engaging an Insurance Carrier

On October 12, 2017, President Trump signed a “Presidential Executive Order Promoting Healthcare Choice and Competition Across the United States” (the “Executive Order”) to “facilitate the purchase of insurance across state lines and the development and operation of a healthcare system that provides high-quality care at affordable prices for the American people.”  One of the stated goals in the Executive Order is to expand access to and allow more employers to form Association Health Plans (“AHPs”).  In furtherance of this goal, the Executive Order directed the Department of Labor to consider proposing new rules to expand the definition of “employer” under Section 3(5) of the Employee Retirement Income Security Act of 1974 (“ERISA”).  The Department of Labor issued its proposed rule on January 5, 2018 and its final rule on June 19, 2018.

In Part 1 of this “Deep Dive” series, we examined the history of AHPs and the effects of the changes proposed by the Trump Administration by providing a high-level, summary overview of the three types of arrangements that fall under the umbrella of health arrangements sponsored by associations, which include Affinity Arrangements, Group Insurance Arrangements and AHPs.  In Part 2 of this “Deep Dive” series, we compared plan features of the three types of arrangements under current law.  In Part 3 of this “Deep Dive” series, we examined the qualification requirements for AHPs under current law.  In Part 4 of

Deep Dive: Association Health Plans, Part 4

On October 12, 2017, President Trump signed a “Presidential Executive Order Promoting Healthcare Choice and Competition Across the United States” (the “Executive Order”) to “facilitate the purchase of insurance across state lines and the development and operation of a healthcare system that provides high-quality care at affordable prices for the American people.”  One of the stated goals in the Executive Order is to expand access to and allow more employers to form Association Health Plans (“AHPs”).  In furtherance of this goal, the Executive Order directed the Department of Labor to consider proposing new rules to expand the definition of “employer” under Section 3(5) of the Employee Retirement Income Security Act of 1974 (“ERISA”).  The Department of Labor issued its proposed rule on January 5, 2018.

In Part 1 of this “Deep Dive” series, we examined the history of AHPs and the effects of the changes proposed by the Trump Administration by providing a high-level, summary overview of the three types of arrangements that fall under the umbrella of health arrangements sponsored by associations, which include Affinity Arrangements, Group Insurance Arrangements and AHPs.  In Part 2 of this “Deep Dive” series, we compared plan features of the three types of arrangements under current law.  In Part 3 of this “Deep Dive” series, we examined the qualification requirements for AHPs under current law.  In this installment of the “Deep Dive” series, we will examine the qualification requirements for AHPs under the

Deep Dive: Association Health Plans, Part 3

On October 12, 2017, President Trump signed a “Presidential Executive Order Promoting Healthcare Choice and Competition Across the United States” (the “Executive Order”) to “facilitate the purchase of insurance across state lines and the development and operation of a healthcare system that provides high-quality care at affordable prices for the American people.” One of the stated goals in the Executive Order is to expand access to and allow more employers to form Association Health Plans (“AHPs”). In furtherance of this goal, the Executive Order directed the Department of Labor to consider proposing new rules to expand the definition of “employer” under Section 3(5) of the Employee Retirement Income Security Act of 1974 (“ERISA”). The Department of Labor issued its proposed rule on January 5, 2018.

In Part 1 of this “Deep Dive” series, we examined the history of AHPs and the effects of the changes proposed by the Trump Administration by providing a high-level, summary overview of the three types of arrangements that fall under the umbrella of health arrangements sponsored by associations, which include Affinity Arrangements, Group Insurance Arrangements (“GIAs”), and AHPs. In Part 2 of this “Deep Dive” series, we compared plan features of the three types of arrangements under current law.  In this installment of the “Deep Dive” series, we will examine the qualification requirements for AHPs under current law.

Current Qualification Requirements for AHPs

ERISA provides that an employee benefit plan may be maintained by an association of

Deep Dive: Association Health Plans, Part 2

On October 12, 2017, President Trump signed a “Presidential Executive Order Promoting Healthcare Choice and Competition Across the United States” (the “Executive Order”) to “facilitate the purchase of insurance across State Lines and the development and operation of a healthcare system that provides high-quality care at affordable prices for the American People.” One of the stated goals in the Executive Order is to expand access to and allow more employers to form Association Health Plans (“AHPs”). In furtherance of this goal, the Executive Order directed the Department of Labor to consider proposing new rules to expand the definition of “employer” under Section 3(5) of the Employee Retirement Income Security Act of 1974 (“ERISA”). The Department of Labor issued its proposed rule on January 5, 2018.

In Part 1 of this “Deep Dive” series, we started examining the history of AHPs and the effects of the changes proposed by the Trump Administration by providing a high-level, summary overview of the three types of arrangements that fall under the umbrella of health arrangements sponsored by associations. This week, we compare features of the three types of arrangements when such arrangements are offered on a fully-insured basis.

Plan Feature Group Insurance Arrangement Affinity Plan Association Health Plan (fully-insured) ACA plan design requirements (e.g., requirement to provide essential health benefits) Look to size of employer to determine the extent to which ACA plan design requirements apply Look to size of employer to determine the extent to which ACA plan design requirements apply ACA requirements relating

Deep Dive: Association Health Plans, Part 1

First in a Series

On October 12, 2017, President Trump signed a “Presidential Executive Order Promoting Healthcare Choice and Competition Across the United States” (the “Executive Order”) to “facilitate the purchase of insurance across State Lines and the development and operation of a healthcare system that provides high-quality care at affordable prices for the American People.” One of the stated goals in the Executive Order is to expand access to and allow more employers to form Association Health Plans (“AHPs”). In furtherance of this goal, the Executive Order directed the Department of Labor to consider proposing new rules to expand the definition of “employer” under Section 3(5) of the Employee Retirement Income Security Act of 1974 (“ERISA”). The Department of Labor issued its proposed rule on January 5, 2018.

With the renewed focus on AHPs, we will be examining the history of AHPs and the effects of the changes proposed by the Trump Administration in this “Deep Dive” series. First in our series is a high-level, summary overview of the three types of arrangements that fall under the umbrella of health arrangements sponsored by associations: Affinity Arrangements, Group Insurance Arrangements (“GIAs”), and AHPs.

Affinity Arrangements

  • A trade group or association (e.g., a local chamber of commerce) endorses a specific health plan.
  • The insurance carrier for the health plan pays a royalty to the trade group or association.
  • The insurance carrier issues standard fully-insured policies to members of the association who elect to purchase

IRS Reduces 2018 Annual HSA Contribution Limit for Family Coverage

March 6, 2018

Categories

In May 2017, the IRS issued Rev. Proc. 2017-37 announcing the inflation-adjusted health savings account contribution limits for 2018 as $3,450 for self-only coverage and $6,900 for family coverage.   However, this week the IRS issued Rev. Proc. 2018-18, which supersedes Rev. Proc. 2017-37 and reflects a decrease in the 2018 annual contribution limit for family coverage to $6,850.  Employers that provide a high deductible health plan option to their employees with a health savings account feature should ensure that their communications and systems are updated accordingly.

 

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