Section 9501 of the American Rescue Plan Act, 2021 (“ARPA”) provides for a complete COBRA premium subsidy for all Assistance Eligible Individuals beginning on April 1, 2021, and ending on September 30, 2021. This article discusses who qualifies as an Assistance Eligible Individual, the impact of the relief on such individuals, the impact of the relief on the COBRA maximum coverage period, the additional requirements imposed on employers in connection with the relief, and how employers may receive reimbursements for the subsidy from the federal government.

Continue Reading Special Mandatory COBRA Subsidy in 2021 for Involuntarily Terminated Employees

As we discussed in our previous blog post, Temporary Relief Allows Flexible Spending Arrangements to be More Flexible, Section 214 of the Consolidated Appropriations Act, 2021, Pub. L. 116-260 (the “Act”), allows employers to offer an extended use-it-or-lose-it and/or extended spend-down periods during which participants in a health flexible spending arrangement (“ health FSA”) may have access to unused health FSA amounts until the end of the subsequent plan year and/or after they terminate participation in the health FSA mid-year, respectively. In certain cases, access to unused health FSA amounts can make an individual ineligible to contribute to a health savings account (an “HSA”).

Continue Reading Preserving HSA Eligibility With An Extended Health FSA Use-It-Or-Lose-It Period

Section 214 of the Consolidated Appropriations Act, 2021, Pub. L. 116-260 (the “Act”), allows sponsors of health and dependent care flexible spending arrangements (“FSAs”) to delay forfeitures of unused account balances for 2020 and 2021 plan years and grant participants, including former participants, more time to spend down account balances. Section 214 and implementing guidance also give employers another opportunity to allow participants to change their elections with respect to FSAs and health plans. On February 18, 2021, the Internal Revenue Service (“IRS”) issued IRS Notice 2021-15 to help explain and expand the parameters of this relief.

Continue Reading Temporary Relief Allows Flexible Spending Arrangements to be More Flexible

On January 12, 2021, the Employee Benefits Security Administration (“EBSA”) of the Department of Labor (“DOL”) announced new guidance on a range of issues related to missing participants:

  • In Missing Participants – Best Practices for Pension Plans, EBSA has provided examples of best practices that it has identified as being effective at minimizing and mitigating the problem of missing or nonresponsive participants.
  • This new guidance also includes Compliance Assistance Release No. 2021-01, which provides a roadmap of investigative processes and case-closing practices of EBSA investigators who conduct Terminated Vested Participants Project (“TVPP”) audits of defined benefit pension plans. One purpose of these audits is to assess whether defined benefit plans have taken appropriate steps to locate missing participants and beneficiaries.
  • EBSA also issued Field Assistance Bulletin No. 2021-01, which announced the DOL’s temporary enforcement policy on a terminated defined contribution plans’ use of the Pension Benefit Guaranty Corporation’s expanded missing participants program.

This article focuses on the guidance for ongoing plans (and not Field Assistance Bulletin 2021-01 for terminated plans).

Continue Reading Five New Ways That Plan Fiduciaries May Locate Missing Participants

Effective January 1, 2021, California employers will be required under Assembly Bill (AB) 685 to provide detailed notices to employees when there is a COVID-19 case in the workplace and to notify local public health departments of COVID-19 “outbreaks” in the workplace.  California employers should begin assessing their practices now to ensure that they will be ready to comply with AB 685 come January 1.

Below is a summary of the key requirements under AB 685 and recent California Department of Public Health (CDPH) guidance on AB 685, including FAQs and definitions.

Continue Reading California’s AB 685 Expands Employers’ COVID-19 Notification Requirements, Effective January 1

On November 30, 2020, emergency temporary COVID-19 workplace standards (“ETS”) issued by the California Division of Occupational Safety and Health (“Cal/OSHA”) took effect.  The ETS, which requires stringent workplace protocols intended to curb the spread of COVID-19, applies to all California employers, other than those subject to the Cal/OSHA Aerosol Transmissible Disease standard or those with only one employee at the workplace who does not have contact with others.  Under the ETS, employers must adopt and implement a comprehensive COVID-19 prevention program that includes identification and correction of COVID-19 risks, employee screening, investigation of cases, use of face coverings and other protective equipment, exclusion of exposed employees, and provision of free COVID-19 testing in certain circumstances, among other requirements.  The ETS also mandates testing and other action when there are multiple infections or an “outbreak” in a workplace.

Cal/OSHA promptly published a “Frequently Asked Questions” document (“FAQs”), a one-page summary of the ETS, and a Model Prevention Plan.  These documents shed additional light on the ETS and how it might be enforced.

Below is an overview of the key takeaways from the new ETS and subsequent Cal/OSHA publications.

Continue Reading California Employers Must Comply with New Cal/OSHA COVID-19 Workplace Safety Standards

On October 29, 2020, the Department of Health and Human Services, the Department of Labor and the Department of the Treasury released the final “Transparency in Coverage” rule. The rule requires most group health plans and issuers to provide individualized cost-sharing information to participants, beneficiaries and enrollees upon request, and to publicly disclose in-network provider negotiated rates, historical out-of-network allowed amounts and drug pricing information. The final rule also amends the medical loss ratio (MLR) rules to allow issuers to receive credit in the calculations for savings they share with enrollees utilizing lower-cost, higher value providers.

The final regulations are similar to the proposed regulations issued on November 15, 2019 (described in this previous blog post). While the proposed rule had included a request for information regarding how providing quality measurements and reporting could be used to complement cost-sharing information, the final rules do not address health care quality and continue to focus on price transparency.

Continue Reading Final Rules Require Health Plans to Publicly Disclose Reimbursement Rates

Employers that have employees residing in California are now required by AB 1554 to provide notification in two different forms to employees about deadlines for withdrawing funds from flexible spending accounts (“FSAs”).  One of the forms of notification may be electronic.  Examples of permissible notification forms include: e-mail, telephone, text message, mail, or in-person.  The notice requirement purports to apply to all FSAs, including dependent care FSAs, health care FSAs, and adoption assistance FSAs.  Virtually all other aspects of implementing the law are left open to interpretation.

Continue Reading California’s New FSA Notice Requirement Leaves Employers Asking Questions

On Saturday 31 October, the UK Government announced a new national lockdown and confirmed the extension of the existing Coronavirus Job Retention Scheme, more commonly referred to as the “furlough” scheme.

In this alert, we set out what the UK Government has announced and what this means in terms of the support available to employers, including the status of the Job Support Scheme (the “JSS”), which was originally due to replace the furlough scheme from yesterday.

Continue Reading Extension of the UK Coronavirus Job Retention Scheme

The IRS recently published new guidance on the tax withholding and reporting consequences associated with qualified retirement plan distributions to state unclaimed property funds.  In Revenue Ruling 2020-24, the IRS clarified that distributions from qualified retirement plans to state unclaimed property funds are subject to both federal income tax withholding and 1099-R reporting requirements.  In a companion revenue procedure, Rev. Proc. 2020-46, the IRS permitted taxpayers to self-certify for a waiver of the 60-day deadline for rolling over funds between qualified plans when the funds had been distributed to a state unclaimed property fund.

Continue Reading IRS Updates Guidance on Qualified Plan Distributions to State Unclaimed Property Funds