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On March 4, 2022, the IRS released two fact sheets (FS) that updated two sets of FAQs on the FFCRA Paid Sick Leave Act ('EPSLA') and Emergency Family and Medical Leave Expansion Act ('Expanded FMLA'). One set of the FAQs focuses on the tax credits that are applied to leaves taken prior to April 1, 2021 (FS-2022-16), and the other describes the tax credit applied to leaves taken between April 1, 2021, to September 31, 2021 (FS 2022-15). The IRS also added four new FAQs to address when an employer claims the tax credits for qualified leave wages paid after December 31, 2021, for leave taken by an employee in 2020 and 2021 and whether the employer is required to furnish a Form W-2c (Corrected Wage and Tax Statement) correcting the amount of sick leave and family leave wages reported in Box 14 of the employee's 2020 and/or 2021 Form W-2 to the employee.

The FFCRA included provisions mandating employers with fewer than 500 employees to provide paid leave to employees who are unable to work or telework due to certain COVID-19-related reasons. To offset the financial burden to covered employers, the FFCRA provides for federal tax credits to fund the leave payments. Originally, the FFCRA required covered employers to provide paid leave under the EPSLA and the Expanded FMLA with respect to leave taken by eligible employees from April 1, 2020, through December 31, 2020. Subsequently, the COVID-related Tax Relief Act of 2020 extended the tax credit under the FFCRA through March 31, 2021, and then the American Rescue Plan Act of 2021 (ARPA) further extended the tax credit availability through September 31, 2021, for employers who chose to continue to provide FFCRA leaves on a voluntary basis.

Specifically, the new addition, Question 98a in FS-2022-15, explains that an employer that claims the tax credits for qualified leave wages paid after December 31, 2021, for leave taken by an employee from April 1, 2021, through September 30, 2021, must furnish the employee a Form W-2c to correct the amount of sick leave and family leave wages reported in Box 14 of the employee's 2021 Form W-2. Similarly, Question 54g in FS-2022-16 clarifies that an employer that claims the tax credits for qualified leave wages paid after December 31, 2021, for leave taken from April 1, 2020, through March 31, 2021, must either furnish the employee a Form W-2c or provide a corrected statement to correct the prior reporting.

For self-employed individuals who claimed the self-employed equivalent leave credit, Q65c (FS-2022-16) and Q116a (FS-2022-15) address whether they need to file an amended individual tax return if they receive a Form W-2c regarding corrected qualified leave wages from their employers.

Employers should be aware of these new clarifications and review the updated FAQs to determine if they need to issue a W-2c or corrected statement to the employee for the payment made after December 31, 2021.

IRS Fact Sheet. Tax Credits for Paid Leave under the ARPA 2021 for Leave After March 31, 2021 »
IRS Fact Sheet. Tax Credits for Paid Leave under the ARPA 2021 for Leave Prior to April 1, 2021 »

On March 15, 2022, President Biden signed the Consolidated Appropriations Act of 2022 (CAA 2022) into law. The law extends relief that allowed individuals to access and use telehealth services without losing their eligibility for HSAs. The CARES Act first provided this relief. Before the CARES Act, most services (such as telehealth services) that provided significant medical care before the HDHP statutory minimum deductible was met could render individuals ineligible for HSAs. The CARES Act created an exception for telehealth services, but applied it to telehealth services performed after January 1, 2020, with respect to plans years that began on or before December 31, 2021. The CAA 2022 re-established this relief for services provided after March 31, 2022 and before January 1, 2023.

For a calendar year HDHP, this extension leaves a gap in the first three months of 2022. Individuals who have access to telehealth services during that time will not be eligible to contribute to their HSAs (although they are potentially eligible for the other nine months of the year).

Employers should be aware of this extension. Plans that choose to adopt the relief should be revised to reflect these changes, and the changes should be communicated to employees through an SMM.

Consolidated Appropriations Act of 2022 »

On February 18, 2022, President Biden announced that the National Emergency Declaration that began on March 1, 2020 is extended to March 1, 2023. A National Emergency Declaration lasts for one year, unless extended. If the President had not extended the national emergency, then it would have expired on March 1, 2022.

This extension impacts COVID-19 extension relief for certain COBRA and HIPAA deadlines. 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.

This relief requires all group health plans, disability and other employee welfare benefit plans, and employee pension plans subject to ERISA or the Code to disregard an 'outbreak period' when calculating certain deadlines. The outbreak period began on March 1, 2020, and ends on the first anniversary of the date that relief is sought or 60 days after the end of the national emergency, whichever is earlier. The deadlines affected by this relief include:

• 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.

This relief was covered in the April 25, 2023, edition of Compliance Corner.

Although it is possible that the President will end the national emergency early, for now, the outbreak period will likely last until the first anniversary of the date relief was first sought or March 1, 2023, whichever is earlier.

Plan administrators should be aware of this extension.

Notice on the Continuation of the National Emergency Concerning the Coronavirus Disease 2019 (COVID-19) Pandemic »

On February 4, 2022, the Departments of Labor, Health and Human Services, and the Treasury (the 'departments') issued a new set of five FAQs that clarify a few points raised in original guidance concerning the coverage of over the counter (OTC) COVID-19 tests issued on January 10, 2022. Our article covering that original guidance can be found in the January 19, 2022, edition of Compliance Corner.

The first FAQ revises the 'safe harbor' established in the original guidance that allows plans or carriers to provide coverage of OTC COVID-19 tests purchased by covered employees and their dependents by arranging for direct coverage of OTC COVID-19 tests through both its pharmacy network and a direct-to-consumer shipping program. The safe harbor also allows plans and carriers that use it to limit reimbursement for OTC COVID-19 tests from non-preferred pharmacies or other retailers to no less than the actual price or $12 per test (whichever is lower). The first FAQ clarifies that whether a plan or issuer provides adequate access through its direct coverage program will depend on the facts and circumstances but will generally require that OTC COVID-19 tests are made available through at least one direct-to-consumer shipping mechanism and at least one in-person mechanism. When providing OTC COVID-19 tests through a direct-to-consumer shipping program, plans and carriers must cover reasonable shipping costs related to covered OTC COVID-19 tests in a manner consistent with other items or products provided by the plan or issuer via mail order. When providing coverage of OTC COVID-19 tests outside of a direct coverage program, the price of tests includes shipping and sales tax costs related to the purchase of OTC COVID-19 tests, so that plans and carriers must cover the total cost of the COVID-19 test (including shipping costs and sales tax) up to $12 per test.

The second FAQ states that the departments will not take enforcement action against a plan or carrier if they cannot meet the safe harbor requirements because of a supply shortage. Plans or carriers that otherwise meet the requirements of the safe harbor may continue to limit reimbursement to $12 per test (or the full cost of the test, whichever is lower) for OTC COVID-19 tests purchased outside of the direct coverage program.

The third FAQ describes steps that plans and carriers may take to address fraud, waste and abuse related to the coverage of OTC tests. Plans or carriers may establish a policy that limits coverage of OTC COVID-19 tests purchased without the involvement of a healthcare provider to tests purchased from established retailers that would typically be expected to sell OTC COVID-19 tests. Accordingly, plans or carriers may deny reimbursement for tests purchased from a private individual (either in-person or online) or online resellers. If plans or carriers adopt such a policy, then it could include requiring reasonable documentation showing that a covered employee or their dependent purchased the OTC from an established retailer. Plans or carriers that implement such a policy should provide information to covered employees and their dependents regarding acceptable retailers.

The fourth FAQ clarifies that the COVID-19 tests that plans or carriers must cover do not include tests that require processing by a laboratory or healthcare provider (unless a healthcare provider orders those tests). OTC tests subject to this FAQ and the guidance from January 19, 2022, must be authorized and approved by the FDA to be self-administered and self-read (i.e., the covered employee or their dependents obtain the results of the test directly).

Finally, the fifth FAQ notes that the cost of OTC COVID-19 tests is reimbursable by healthcare FSAs, and HRAs; however, since plans or carriers are obligated to pay this cost, participants in those arrangements cannot also seek reimbursement for it. An individual cannot be reimbursed more than once for the same medical expense. Similarly, a covered employee cannot pay the cost for these tests out of their HSA because this would be an expense already covered by insurance or a group health benefit plan. The departments encourage plans and carriers to advise covered employees and their dependents not to seek reimbursement for this expense from their FSA or HRA.

Employers should be aware of these new FAQs, whether they self-insure or sponsor fully insured plans.

FAQS about Families First Coronavirus Response Act and Coronavirus Aid, Relief and Economic Security Act Implementation Part 52 »

On January 12, 2022, HHS Secretary Xavier Becerra extended the COVID-19 public health emergency, continuing the declaration for another 90 days. This was the eighth extension since the public health emergency was first ordered back in January 2020.

The extension enables certain financial aid programs and public health flexibilities, including expansions of telehealth capabilities, to continue for at least three months. It also allows states and counties to waive certain requirements if they have issued their own emergencies.

Additionally, the declaration determines the period during which group health plans and insurers must pay for COVID-19 tests and related services, and cover vaccines as a preventive benefit (even if provided out-of-network).

Renewal of Determination That a Public Health Emergency Exists (hhs.gov) »

On January 25, 2021, the Occupational Safety and Health Administration (OSHA) withdrew its Emergency Temporary Standard (ETS) vaccine mandate for employers who employ 100 or more workers. This withdrawal is in response to a recent Supreme Court decision to impose a stay on enforcement of the standard pending the resolution of a court challenge. More information about the Court's decision can be found in the December 5, 2023, edition of Compliance Corner. Accordingly, OSHA will not enforce the ETS, although it encourages workers to get vaccinated.

The ETS also served as a proposed rule for a permanent occupational safety and health standard. The agency stated that it continues to serve that function, just without an enforceable emergency temporary standard. This means that the proposed rule is currently making its way through the administrative process and may re-emerge as a final rule later.

Interim Final Rule Withdrawal »

On January 10, 2022, the DOL, HHS and the Treasury Department (the 'departments') issued guidance in the form of FAQs regarding new COVID-19 test requirements. Starting January 15, 2022, and effective until the end of the public health emergency, the guidance states that health insurance carriers and group health plans (including self-insured plans) must pay for over-the-counter (OTC) COVID-19 tests without cost-sharing, prior authorization or other medical management requirements. The departments produced this guidance under orders from the Biden administration. Under the FFCRA and the CARES Act, this guidance adds to the existing requirement that carriers and plans must pay for COVID-19 tests that a healthcare provider provides to participants, beneficiaries or enrollees (i.e., employees and their dependents covered by the employer's group health plan).

COVID-19 Test Coverage Requirement
Six FAQs address the new COVID-19 test coverage requirement. At a high level, the FAQs state:

• Coverage may (but is not required to) apply to tests purchased prior to January 15, 2022.
• The plan can provide the coverage by reimbursing sellers of OTC COVID-19 tests directly (referred to as direct coverage) or by requiring covered employees and their dependents who purchase an OTC COVID-19 test to submit a claim for reimbursement to the plan. The departments strongly encourage but do not require direct coverage.
• The requirement only applies to 'diagnostic' OTC COVID-19 tests, such as PCR and antigen tests, in contrast to those not primarily intended for individualized diagnosis or treatment of COVID-19. That includes any FDA-approved at-home test, whether ordered in person or online.
• Plans and carriers may limit the number of tests reimbursed to no less than eight OTC COVID-19 tests per covered individual per 30-day period (or per calendar month) if purchased without the involvement of a healthcare provider. There is no limit on the number of tests, including OTC COVID-19 tests, which plans and carriers must cover if a healthcare provider orders or administers them following an individualized clinical assessment.
• Plans and carriers must accept all reimbursement claims submitted with valid receipts and must not unduly delay reimbursement.
• The departments encourage plans and carriers to develop a network of convenient locations (e.g., pharmacies, stores, online retailers, etc.) for covered employees and their dependents - at the direct point of sale - to obtain tests with no upfront cost. If the plan or carrier has set up a network of preferred retailers, covered employees and their dependents who purchase a test outside that network are still entitled to reimbursement from the plan or carrier of up to $12 per individual test if they submit a valid receipt.
• This requirement applies only to OTC COVID-19 tests purchased or obtained by employees covered by the employer's group health plan and their dependents.

Each FAQ provides additional detail, as set forth below.

FAQ#1 asserts that the FFCRA provides the authority for this requirement. The FFCRA requires plans and carriers to cover the cost of COVID-19 tests without imposing any cost-sharing requirements, prior authorization or other medical management requirements. The FFCRA does not require plans and carriers to pay the sellers of these tests directly; rather, requiring covered employees and their dependents to pay for the tests and then submit a request for reimbursement is also acceptable. In any event, the requirement is no longer limited to tests provided because of an order from a healthcare provider '” covered employees and their dependents can obtain a test on their own for any reason. This new guidance does not amend previous guidance stating that plans and carriers are not required to pay for tests that employees must take for employment purposes.

FAQ#2 creates a safe harbor for plans and carriers to satisfy this requirement. Under this safe harbor, a plan or carrier can provide coverage of OTC COVID-19 tests purchased by covered employees and their dependents by arranging for direct coverage of OTC COVID-19 tests through both its pharmacy network and a direct-to-consumer shipping program. The safe harbor allows plans and carriers that use it to limit reimbursement for OTC COVID-19 tests from non-preferred pharmacies or other retailers to no less than the actual price or $12 per test (whichever is lower). To use this safe harbor, the plan or issuer must take reasonable steps to ensure that covered employees and their dependents have adequate access to OTC COVID-19 tests through an adequate number of retail locations (including both in-person and online locations). A plan or issuer that is unable to meet the requirements of this safe harbor cannot deny coverage or impose cost-sharing (including setting limits on the amount of reimbursement for OTC COVID-19 tests) with respect to any OTC COVID-19 tests obtained by covered employees and their dependents, including those purchased from non-preferred sellers. Note that this safe harbor applies only to the requirement to provide coverage of OTC COVID-19 tests. Plans and carriers must continue to provide coverage for COVID-19 tests that a healthcare provider administers either directly or through a prescription, even when relying on this safe harbor.

FAQ#3 creates another safe harbor under which plans and carriers may set limits on the number of tests that a person can obtain because of this requirement. The departments will not act against a plan or issuer that limits the number of tests covered for each covered employee or their dependents to no less than eight tests per 30-day period (or per calendar month). It is important to note that the eight test per month limit applies to each covered employee and dependent (for example, an employee covering a spouse and two children could get 32 tests per month). In addition, the limit applies to each individual test, regardless of how the tests are packaged (e.g., two tests are often packaged in one box). While plans and carriers can apply an eight-test monthly limit, they must not limit covered employees and their dependents to a smaller number of these tests over a shorter period (for example, limiting individuals to four tests per 15-day period). However, they may set limits that are more generous. This safe harbor does not apply either to tests that a healthcare provider administers directly or through a prescription.

FAQ#4 allows plans and carriers to take reasonable steps to prevent, detect and address fraud and abuse when satisfying this requirement. Acceptable steps to take include an attestation requirement, such as a signature on a brief attestation document, that states the participant or their dependents purchased the OTC COVID-19 test for personal use, not for employment purposes; has not been (and will not be) reimbursed by another source; and is not for resale. In addition, plans and carriers can require covered employees and their dependents to provide reasonable documentation of proof of purchase with a claim for reimbursement for the cost of an OTC COVID-19 test. The guidance cautions that fraud and abuse programs are unreasonable if they require an individual to submit multiple documents or involve numerous steps that unduly delay access to or reimbursement for OTC COVID-19 tests by covered employees or their dependents.

FAQ#5 allows plans and carriers to provide education and information resources to support consumers seeking OTC COVID-19 testing if such resources clarify that the plan or carrier provides coverage for, including reimbursement of, all OTC COVID-19 tests. Such information includes guidance to help people access and effectively use OTC COVID-19 tests, and information to explain the differences between OTC COVID-19 tests and tests performed or ordered by a healthcare provider and/or processed in a laboratory. Plans and carriers can also provide information concerning the quality and reliability of various tests, including shelf life and expiration dates. Plans and carriers can also provide information to participants and their dependents about obtaining tests and obtaining reimbursement for tests they pay for out-of-pocket.

FAQ#6 establishes the requirement's effective date as January 15, 2022. Plans and carriers may amend the terms of a plan or coverage as necessary to comply with these updates related to coverage of OTC COVID-19 tests without regard to otherwise applicable restrictions on mid-year changes to health insurance coverage.

Other ACA Requirements
The ACA requires plans and carriers to cover certain items or services without cost-sharing, including evidence-based items or services that have in effect a rating of 'A' or 'B' in the current recommendations of the United States Preventive Services Task Force (USPSTF). The next two FAQs in this guidance clarify certain services that are subject to this requirement.

FAQ#7 states that a plan or issuer must cover colonoscopies conducted after a positive non-invasive stool-based screening test or direct visualization screening test for colorectal cancer for individuals described in the USPSTF recommendation, without cost-sharing.

FAQ#8 states that plans and carriers must provide coverage for a follow-up colonoscopy after a positive non-invasive stool-based screening test or direct visualization test based on the new USPSTF recommendation, without cost-sharing, for plan or policy years beginning on or after May 31, 2022.

FAQ#9 states that the departments are actively investigating complaints that plans, carriers and pharmacy benefit managers are denying contraceptive coverage to participants, beneficiaries or enrollees in violation of the ACA.

Employer Takeaway
Employers should review this guidance and work closely with their carrier or TPA to develop a strategy and process to ensure compliance with the COVID-19 test coverage requirements and communicate with employees and the other guidance concerning the ACA. Further, employers should discuss with their carrier or TPA whether to set up direct coverage through a preferred pharmacy or retailer or require covered employees and their dependents to pay the cost upfront and reimburse it later.

DOL FAQs About Affordable Care Act Implementation Part 51, Families First Coronavirus Response Act and Coronavirus Aid, Relief and Economic Security Act Implementation »
HHS Press Release »
CMS FAQ How to Get Your At-Home Over-The-Counter COVID-19 Test for Free »

On January 13, 2021, the US Supreme Court granted a stay of enforcement on the Occupational Safety and Health Administration (OSHA) Emergency Temporary Standard (ETS) vaccine mandate for employers who employ 100 or more workers. The Court did not decide on the merits of the case challenging the mandate; rather, it concluded that the parties challenging the mandate would likely succeed on the merits of the case, so a stay was appropriate. Accordingly, the government cannot enforce this mandate until the resolution of the pending litigation challenging it, which is currently in the US Court of Appeals for the Sixth Circuit. You can find more information on the ETS in the January 4, 2021, Compliance Corner article. The stay applies to the employer vaccine mandate, meaning employers do not have to comply with the OSHA ETS, at least for now.

Separately, the Supreme Court did not grant another request to stay a vaccine mandate relating to healthcare workers who work for entities that receive funds from Medicare or Medicaid. As a result, that mandate is now in effect. Employers that are healthcare providers should review their obligations under this mandate. See this January 4, 2022, Compliance Corner article for more information.

For employers with 100 or more workers, the OSHA ETS litigation could take some time, and it is possible that the Supreme Court will strike down the mandate if a party to the lawsuit appeals the ultimate decision of the Sixth Circuit. However, this stay does not prohibit employers from implementing their own vaccine mandate or testing policies, subject to reasonable accommodation requirements under the Americans with Disabilities Act and state law. Employers should consult with employment law counsel if they are considering their own vaccine and testing policies.

Sources

Supremecourt.gov, Large Employer OSHA ETS (PDF)

Supremecourt.gov, Healthcare Worker Vaccination Requirement (PDF)

On December 22, 2021, the Supreme Court announced that it will hear oral arguments regarding the CMS vaccine mandate for healthcare workers and the Occupational Safety and Health Administration (OSHA) Emergency Temporary Standard (ETS) mandate for employers who employ 100 or more workers.

CMS issued an interim final rule on November 5, 2021, requiring the staff of twenty-one types of Medicare and Medicaid healthcare providers to receive one vaccine by December 6, 2021, and to receive the second vaccine by January 4, 2022. More information on the specifics of this mandate can be found here. The interim final rule was immediately challenged in the courts, and it is currently subject to preliminary injunctions in 25 states. The agency asked the Supreme Court to take up the matter and, in the meantime, will enforce its mandate only in those states where no injunction applies. Note that there are new deadlines for complying with the CMS mandate: the first vaccine dose must be administered by January 27, 2022, and the second dose by February 28, 2022. More information on this decision (including a list of the states where the mandate does not currently apply) can be found here.

The OSHA ETS (imposed on employers with 100 or more employees) is currently in effect, as discussed in the December 21, 2021 article in Compliance Corner. As noted in that article, the agency announced that it would not issue citations for noncompliance with any requirements under the ETS until January 9, 2022. It will not issue citations for noncompliance with the standard's testing requirements before February 9, 2022. The plaintiffs challenging this mandate appealed the most recent US Court of Appeals for the Sixth Circuit decision to the Supreme Court.

These mandates are expected to remain in force (subject to the parameters established by the respective agencies) until the Supreme Court issues a ruling. We will continue to provide updates as the cases develop.