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COVID-19 Updates

COVID-19-Related Benefits Compliance Resources Available

April 13, 2021

The Benefits Compliance team provides several resources that are available for assistance during the COVID-19 crisis. Information presented through our resources is subject to change pending additional guidance from the DOL, IRS, or other state or federal regulatory agencies.

FAQs on Benefits and Compliance and COVID-19

Families First Coronavirus Response Act (FFCRA) Flowchart

COVID-19 State Quick Reference Chart

DOL Issues COVID-19 Relief via Certain Notice Extensions for Employee Benefit Plans

Compliance Considerations on Insurance Carrier Refunds in the COVID-19 Environment

IRS Announces New Guidance for Section 125 Cafeteria Plans and Related High Deductible Health Plans, and IHCRAs

Benefits Compliance COVID-19 Weekly Updates and FAQs Webinars
Refer to the NFP insights page for the archived webinars from March 24, March 31, April 7, April 14, April 21, April 28, May 5, May 12, May 19, and May 26, 2020)

COVID-19 – State Leave Provisions: New York

COVID-19 – State Leave Provisions: New Jersey

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Congressional Research Service Issues Report Regarding Payroll Tax Credit for COVID-19 Sick and Family Leave

April 13, 2021

On April 1, 2021, the Congressional Research Service (CRS) updated its Payroll Tax Credit for COVID-19 Sick and Family Leave report, providing details regarding the payroll tax credits associated with the extended paid leave originally provided by the Families First Coronavirus Response Act (FFCRA) available through the American Relief Plan Act of 2021 (ARPA).

The report summarizes the history of the payroll tax credits, noting the requirements under the FFCRA, the Consolidated Appropriations Act of 2021 (CAA) and the ARPA. As background, the FFCRA required certain employers to provide paid leave via emergency paid sick leave (EPSL) and expanded FMLA for specified reasons. The CAA extended the tax credits related to EPSL and expanded FMLA through March 31, 2021, but extending the FFCRA leave was optional for employers. The ARPA further extended the FFCRA-related tax credits now through September 30, 2021 (again, if an employer chooses to allow such leave).

In particular, the report highlights a few modifications provided by the ARPA related to the payroll tax credits, including:

  • The 80-hours of EPSL resets for leave taken after March 31, 2021.
  • Expanded FMLA per-employee limit is increased to $12,000.
  • Payroll tax credits are available for sick leave taken to receive a COVID-19 vaccine (or for leave taken while waiting for COVID-19 test results).
  • State and local governments, as well as certain non-profits, can claim the payroll tax credit.
  • Payroll tax credits are claimed against the Medicare (HI) tax.
  • If paid leave is permitted, it must be provided to all employees who qualify.

The report further explains that under the FFCRA, payroll tax credits were not available to state and local government employers (including school districts and public colleges), even though such employers were required to provide leave. However, ARPA allows certain government employers access to the payroll tax credits if they voluntarily choose to provide paid leave described above.

While the report does not provide any new guidance, it serves as a reminder of the payroll tax credits available for employers who choose to permit paid leave through September 30, 2021.

Payroll Tax Credit for COVID-19 Sick and Family Leave »

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IRS Announces that Personal Protective Equipment Can Be Treated as Medical Expenses

March 30, 2021

On March 26, 2021, the IRS issued announcement 2021-7, indicating that personal protective equipment (PPE) can be treated as medical expenses under §213(d) of the IRC. Specifically, PPE, including masks, hand sanitizer and sanitizing wipes, can be deducted on individual taxpayers’ taxes or reimbursed under FSAs, Archer MSAs, HSAs and HRAs.

The PPE may be reimbursed through the reimbursement programs listed above beginning on or after January 1, 2020. Group health plan sponsors will need to amend their plan documents to reflect this change by December 31, 2022.

Plan sponsors should be mindful of this guidance. While the announcement does not require an employer communication be sent to employees, employers should work with their service providers and vendors to facilitate this change to their plans.

Announcement 2021-7 »

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IRS Extends the Individual Tax-Filing Deadline

March 30, 2021

On March 17, 2021, the IRS issued news release IR-2021-59, announcing that the federal income tax filing due date for individuals for the 2020 tax year will be extended from April 15, 2021, to May 17, 2021. On March 29, 2021, the IRS also released Notice 2021-21, providing additional guidance on the extension. This extension comes as the IRS acknowledges that many people are still experiencing tough times due to the pandemic.

The announcement explains that all individual taxpayers (including self-employed individuals) with a return or payment due on April 15, 2021, will have until May 17, 2021, to file their taxes. Similarly to last year’s extension, taxpayers do not need to have been impacted by COVID-19 to access this relief. Additionally, the relief extends to 2020 federal income tax payments (including payments of tax on self-employment income) due on April 15, 2020. (Unlike last year’s extension, this extension does not apply to estimated tax payments that are due on April 15, 2021; estimated tax payments are quarterly payments made by those whose income isn’t subject to income tax withholding.)

As a result of the extended filing deadline, taxpayers now also have until May 17, 2021, to make 2020 contributions to their HSAs and IRAs. Employers with April 15, 2020, filing deadlines may also have additional time to make 2020 contributions to certain workplace retirement plans.

The announcement also mentions that residents of the states of Louisiana, Oklahoma and Texas will have until June 15, 2021, to file and pay their taxes (as a result of the federally declared winter storm disaster in those states). This extension of the filing deadline for the entire country does not affect that extension; it is still June 15, 2021.

The IRS has indicated that they will provide additional guidance in the coming days. In the meantime, employers should be aware of the tax deadline extension.

IR-2021-59 »
IRS Notice 2021-21 »
IR-2021-43 (on extension for winter storm victim states) »

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COVID-19-Related Benefits Compliance Resources Available

March 30, 2021

The Benefits Compliance team provides several resources that are available for assistance during the COVID-19 crisis. Information presented through our resources is subject to change pending additional guidance from the DOL, IRS, or other state or federal regulatory agencies.

FAQs on Benefits and Compliance and COVID-19

Families First Coronavirus Response Act (FFCRA) Flowchart

COVID-19 State Quick Reference Chart

DOL Issues COVID-19 Relief via Certain Notice Extensions for Employee Benefit Plans

Compliance Considerations on Insurance Carrier Refunds in the COVID-19 Environment

IRS Announces New Guidance for Section 125 Cafeteria Plans and Related High Deductible Health Plans, and IHCRAs

Benefits Compliance COVID-19 Weekly Updates and FAQs Webinars
Refer to the NFP insights page for the archived webinars from March 24, March 31, April 7, April 14, April 21, April 28, May 5, May 12, May 19, and May 26, 2020)

COVID-19 – State Leave Provisions: New York

COVID-19 – State Leave Provisions: New Jersey

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COVID-19-Related Benefits Compliance Resources Available

March 16, 2021

The Benefits Compliance team has provided several resources that are now available for assistance during the COVID-19 crisis.

Information presented through our resources is subject to change pending additional guidance from the DOL, IRS, or other state or federal regulatory agencies.

Benefits Compliance COVID-19 Weekly Updates and FAQs Webinars
Refer to the NFP insights page for the archived webinars from March 24, March 31, April 7, April 14, April 21, April 28, May 5, May 12, May 19, and May 26, 2020)

COVID-19 – State Leave Provisions: New York

COVID-19 – State Leave Provisions: New Jersey

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CMS Issues FAQs Regarding FFCRA and CARES Act COVID-19 Testing and Vaccination Requirements

March 02, 2021

On February 26, 2021, CMS, in partnership with the DOL, HHS and Treasury, issued a set of 14 FAQs that address FFCRA and CARES Act issues. Specifically, the FAQs cover issues relating to the requirement that plans and issuers cover COVID-19 testing and vaccinations without cost sharing and other requirements. The FAQs also discuss the circumstances under which an employer can offer COVID-19 vaccines through an EAP or an on-site medical clinic. Finally, the FAQs include information about how providers may seek federal reimbursement when delivering COVID-19 related services to the uninsured.

The FFCRA includes a requirement (as amended by the CARES Act), that group health plans and health insurance issuers offering group or individual health insurance coverage, including grandfathered health plans, provide benefits for certain items and services related to diagnostic testing for COVID-19, without imposing any cost-sharing requirements, prior authorization or other medical management requirements. The CARES Act also requires non-grandfathered group health plans and health insurance issuers offering non-grandfathered group or individual health insurance coverage to cover, without cost sharing, qualifying coronavirus preventive services, including recommended COVID-19 vaccines.

Coverage of previous FAQs on this topic can be found in NFP’s Latest Insights page COVID-19-Related Benefits Compliance Resources Available (nfp.com)

This document stresses that these requirements apply when an individual seeks and receives a COVID-19 diagnostic test from a licensed or authorized healthcare provider, or when a licensed or authorized healthcare provider refers an individual for a COVID-19 diagnostic test. Under these circumstances, plans and issuers must assume that the receipt of the test reflects an “individualized clinical assessment,” and the test should be covered without cost sharing, prior authorization or other medical management requirements.

The FAQs further apply this concept by pointing out that the requirement covers such testing for asymptomatic persons who are not known to be exposed to COVID-19, but it does not cover such testing when it is done for public health surveillance or employment purposes (which are not administered under the same conditions as an “individualized clinical assessment”). However, plans are encouraged to cover such testing and to clearly communicate with plan participants when the testing is covered and when it is not, and to implement programs to prevent fraud and abuse.

The FAQs point out that the FFCRA and the CARES Act make no distinction between point-of-care and other tests, and that the statutes make no distinction as to where the tests are administered; if they are “individualized clinical assessments” then they must be covered.

The requirements also apply to:

“items and services furnished to an individual during healthcare provider office visits (including in-person visits and telehealth visits), urgent care center visits and emergency room visits that result in an order for or administration of an in vitro diagnostic product, but only to the extent that the items and services relate to the furnishing or administration of the product or to the evaluation of the individual for purposes of determining the need of the individual for that product.”

Plans are encouraged to implement (and document) policies and procedures that protect participants from inappropriate cost sharing. Similarly, plans are encouraged to provide information regarding providers and their rates to participants to minimize the risk that providers charge too much for these items and services.

In addition to testing, the FAQs also cover preventative services. Plans and issuers are reminded that the CARES Act requires that they provide coverage without cost sharing for all COVID-19 vaccines that have been recommended by the federal government as well as their administration. Plans and issuers must cover these preventive services without cost sharing starting no later than 15 business days (not including weekends or holidays) after the date the United States Preventive Services Task Force (USPSTF) or the Advisory Committee on Immunization Practices of the CDC (ACIP) makes an applicable recommendation regarding a qualifying coronavirus preventive service. Plans and issuers must cover these vaccines regardless of how the service is billed or how many shots it takes to complete the vaccination regimen. The FAQs also point out that the vaccines must be covered even if the recipient received it “out of turn” (that is, if the recipient is not considered a priority recipient, such as a person with high risk of complications if they contract COVID-19).

The FAQs also remind plans and issuers that the DOL will not take enforcement action if they implement these requirements without providing participants 60-days' advance notice of the changes, as required by the ACA SBC provision. However, plans and issuers must provide such notice to participants as soon as reasonably practicable.

Finally, the FAQs stress that employers may offer COVID-19 testing and vaccinations through an EAP, if it meets certain requirements. These services are not considered excepted benefits if they are “significant.” Benefits are considered significant based on the nature of the medical care, and the amount, scope and duration of covered services. However, the FAQs state:

“An EAP will not be considered to provide benefits that are significant solely because it offers benefits for COVID-19 vaccines and their administration (including when offered in combination with benefits for diagnosis and testing for COVID-19). However, there must be no cost sharing under the EAP for benefits under the EAP to constitute excepted benefits and the EAP must also comply with other applicable requirements.”

Employers can also provide COVID-19 vaccines through on-site medical clinics under all circumstances.

Employers should be aware of these clarifications of the FFCRA and CARES Act requirements.

FAQS about FFCRA and CARES Act Implementation, Part 44 »

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COVID-19-Related Benefits Compliance Resources Available

March 02, 2021

The Benefits Compliance team has provided a number of resources that are available for assistance during the COVID-19 crisis. Information presented through our resources is subject to change pending additional guidance from the DOL, IRS or other state or federal regulatory agencies.

FAQs on Benefits and Compliance and COVID-19 »

Families First Coronavirus Response Act (FFCRA) Flowchart »

COVID-19 State Quick Reference Chart »

DOL Issues COVID-19 Relief via Certain Notice Extensions for Employee Benefit Plans »

Compliance Considerations on Insurance Carrier Refunds in the COVID-19 Environment »

IRS Announces New Guidance for Section 125 Cafeteria Plans and Related High Deductible Health Plans, and IHCRAs »

Benefits Compliance COVID-19 Weekly Updates and FAQs Webinars
Refer to the NFP insights page for the archived webinars from March 24, March 31, April 7, April 14, April 21, April 28, May 5, May 12, May 19, and May 26, 2020)

COVID-19 – State Leave Provisions: New York

COVID-19 – State Leave Provisions: New Jersey

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DOL Issues Clarification on the Extension of Certain Timeframes for Employee Benefits Plans

March 02, 2021

On Friday, February 26, 2021, the DOL released EBSA Disaster Relief Notice 2021-01 (the “clarifying notice”). The notice provides guidance on the duration of the COVID-19 relief that was originally provided in the Notice of Extension of Certain Timeframes for Employee Benefit Plans, Participants and Beneficiaries (the “notice of extension”). (We discussed this notice in the May 15, 2020, edition of Compliance Corner.)

Background

Recognizing the potential difficulties for group health plans to comply with certain notice obligations due to the COVID-19 public health crisis, and to minimize the possibility of individuals losing benefits due to a failure to timely meet requirements, the Departments of Labor and the Treasury extended certain timeframes for group health plans, disability and other welfare plans, and pension plans in May of 2020.

The relief provided that all group health plans, disability and other employee welfare benefit plans, and employee pension plans subject to ERISA or the Code were required to disregard the period from March 1, 2020, until 60 days after the end of the national emergency (known as the “outbreak period”) for certain deadlines, including:

  • The 30-day (or 60-day, if applicable) deadline to request a special enrollment under HIPAA.
  • The 60-day COBRA election period.
  • The 30-day (or 60-day, if applicable) deadline to notify the plan of a COBRA qualifying event (and the 60-day deadline for individuals to notify the plan of a determination of a disability).
  • The 14-day deadline for plan administrators to furnish COBRA election notices.
  • The 45-day deadline for participants to make a first COBRA premium payment and 30-day deadline for subsequent COBRA premium payments.
  • Deadlines for individuals to file claims for benefits, for initial disposition of claims, and for providing claimants a reasonable opportunity to appeal adverse benefit determinations under ERISA plans and non-grandfathered group health plans.
  • Deadlines for providing a state or federal external review process following exhaustion of the plan’s internal appeals procedures for non-grandfathered group health plans.

The statute that the DOL and IRS relied upon to provide these extensions appeared to allow for extensions of up to one year. As a result, many in the employee benefits industry concluded that the relief would only last until February 28, 2021 (which was one year from the March 1, 2020, effective date of the notice of extension).

EBSA Disaster Relief Notice 2021-01

However, in the clarifying notice the DOL stated that the extension of timeframes will continue until the earlier of a) one year from the date an individual or plan is first eligible for relief or b) 60 days after the announced end of the national emergency (the end of the outbreak period). Since the pandemic is ongoing, and the president has not announced an end to the national emergency, the outbreak period has not ended.

The DOL’s clarifying notice further explains that the duration of the relief provided under the notice of extension is statutorily limited to a period of one year from the date the individual action would otherwise have been required or permitted. So instead of the one-year limit being assessed from the effective date of the notice of extension, it is assessed based on when an individual or plan first needed to utilize the relief. This means that until the end of the outbreak period, the period that is disregarded will vary depending on when the triggering deadline occurs. For some purposes, this will result in a participant-by-participant analysis of the extension of certain timeframes.

Examples

Notably, this explanation of the relief clarifies how it will apply in different scenarios. Consider the following examples:

  • Under normal circumstances, a COBRA-qualified beneficiary whose COBRA election period began January 2, 2020, would be required to make a COBRA election by March 1, 2020. However, because the disregarded period can only last one year, this individual had until February 28, 2021, to elect COBRA.
  • A COBRA-qualified beneficiary whose COBRA election period began June 1, 2020, would have normally been required to make a COBRA election by July 30, 2020. However, due to the disregarded period, this individual now has until end of the outbreak period or July 29, 2021, whichever is earlier, to make a COBRA election.
  • A COBRA-qualified beneficiary whose COBRA election period began February 15, 2020, would have their COBRA election period disregarded beginning on March 1, 2020. The disregarded period would last through February 28, 2021, and then they would receive the balance of their 60-day COBRA election period (roughly 45 days).
  • An employee has a baby on August 20, 2020. The plan normally allows 30 days from the date of birth for the employee to request a HIPAA special enrollment. The disregarded period would last until the earlier of the end of the outbreak period or August 19, 2021, and then the 30-day special enrollment election period would begin.
  • An employer’s health FSA has a claims submission date of 90 days following the end of the plan year, which would have been March 31, 2020, for the 2019 plan year. The disregarded period began March 1, 2020, and continued for one year through February 28, 2021, after which FSA participants will have an additional 30 days to submit claims (the balance of their claims submission period).

Employer Action

Many employers must continue to honor the extended timeframes for individuals who become eligible to make certain elections in 2020 or 2021. Currently, only individuals who became eligible to make these elections at the very beginning of the COVID-19 pandemic will have exhausted their timeframes under this relief. So employers will need to work with their vendors and plan administrators to ensure that timelines are being administered in accordance with the new understanding of the DOL’s guidance.

To avoid the possibility of individuals losing benefits, the DOL expects employers to notify plan participants or beneficiaries that their relief period has ended or will end. Additionally, employers should consider reissuing plan disclosures that were issued during the pandemic in order to provide accurate information regarding the deadline by which individuals will need to act. The DOL also encouraged employers to provide information about the opportunity to obtain coverage through the federal or state exchanges.

Since the pandemic continues to disrupt plans’ operations, the DOL will continue to provide enforcement relief for fiduciaries who act in good faith and with reasonable diligence under the circumstances.

The NFP Benefits Compliance team will continue to review the new guidance and provide clarifying materials where possible. Employers should work with their service providers to continue to comply with this requirement.

EBSA Disaster Relief Notice 2021-01 »
Extension of Certain Timeframes for Employee Benefit Plans, Participants, and Beneficiaries Affected by the COVID-19 Outbreak Final Rule  »

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IRS Issues Information Letter Regarding DCAP COVID-19 Relief

February 17, 2021

On December 31, 2020, the IRS released Letter Number 2020-0027 that addressed a question concerning whether a person with unused funds in a DCAP can have those funds reimbursed to him because his child did not attend summer camp due to COVID-19 and he did not anticipate any further childcare expenditures for the rest of the year.

The IRS stated that, although 2020 COVID-19 relief did give plans flexibility in allowing mid-year changes in DCAP elections, it did not override the requirement that DCAP funds cannot be returned except to reimburse the participant for employment-related childcare expenses.

Information letters are not legal advice and cannot be relied upon for guidance. Taxpayers needing binding legal advice from the IRS must request a private letter ruling. While the letter does not provide any new guidance, this letter does provide general information that may be helpful to employers with questions on this topic.

Letter Number 2020-0027 »

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