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Compliance Corner

COVID-19 Updates

COVID-19-Related Benefits Compliance Resources Available

November 09, 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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OSHA Issues COVID-19 Vaccine Mandate

November 09, 2021

The DOL’s Occupational Safety and Health Administration (OSHA), released its long-anticipated emergency temporary standard (ETS) requiring employers with a total of 100 or more employees to institute written mandatory vaccination policies for their employees. The ETS is effective November 5, 2021. The ETS pre-empts state law and regulation concerning COVID-19 vaccinations, testing and face coverings, unless the state has a plan that has been approved by the federal government.

Because this mandate primarily involves employment and labor law, employers should consult with legal counsel regarding employer compliance with the new requirements.

All employees (temporary, seasonal, part-time, full-time, remote workers) working in the US are counted for purposes of determining if an employer is subject to the ETS. Workers employed by a temporary staffing agency are counted by the agency, not the host employer. Employer size is determined on November 5, 2021. Once an employer is subject to the requirement due to size, they remain subject for the entire ETS period.

Covered employers must establish, implement and enforce the written vaccination policy, although they can provide their employees with the choice of either becoming fully vaccinated or providing proof of regular COVID-19 testing and wearing a face covering. Note that employers must provide reasonable accommodations for employees who cannot be vaccinated due to the vaccine being medically contraindicated or a disability, or when doing so conflicts with a sincerely held religious belief, practice or observance. Neither the vaccine mandate nor the testing applies to employees who do not report to a worksite with customers or other coworkers, or to employees who work exclusively outdoors.

In addition to the policy, employers subject to the ETS must provide all workers up to four hours of paid time, including travel time, for each of their primary vaccination doses received during normal work hours at the employee’s regular rate of pay. Employers must provide reasonable time and paid sick leave to each employee for recovery from side effects following any primary vaccination dose. Two days of paid sick leave is considered reasonable.

Employers must determine each employee’s vaccination status and maintain records of that status. Examples of acceptable proof of vaccination status include COVID-19 vaccination record cards, copies of records of immunization provided by a healthcare provider, and a signed attestation from the employee that they are vaccinated (if they cannot provide one of the other forms of proof). These vaccination records are confidential medical records, and the employer must maintain them accordingly.

Employees who are not fully vaccinated must be tested for COVID-19 at least weekly (if the worker is in the workplace at least once a week) or within seven days before returning to work (if the worker is away from the workplace for a week or longer). The ETS does not require employers to pay for testing, although other laws, regulations, collective bargaining agreements or other collectively negotiated agreements may require it. Employers are also not required to pay for face coverings.

If an employee tests positive for COVID-19 or receives a COVID-19 diagnosis, they must provide prompt notice to their employer. Employers must then remove the employee from the workplace, regardless of vaccination status. Employers must not allow them to return to work until they meet required criteria, which includes a negative COVID-19 test, meeting the CDC’s return to work criteria or a recommendation from a licensed healthcare provider.

Employers must comply with most requirements within 30 days of the effective date and with testing requirements within 60 days of the effective date. This means that the written policy, leave and face covering requirements must be in place by December 5, 2021. Employees must either be fully vaccinated or subjected to regular testing by January 4, 2022. Note that there is a 30-day comment period that began on the effective date as well. Comments submitted in that time will be considered by the agency and may lead to changes in the ETS.

Note that this ETS does not apply to government contractors, which are subject to their own mandates. The Biden administration issued an executive order that requires government contracts to include language instituting vaccine mandates for government contractors. This mandate applies to all employees working on or in connection with a government contract and requires them to be vaccinated. Although employers must provide reasonable accommodations, government contract employees do not have the option to be tested weekly instead of getting vaccinated. The original due date for vaccinations under this ETS was December 8, 2021, but that has been extended to January 4, 2022, to be in line with the other mandates. Information on this mandate can be found here.

In addition to the ETS, CMS issued an interim final rule (effective starting November 5, 2021) that applies to certain Medicare and Medicaid-certified providers and suppliers, which includes hospitals, home health agencies, and long-term care facilities. The rule requires staff of those providers and suppliers have their second dose of the vaccination by January 4, 2022 (although they are not required to complete the two week waiting period). The rule does not provide a weekly testing option. The rule can be found here.

Note: On November 6, 2021, the US Court of Appeals for the Fifth Circuit issued a stay on the enforcement of the ETS, citing “grave statutory and constitutional issues with the mandate.” This stay is the result of action brought by private actors and several states, including Texas, Louisiana and South Carolina, and is effective until the court takes further action. The federal government must file a response to the petitioners’ request for a permanent injunction by the end of the day on November 8, 2021. The order can be found here.

ETS (unpublished version) »
Fact Sheet »
FAQs »

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IRS Provides COVID-19 Guidance on Retiree Rehires and Qualified Pension Plan Distributions

November 09, 2021

On October 22, 2021, the IRS provided COVID-19-related guidance regarding qualified pension plan distributions. The guidance, in the form of two new frequently asked questions (FAQs), addresses the rehiring of retirees and in-service distributions.

The first FAQ focuses upon the situation in which an individual retires and then commences benefit distributions from a qualified pension plan. The plan does not provide for in-service distributions to active employees, and due to unforeseen COVID-19 related hiring needs, the employer (and plan sponsor) rehires the individual.

The specific question posed is whether the individual’s prior retirement will no longer be considered a “bona fide retirement” because of the rehiring. For plans that do not permit in-service distributions, IRS rules for plan qualification to include a bona fide retirement requirement for the individual to receive retirement benefits. Neither the Code nor the IRS defines bona fide retirement, so the determination would typically be based on the facts and the circumstances surrounding the employment termination (and whether it was potentially designed to circumvent the distribution rules).

The IRS answer indicates that a rehire due to unforeseen circumstances that do not reflect any prearrangement will not cause the individual's prior retirement to no longer be considered a bona fide retirement under the plan. Therefore, if the plan terms permit, benefit distributions could continue after the rehire. However, the guidance advises employers to review any plan terms that may prohibit the rehire of a retiree within a specified timeframe, suspend distributions upon rehire, or otherwise impact the pension benefit of a rehire.

The second FAQ asks whether a qualified pension plan can allow a working individual to commence in-service distributions. The IRS response explains that the plan terms may generally allow an individual to commence in-service distributions upon attainment of either age 59½ or the plan's normal retirement age. However, distributions commencing before age 59½ may be subject to a 10% additional premature withdrawal tax, unless an exception to the tax applies.

Retirement plan sponsors, particularly those facing unanticipated pandemic-related labor shortages, may find this guidance helpful.

Coronavirus-Related Relief for Retirement Plans and IRAs Questions and Answers »

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COVID-19-Related Benefits Compliance Resources Available

October 26, 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

Read More

IRS Clarifies Extension of Certain COBRA Election and Premium Payments Deadlines

October 12, 2021

On October 6, 2021, the IRS issued Notice 2021-58, clarifying the application of the extensions of timeframes related to COBRA. As a reminder, the extension of certain timeframes for employee benefit plans, participants, and beneficiaries required plans 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 deadlines applicable to COBRA notices and payment. Subsequent guidance clarified that the relief is available from the earlier of a) one year from the date an individual or plan is first eligible for relief or b) the end of the outbreak period.

Notice 2021-58 clarifies that the disregarded period for an individual to elect COBRA continuation coverage and the disregarded period for the individual to make initial and subsequent COBRA premium payments generally run concurrently. This means that individuals who take advantage of the extension of certain timeframes by electing COBRA continuation coverage outside of their initial 60-day COBRA election timeframe will have one year and 105 days after the date the COBRA notices was provided to make the initial COBRA premium payment. (The 105 days represents the number of days until the first payment must be made under normal COBRA rules – an initial 60 days to make an initial COBRA election plus the 45 days to make the initial COBRA premium payment.)

Alternatively, individuals who make their COBRA election within their initial 60-day COBRA election period will have one year and 45 days to make the initial COBRA premium payment.

However, the notice also provides additional relief stating that initial COBRA premium payments will not be due before November 1, 2021, as long as the individual makes their initial COBRA premium payment within one year and 45 days after their election date. They provided this relief because some individuals might not have realized that the disregarded period to make a COBRA election and the disregarded period to make an initial COBRA premium payment run concurrently. In order to avoid inequitable outcomes, in no event will an individual be required to make the initial COBRA premium payment before November 1, 2021, even if November 1, 2021, is more than one year and 105 days after the date the election notice was received.

The notice also discusses the interaction of the extension of certain timeframes with the COBRA premium assistance provided under the American Rescue Plan Act (ARPA). Specifically, the extension of certain timeframes did not provide additional time for individuals to elect ARPA extended coverage. However, individuals will still be able to access the extension of timeframes relief to pay for any COBRA coverage that they receive after the ARPA COBRA premium assistance ends.

The notice goes on to provide a number of examples of how this guidance applies. Employers should review this notice to understand the relief it provides to individuals who will elect COBRA through the end of the outbreak period.

Notice 2021-58 »

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CMS Issues FAQs Regarding COVID-19 Vaccine Premium Surcharges and Incentives

October 12, 2021

On October 4, 2021, the Departments of Health and Human Services, Treasury, and Labor (collectively, the departments) issued guidance in the form of FAQs clarifying HIPAA nondiscrimination rules applicable to certain vaccine-related wellness programs, as well as vaccine coverage. With the ongoing COVID-19 pandemic and the availability of vaccines, many employers are considering ways to incentivize their employees to get vaccinated. This recent guidance clarifies how HIPAA nondiscrimination rules impact wellness programs that offer vaccine-related premium surcharges and incentives. 

In Q3 of the FAQs, the departments confirm that a group health plan is permitted to offer participants a premium discount for receiving a COVID-19 vaccination if the design of the program complies with federal wellness program rules. This includes HIPAA wellness plan rules applicable to health-contingent, activity-only wellness programs, the Americans with Disabilities Act (ADA), and other rules such as the ACA’s employer mandate affordability rules.

The HIPAA nondiscrimination rules require, among other things, that the program is reasonably designed to promote health or prevent disease, additionally:

  • The reward (together with any other rewards for other health-contingent wellness programs) must not exceed 30% (or 50% for tobacco-related wellness programs) of the total cost of employee-only coverage.
  • A reasonable alternative standard be available to those who show that it is unreasonably difficult to comply due to a medical condition (or medically inadvisable to satisfy the otherwise applicable standard).
  • Disclosure of the reasonable alternative in all plan materials describing the wellness program.

Furthermore, HIPAA prohibits excluding COVID-19 treatment for unvaccinated participants, as doing so would constitute discrimination based on a health factor. Q4 of the FAQs clarifies that while there is an exception to the prohibition on discrimination based on a health factor for compliant wellness programs, such exception cannot be used to deny eligibility for benefits or coverage based on a health factor. The wellness plan exception applies only to premium discounts and similar cost-sharing modifications. 

Further, Q5 of the FAQs explains the impact of any premium discount or surcharge related to COVID-19 vaccination status on ACA employer mandate affordability calculations. The guidance provides that since COVID-19 vaccination is not tied to tobacco use, the employer must use the higher premium amount for affordability purposes. In other words, the employer must treat all employees as if they are not vaccinated when calculating whether the offered coverage is affordable under the employer mandate. 

Lastly, the guidance also confirms that plans and issuers must cover COVID-19 vaccines and their administration without cost-sharing once a vaccine is authorized under an emergency use authorization or approved under a Biologics License Application. 

Employers seeking to adopt a wellness program providing incentives or surcharges related to COVID-19 vaccination status should be mindful of this guidance and consult with employment law counsel to ensure they are compliant with all applicable laws. 

FAQs About Affordable Care Act Implementation Part 50, Health Insurance Portability and Accountability Act and Coronavirus Aid, Relief, and Economic Security Act Implementation »

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HHS OCR Issues FAQs Regarding HIPAA and COVID-19 Vaccinations in the Workplace

October 12, 2021

On September 30, 2021, the Department of Health and Human Services’ (HHS) Office for Civil Rights (OCR) released guidance clarifying how HIPAA applies to disclosures and requests for information regarding an individual’s COVID-19 vaccination status. 

The guidance reminds the public that HIPAA privacy provisions apply only to covered entities (e.g., health plans, certain health care providers, and health care clearinghouses) and business associates. These provisions determine when covered entities and business associates are permitted to use and disclose protected health information (PHI) that covered entities and business associates create, receive, maintain, or transmit.

As such, HIPAA does not prohibit employers from asking whether employees have received a COVID-19 vaccine. In addition, HIPAA does not prevent individuals from disclosing whether they have received a COVID-19 vaccine, as HIPAA does not apply to individuals’ disclosures about their own health information. The guidance further provides that HIPAA does not prohibit an employer from requiring employees to disclose COVID-19 vaccination status as HIPAA generally does not regulate what information can be requested from employees per terms of employment. Importantly, though, other federal and state laws may require certain privacy compliance measures (e.g., requiring documentation be kept confidential).

Finally, HIPAA generally prohibits covered entities and business associates from using or disclosing an individual’s PHI, except when an individual authorizes such disclosure (or otherwise permitted by HIPAA), which can include information about whether the individual has received a COVID-19 vaccine.

This guidance serves as a reminder to employers regarding the applicability of HIPAA to certain disclosures related to COVID-19 vaccination status. Employers should be mindful that although HIPAA rules often do not apply to certain disclosures, other federal and state laws may be applicable. 

FAQs »
Press Release »

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COVID-19-Related Benefits Compliance Resources Available

October 12, 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

Read More

COVID-19-Related Benefits Compliance Resources Available

September 28, 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

Read More

COVID-19-Related Benefits Compliance Resources Available

September 14, 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

Read More

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