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On April 7, 2021, the U.S. Department of Labor (DOL) issued eagerly anticipated guidance on administering COBRA subsidies under the American Rescue Plan Act of 2021 (ARPA). The guidance includes Frequently Asked Questions (FAQs) and various Model Notices and election forms implementing the COBRA Premium Assistance provisions under ARPA, while also announcing the launch of a page dedicated to COBRA Premium Subsidy guidance on its website.

Since ARPA was enacted, employers have been preparing to comply, albeit with many open questions.  ARPA requires that full COBRA premiums be subsidized for “Assistance Eligible Individuals” for periods of coverage between April 1, 2021, through September 30, 2021.  While this guidance answers important questions on the administration of the subsidies, it does not address many other details on the minds of employers.  For example, this guidance does not cover important nuances such as what is an “involuntary termination” in order to qualify for subsidized coverage, how existing separation agreement commitments to subsidize COBRA should be viewed, or details on how the corresponding payroll tax credit will work.

The FAQs are largely directed to individuals and focus on how to obtain the subsidy and how subsidized coverage fits with other types of health coverage that may be available, including Marketplace, Medicaid, and individual plan coverage.   We hope that employer directed guidance will follow to fill in the gaps.

Employers will be happy to know that the FAQs confirm a few points that will impact administration.  First, eligibility for coverage under another group health plan, including that of a spouse’s employer, will disqualify the employee from the subsidy.  Employees must certify on election forms that they are not eligible for such coverage and will notify the employer if they subsequently become eligible for coverage (individual coverage, such as through the Marketplace or Medicaid, will not disqualify an otherwise eligible individual from subsidized COBRA).  Failure to do so will subject the individual to a tax penalty of $250, or if the failure is fraudulent, the greater of $250 or 110% of the premium subsidy.  The availability of other coverage (which the employer may not know about) does not impact the employer’s initial obligation to identify potential Assistance Eligible Individuals and provide the required notices and election forms.

Soon after enactment, there were also questions circling about whether ARPA applied to small employer plans not subject to COBRA, but rather state “mini-COBRA” laws.  The FAQs confirm that the subsidy also applies to any continuation coverage required under state mini-COBRA laws but also notes that ARPA does not change time periods for elections under State law.  Further guidance would be welcome on obligations related to small insured plans.  The FAQs also confirm that plans sponsored by State or local governments subject to similar continuation requirements under the Public Health Service Act are covered by the ARPA subsidies.

One area that has caused great confusion is how the right to retroactively elect COBRA coverage (to the date active coverage was lost) due to the DOL’s extended deadlines fits with this new election right.  While there is more to come on this, the DOL helpfully confirmed that these are two separate rights and thankfully, the FAQs note that the extended deadlines do not apply to the 60-day notice or election periods related to the ARPA subsidies.

The most significant part of the guidance (that we knew was coming but are still happy to see sooner rather than later) are the Model Notices and election materials.  The guidance package confirms that employers have until May 31, 2021, to provide the notices of the opportunity to elect subsidized coverage and individuals have 60 days following the date that notice is provided to elect subsidized coverage.  Individuals can begin subsidized coverage on the date of their election, or April 1, 2021, as long as the involuntary termination or reduction in hours supporting the election right occurred before April 1, 2021.  As previously noted, in no way do these timeframes extend the otherwise applicable 18-month COBRA period.

The Notices include an ARPA General Notice and COBRA Continuation Coverage Election Notice, to be provided to all individuals who will lose coverage due to any COBRA qualifying event between April 1 and September 30, 2021, and a separate Model COBRA Continuation Coverage Notice in Connection with Extended Election Periods, to be provided to anyone who may be eligible for the subsidy due to involuntary termination or reduction in hours occurring before April 1, 2021 (i.e., generally involuntary terminations or reductions in hours occurring on or after October 1, 2019).

Plans will also have to provide individuals with a Notice of Expiration of Period of Premium Assistance 15-45 days before the expiration of the subsidy — essentially explaining that subsidies will soon expire, the ability to continue unsubsidized COBRA for any period remaining under the original 18-month coverage period and describing the coverage opportunities available through other avenues such as the Marketplace or Medicaid.  Employers are highly encouraged to use the DOL’s model notices without customization except where required to insert plan or employer specific information.

With the release of the model notices, employers and COBRA administrators now largely have the tools to administer this new election right.  The FAQs remind us that the DOL will ensure ARPA benefits are received by eligible individuals and employers will face an excise tax for failing to comply, which can be as much as $100 per qualified beneficiary (no more than $200 per family) for each day the employer is in violation for the COBRA rules.  Accordingly, employers will want to begin or continue conversations with COBRA administrators to ensure notices are timely provided to the right group of individuals.  

DOL Issues Guidance on Outbreak Period Extensions

March 01 - Posted at 1:41 PM Tagged: , , , , , , , , ,

The COVID-19 extensions that the DOL and IRS had issued last year as part of their “Joint Notice” were set to expire at midnight on February 28th.  For weeks, many have been asking the DOL and IRS for guidance on how to handle the statutorily-mandated expiration, and as a result of the lack of guidance, most plans, TPAs, insurers, and COBRA administrators had to make a judgment call as to how to proceed.

But – with 2 days to spare – DOL finally issued Disaster Relief Notice 2021-01  on February 26th.

Notice 2021-01 sets forth the DOL and IRS’ position that the COVID-19 extensions will continue past February 28th, and that all such extensions must be measured on a person-by-person basis – which was not clear from the prior guidance.  Plans, TPAs, insurers, and COBRA administrators may have to reconsider their administrative practices in light of this new direction.

Short Background

The original Joint Notice (85 Fed. Reg. 26351 (May 4, 2020) required that health and retirement plans toll a number of deadlines for individuals during the COVID-19 National Emergency, plus a 60-day period (the “Outbreak Period”) starting March 1, 2020.

But, as described in Footnote 4 of the Joint Notice, ERISA and the Code limit DOL and Treasury’s ability to toll deadlines to one year (“Tolling Period”).

The deadlines impacted in the Joint Notice are:

  • Deadline to elect COBRA;
  • Deadline to pay COBRA premiums;
  • Deadline to elect HIPAA special enrollment;
  • Deadlines to file claims, appeals, and requests for external review; and
  • Deadline for plan to provide COBRA election notice


When there has been disaster relief guidance in the past, these periods have not bumped up against the statutorily-imposed one-year limit, so this COVID-19 extension is new territory – hence all the requests for the agencies to issue guidance regarding the expiration date.

Disaster Relief Notice 2021-01

In this late-breaking Notice 2021-01, DOL says it coordinated with HHS and IRS, and the agencies are interpreting the Tolling Period to be read on a person-by-person basis.

Specifically, DOL says that the Tolling Period ends the earlier of:

  1. One year from the date the deadline would have begun running for that individual; or
  2. 60 days from the end of the National Emergency (which is still ongoing).

This means that each individual has his or her own Tolling Period!

For example, a COBRA Qualified Beneficiary (QB) has 60 days to elect COBRA, counted from the later of their loss of coverage or the date their COBRA election notice is provided.  Under the Joint Notice, a QB’s 60-day deadline was tolled as of March 1, 2020, until the end of the Outbreak Period (that is, until the end of the National Emergency + 60 days).

At the end of the Outbreak Period, the deadlines would start running again, and the QB would have their normal 60-day COBRA election period (or the balance of their election period if it started before March 1, 2020).

BUT – with the 1-year expiration, DOL’s new Notice 2021-01 says that the one-year period does not end on February 28, 2021 for all individuals, but rather each individual has his/her own one-year Tolling Period.

Examples:

  • If QB A’s election period started 2/1/20, her election deadline was tolled as of 3/1/20. Her one-year Tolling Period would end 2/28/21, so her election period would start 3/1/21, and she would have the balance of her 60-day election period.
  • If QB B’s election period started 3/1/20, her election deadline was tolled as of 3/1/20. Her one-year Tolling Period would end 2/28/21, so her 60-day election period would start 3/1/21.
  • If QB C’s election period started 6/1/20, her election deadline was tolled right away, as of 6/1/20. Her one-year Outbreak Period would end 5/31/21, so her 60-day Tolling period would start 6/1/21.
  • If QB D’s election period starts 4/1/21, her election deadline also will be tolled right away on 4/1/21, as long as we are still in the National Emergency. Her one-year Tolling Period would end 3/31/22, so her 60-day election period would start 4/1/22.

For all of these examples, the tolling would end earlier if the National Emergency ends.  In that case, the election period would end 60 days after the end of the National Emergency.

Reasonable Accommodation Requirement

Notice 2021-01 also says that DOL recognizes that enrollees may continue to encounter COVID issues, even after the one-year Tolling Period expiration.  DOL says that the “guiding principle” is for plans to act reasonably, prudently, and in the interest of the workers and their families.  DOL says that plan fiduciaries should make “reasonable accommodations to prevent the loss of or undue delay in payment of benefits . . . and should take steps to minimize the possibility of individuals losing benefits because of a failure to comply with pre-established time frames.”

Notice 2021-01 does not provide any direction regarding what would constitute a “reasonable accommodation.”  It sounds like plans may need a process to consider whether to continue to waive deadlines on a case-by-case basis, but without any guidance as to what parameters to apply.  And DOL suggests that failure to do so could be a fiduciary issue.


Notices

Regarding communicating these changes to enrollees, DOL says:

  • The plan administrator or fiduciary “should consider” affirmatively sending a notice regarding the end of the one-year relief period (presumably to each person based on her own customized extension period).
  • Plans “may need” to reissue or amend prior disclosures if they failed to provide accurate information regarding these new extension deadlines.
  • Plans “should consider” making enrollees aware of other coverage options, such as the Special Enrollment Period under the Health Insurance Marketplace.

DOL seems to be saying that plans may need to notify each individual when his or her one-year extension is about to be up and should include information about the Health Insurance Marketplace.  In addition, plans may need to update prior communications that did not anticipate this new DOL interpretation.

Enforcement

DOL says it acknowledges that there may be instances when plans or service providers themselves may not be able to fully and timely comply with pre-established timeframes and disclosure requirements.  DOL says that where fiduciaries have acted in “good faith and with reasonable diligence under the circumstances,” DOL’s approach to enforcement will be “marked by an emphasis on compliance assistance,” including grace periods or other relief.

DOL Revises COVID-19 Leave Regulations

September 14 - Posted at 1:37 PM Tagged: , , , , , , , , , , , ,

Employers of healthcare providers will soon be required to provide paid sick leave and partially paid family leave to a broader category of employees, and all employers subject to the law now have clarification on a number of other obligations, thanks to a revised set of regulations released by the Labor Department late Friday afternoon. After a federal court judge recently knocked down the agency’s first attempt to provide employers with practical direction in complying with the Families First Coronavirus Act (FFCRA), the Labor Department issued a second set of rules on September 11 that in some instances revise and in other instances clarify employer compliance duties. Here are the key changes and clarifications, which are slated to go into effect on September 16, that employers need to know about:

  1. The definition of workers deemed “health care providers” – whose employers may exclude them from coverage under the law – was narrowed to only include employees who are health care providers under the Family Medical Leave Act (FMLA) and those providing diagnostic services, preventive services, treatment services, or other services that are integrated with and necessary to the provision of patient care.
  2. The agency reaffirmed that leave can only be taken only if the employee has work available from which to take leave.
  3. Employees must still obtain their employer’s approval to take leave on an intermittent basis.
  4. Employees must give their employer information to support their need for leave as soon as practicable.
  5. The Labor Department revised the rules to correct an inconsistency regarding when an employee may be required to give notice of family and medical leave to their employer.
(more…)

How To Balance School Re-Openings And COVID-19 Workplace Leave: FAQs For Employers

August 28 - Posted at 11:00 AM Tagged: , , , , , , , , , ,

As the summer draws to a close, schools are announcing their re-opening plans, which vary widely across states and localities. Some schools plan to remain open several days a week and direct students to attend remotely the other days. Others will split classes into morning and afternoon sessions, allowing students attending in the morning to participate remotely at home for the rest of day and vice versa. Still others will require physical attendance at all times, while some will choose to operate entirely under a remote learning model.

In light of these different reopening plans, employers need to understand how the Families First Coronavirus Response Act (FFCRA) affects the leave rights of employees for each of these different types of school schedules. The below serves as a list of answers to frequently asked questions related to the issues you could face as schools begin to reopen.  

The Basics: FFCRA Leave Benefits For Working Parents

Under the FFCRA, eligible employees are entitled to Emergency Paid Sick Leave (EPSL) and/or expanded family and medical leave (EFML) if they are unable to work or telework because they need to care for their son or daughter if (a) the child’s school or place of care is closed, or (b) the child care provider is unavailable, due to COVID-19-related reasons. The FFCRA regulations provide that an employee may take leave to care for their child only when the employee needs to, and actually is, caring for the child. The Department of Labor (DOL) has advised that “generally, an employee does not need to take such leave if another suitable individual — such as a co-parent, co-guardian, or the usual child care provider — is available to provide the care the employee’s child needs.”

Frequently Asked Questions

1. Is a child’s school or place of care deemed “closed” for purposes of the FFCRA if it has moved to online instruction or to another model in which children are required to complete assignments at home?
Yes. If the physical location where an employee’s child received instruction or care is closed, the school or place of care is deemed “closed” for purposes of the EPSL and EFML. The DOL has instructed that this is true even if some or all instruction is being provided online or whether, through another format such as “distance learning,” the child is still expected or required to complete assignments. But this seemingly does not contemplate a hybrid model (discussed below) and likely pertains only to those circumstances where the child is not reporting to a physical location. Also note that in order to be eligible for FFCRA leave, employees must still certify that there is no other suitable person that can care for the child.

2. Is an employee entitled to FFCRA leave if they choose to keep the child at home or have the child homeschooled even though the child’s school is open?
No. The DOL has stated that employees do not need to take leave if their usual child care provider is available to provide care. But if the school is operating on a reduced capacity due to COVID-19, which then necessitates remote learning for the child, FFCRA leave could be available. See DOL guidance on summer camps

3. Would an employee qualify for FFCRA leave if their child’s school is open but the employee chooses remote learning based on a doctor’s recommendation due to the child’s vulnerability to COVID-19?
EFMLA is likely not available to the employee because the child’s school is not closed. The employee might be eligible for EPSL if they can demonstrate that they are taking leave to care for a person who has been advised by a health care provider to self-quarantine due to concerns related to COVID-19 (permitted reason #4 under EPSL). It is unclear however, whether a recommendation for remote learning is the same as a recommended self-quarantine for purposes of the FFCRA.

4. Will employees be eligible for FFCRA leave if a child’s school is operating on a hybrid model (whereby children are to alternate between physical attendance and remote learning)?
Likely yes. While this scenario is not specifically addressed in the statute or DOL guidance, one would argue that the child’s school is technically “closed” to that child on the days when the child is required to participate via remote learning. Thus, if the employee cannot work or telework during those days, they should qualify for FFCRA leave.

It is uncertain, however, whether a parent may take the leave consecutively or intermittently to coincide with the days and times the child is home remote learning. If the child’s school requires them to attend school daily (e.g., child attends school half of the day and spends the other half remote learning), leave is likely to be taken consecutively. If, on the other hand, the child’s schedule requires the child to physically attend school only on certain days of the week, leave is likely to be taken intermittently. Note that while the DOL regulations mandate employer consent for intermittent leave, a New York federal court recently struck out this requirement as unreasonable.

5. Would an employee qualify for FFCRA leave if the child’s school is open but the child’s before or after school program is closed?
Yes. The DOL defines a “place of care” as a physical location in which care is provided for the child. The physical location does not need to be solely dedicated to such care. Examples include day care facilities, preschools, before and after school care programs, schools, homes, summer camps, summer enrichment programs, and respite care programs.

6. Can an employer deny FFCRA leave to an employee who previously teleworked while the child’s school was closed but intends to request leave if the child’s school remains closed for the fall?
No. The DOL has made clear that simply because an employee has been teleworking despite having their children at home does not mean the employee is prevented from now taking leave to care for the child whose school is closed for a COVID-19-related reason.

7. Can more than one parent take paid sick leave or expanded family and medical leave simultaneously to care for a child whose school or place of care is closed, or child care provider is unavailable, due to COVID-19 related reasons?
No. An employee may take EPSL or EFML leave to care for their child only when they need to, and actually are, caring for the child if they are unable to work or telework as a result of providing care. Generally, employees do not need to take such leave if a co-parent, co-guardian, or the usual child care provider is available to provide the care the child needs.

8. Can an employee take paid FFCRA leave to care for a child who is 18 years old or older?
It depends. EPSL and EFML leave may only be taken to care for an employee’s non-disabled child if they are under the age of 18. If the employee’s child is 18 years of age or older with a disability and cannot care for themselves due to that disability, the employee may take EPSL and EFML leave to care for the child if their school or place of care is closed or the child care provider is unavailable due to COVID-19-related reasons and the employee is unable to work or telework as a result. Additionally, EPSL is available to care for an individual who is subject to a federal, state, or local quarantine or isolation order related to COVID-19 or has been advised by a health care provider to self-quarantine due to concerns related to COVID-19. If an employee has a need to care for a child age 18 or older who needs care for these circumstances, the employee may take EPSL if they are unable to work or telework as a result of providing care. But in no event may the employee’s total paid sick leave exceed two weeks.

9. Can an employee use EPSL for child care purposes if the employee already used up their 80 hours of EPSL for other permitted purposes?
No. The DOL regulations state that employees are entitled to only a one-time use of 80 hours of EPSL, regardless of the reason. However, if an employee has not exhausted their full EPSL allotment, they may use the remaining time for other permitted reasons.

10. If a new employee has used up their EPSL leave allotment while employed at their previous employer, are they entitled to another 80 hours of EPSL leave with the new employer?
No. The DOL regulations specify that any person is limited to a total of 80 hours of EPSL. An employee who has taken all such leave and then changes employers is not entitled to additional EPSL from their new employer. However, an employee who has taken some (but fewer than 80 hours of) EPSL and then changes employers is entitled to the remaining portion of such leave from their new employer, but only if the new employer is covered by the FFCRA.

11. Can employees use EFML leave if they have already exhausted all of their FMLA leave allotment for the benefit year?
No. An employee may only take a total of 12 workweeks for FMLA or EFMLA reasons during the employer’s designated benefit year.

12. Does EFML contain the same limitation contained in the FMLA that requires spouses who work for the same employer to share the 12 weeks of leave (instead of each getting 12 weeks)?
No. Under 29 CFR 201(b), spouses who work for the same employer can be required to share a combined 12 weeks of FMLA leave to bond with their new child or care for their own parent with a serious health condition. The EFMLA does not provide for the same carveout. But keep in mind that while both employees who work for the same employer would each be eligible for EFMLA leave, they would likely not be able to both take leave to care for their child since they have to certify that there is not alternative suitable caregiver. 

13. What supporting documents must employees provide to their employers for FFCRA purposes?
When requesting EPSL or EFML leave, employees must provide the following information to their employers, either orally or in writing:

  • Employee’s name;
  • The date(s) for which employee requests leave;
  • The reason for leave; and
  • A statement that the employee is unable to work because of a FFCRA qualifying reason.

If the employee requests leave because they are subject to a quarantine or isolation order or to care for an individual subject to such an order, they should additionally provide the name of the government entity that issued the order. If the employee requests leave to self-quarantine based on the advice of a health care provider or to care for an individual who is self-quarantining based on such advice, they should also provide the name of the health care provider who gave the advice.

If the employee requests leave to care for a child whose school or place of care is closed, or child care provider is unavailable, they must also provide:

  • The name of the child;
  • The name of the school, place of care, or child care provider that has closed or become unavailable; and
  • A statement that no other suitable person is available to care for the child.

Notably, a New York federal court recently held that supporting documentation may not be required as a precondition for FFCRA leave. Thus, employers should ensure documentation is not required to commence the leave under the FFCRA. Supporting documentation can be submitted after the leave has commenced.

Labor Department Issues Guidance On Tracking Employees’ Teleworking Hours

August 27 - Posted at 11:27 AM Tagged: , , , , , ,

The U.S. Department of Labor just released a Field Assistance Bulletin (FAB) to provide employers with guidance regarding their wage and hour obligations to track the hours of employees working remotely or teleworking. Importantly, while the August 24 FAB directly speaks to employers’ Fair Labor Standards Act (FLSA) requirements under remote work arrangements that have arisen amid COVID-19, it also applies to all other telework or remote work arrangements. This guidance may be especially useful to employers who are new to the remote work world.

The Basics: What Does Federal Law Require?

As a reminder, the FLSA requires that an employer compensate employees for all hours it “suffers or permits” them to work. This means that employees must be compensated for time that may be unscheduled, but during which the employee still performs work. Thus, if an employer knows or has reason to believe that work is being performed, the time must be counted as hours worked. 

A challenge for employers is preventing work that it does not want performed. Notably, the employer cannot rely exclusively on its stated policy. Indeed, the guidance notes that it is not easy to define when an employer “has reason to believe that work is being performed.” The FAB reinforces that employers are not required to compensate employees for work they do not know about and have no reason to know about. 

New Challenges Raised By Remote Work

Rather, employers are only required to compensate employees for hours worked that are based on “actual knowledge” or “constructive knowledge” of that work. Employers will be deemed to have “actual knowledge” of employees’ regularly scheduled hours and through employee reports or other notification “actual knowledge” of the hours worked. Employers might be deemed to have “constructive knowledge” if it could have acquired information regarding additional work done through the exercise of “reasonable diligence.” 

Importantly, the FAB clarifies that “reasonable diligence” is limited to what the employer should have known, not what it “could have known.” This means employers are not necessarily required to “cross-reference” phone records or otherwise review other non-payroll records to determine whether or not employees were working beyond their scheduled hours, especially during these remote work times. 

What Should Employers Do?

Instead, you should provide employees with a process and procedure to report hours worked, particularly to ensure that unscheduled hours also are recorded. If the employee fails to utilize the process or procedure, you might be able to make an argument that the employee has prevented you from satisfying your obligation to compensate employees and thwarted your efforts to prevent unwanted work. Thus, you may be able to avoid FLSA liability for failing to compensate employees for work performed that you did not know about and that the employee didn’t advise you about. 

You should review your remote work and telework policies to ensure that they provide clear guidance to employees about your expectations regarding schedules and working hours. You should also implement a policy or procedure by which employees can report work that was performed outside their regularly scheduled time frames or their recorded hours.

Conclusion

Overall, you should exercise reasonable diligence to ensure that you capture all hours worked (whether scheduled or not, just as they must for employees working onsite). But you can take some solace in the USDOL’s guidance reminding us all that “constructive knowledge” is not without limits.

DOL Issues New FMLA Forms

July 30 - Posted at 2:37 PM Tagged: , , , ,

Earlier this month, the DOL’s Wage and Hour Division issued new model forms for employers to use when administering employee leave under the FMLA. The revised model notice of rights, certification, and designation forms were immediately effective and are now available to assist employers and employees in meeting their FMLA notice and certification obligations.

Background

The federal Family and Medical Leave Act (FMLA) covers private employers with 50 or more employees as well as public agencies and public and private elementary or secondary schools, regardless of the number of employees. The FMLA generally entitles eligible employees to take up to 12 weeks of unpaid, job-protected leave in a 12-month period for specified family and medical reasons and additional leave to care for a covered servicemember.

All covered employers must post a general notice about the FMLA (FMLA poster) in each workplace and distribute a notice to new hires. Additionally, covered employers who have FMLA-eligible employees must provide them with notices about: FMLA eligibility status, rights, and responsibilities; when specific leave is designated as FMLA leave; and the amount of time that will count against their FMLA leave entitlement. When an employee requests FMLA leave due to their own or a covered family member’s serious health condition, or for military family leave, the employer may require appropriate certification.

Revised FMLA forms

The DOL’s Wage and Hour Division (WHD) released revised versions in mid July of its model notice of rights, certification, and designation forms under the FMLA. According to the WHD, the new forms, which are effective immediately, are “simpler and easier for employees, employers, leave administrators and healthcare providers to understand and use.”

The following updated FMLA forms are now available to assist employers and employees in meeting their FMLA notification and certification obligations:

These optional-use forms can be used by employers to provide required notices and by employees to provide certification of their need for FMLA qualifying leave. The new forms are electronically fillable PDFs that can be saved and transmitted electronically. Employers may still use the agency’s prior model forms or they may use their own forms, as long as they provide the same basic notice information and require only the same basic certification information.

To some extent, the new model forms simplify FMLA administration by substituting check boxes for some previously required written responses. The revised Notice of Eligibility & Rights and Responsibilities form contains additional information on the substitution of paid leave and concurrent leave usage during a qualifying FMLA absence. The revised certification forms similarly include additional information on the circumstances in which employers may obtain follow-up information from health care providers and are reorganized to make it easier to determine whether a serious health condition exists. As the WHD made clear, an employee who already provided the required FMLA information using the old certification form cannot be required to provide that same information using the revised form.

Notably, the WHD did not revise the FMLA poster or issue a generic “Fitness-for-Duty” certification. Further, the new forms do not address the paid sick leave or expanded FMLA leave requirements of the Family First Coronavirus Response Act (FFCRA). 

 

 

Last week the Department of Health and Human Services, DOL and the IRS extended deadlines for multiple items related to health plan administration.  We don’t expect a huge influx of issues from the changes.  However, you should be aware so you don’t inadvertently misinform your employees.    

There were changes made regarding COBRA premium payments and election timeframes but since we have addressed those in a previous post, we won’t address it here.  COBRA administration is outsourced and those impacted are no longer employees so you can direct their questions to your COBRA administrator or to our office.  We’ll also skip the changes made to claims and appeals as that won’t apply to everyone.  That leaves the changes to your benefit program. 

As you are aware, most of the carriers have reduced or even eliminated the minimum number of hours a previously full-time employee must work to be covered by your plan.  Meaning, we can offer coverage to furloughed employees or those that have otherwise reduced hours to below the full-time requirements. 

In addition, the agencies, have decided to disregard the Outbreak Period (the time period between March 1st and at least 60 days after the announced end of the COVID 19 National Emergency) when establishing a deadline to request enrollment in coverage for certain qualifying events.  Meaning, the agencies, added a “pause” to the time frame required for employees to notify you about special enrollment periods, such as marriage or birth of a child.  We are not able to determine the exact end date of the Outbreak Period yet as that is based on an end to the National Emergency (and that had yet to be determined). 

For our examples, we’ll assume the COVID 19 National Emergency ends for the country on June 30th.  This would make the Outbreak Period March 1st to August 29th (60 days following June 30). 

Example 1 – Sally has a baby on March 3rd.  Normally, she would have 30 days to notify us that she would like to add the baby.  However, you are being instructed to disregard the Outbreak Period, therefore she has until September 28th (30 days from the end of the Outbreak Period) to let us know her desire to add her child.

Example 2 – Tom gets married June 1st.  He will have until September 28th to let us know if he intends to enroll his spouse. 

Under these examples, the dependents would be enrolled back to their original eligibility date and the employee would owe those back premiums.  I don’t expect this to become a big issue, however, depending on the employees circumstances it could.  The drawback to employers, other than the inconvenience, is this could have an impact on the group claims.  Normally Tom and Sally would only have 30 days to enroll their dependents.  With the extensions, employees have information about any issues or medical expenditures that have already happened along the way.  Carriers will be responsible to back up, enroll the dependent, and pay any claims incurred. 

Please let us know of any questions you have. 

DOL and IRS Announce Emergency COVID-19 COBRA Rules

May 04 - Posted at 10:49 AM Tagged: , , , , , ,

On April 29, 2020, the Department of Labor (DOL) and the Internal Revenue Service (IRS) announced in a Notice a “pause” in the timelines that affect many COBRA and HIPAA Special Enrollment Period timelines during the National Emergency due to the COVID-19 pandemic.

The National Emergency declaration for COVID-19 was issued on March 13, 2020, and as of the date of this writing, is still in effect. However, for purposes of COBRA in the eyes of the DOL, the “pause” date is set to begin on March 1, 2020. According to the Notice, the period from March 1 through 60 days after the date the National Emergency is declared ended is known as the “Outbreak Period.”

COBRA Timeline Changes During National Emergency

Normally, group health plan Qualified Beneficiaries (QBs) have 60 days from the date of a COBRA qualifying event to elect COBRA coverage, or in the case of a second COBRA qualifying event, to make a new COBRA election. Once a COBRA election is made, the first payment (going back to the date of the COBRA qualifying event) is due no more than 45 days later. After that, plan sponsors must allow at least a 30 day grace period for late COBRA payments.

According to the Notice, all of these timelines are affected. The 60-day election “clock” is paused beginning March 1, 2020 or later until the the end of the Outbreak Period. Similarly, the 45-day first payment “clock” is also paused during the Outbreak Period, as is the 30-day grace period for making COBRA payments.

Example

ABC Company’s group health plan is subject to COBRA continuation coverage. Jane Jetson and her family are covered under ABC’s group health plan. On February 1, 2020 Jane terminates employment at ABC, and on February 5th, Jane receives her COBRA election notice informing her she has 60 days from February 1st to make an election. Normally, that election period would end on April 1, 2020, 60 days from February 1st.

However, with the new DOL/IRS Notice, the “pause” button on the 60 day election period was hit on March 1st, the beginning of the Outbreak Period, so the 60 day clock stops at 29 days and doesn’t resume until the end of the Outbreak Period.  For sake of this example, let’s assume the National Emergency declaration is lifted on May 31, 2020. On July 30, 2020, 60 days after May 31st and thus the end of the Outbreak Period, the “pause” button is lifted and the COBRA election clock restarts for another 31 days to complete the 60 day COBRA election period, which now would end on August 30, 2020.

Continuing with the example and assumptions, if Jane did make her COBRA election to continue coverage on August 30th (the last day to do so), the 45 day clock to make the first payments back to February 1st would begin, and she would have to make all seven months’ payments by October 14, 2020. Of course, by that date she’d also owe payments for September and October as well, although she’d be in the middle of the grace period for October.

HIPAA Special Enrollment Period

Similarly, the 30 day HIPAA Special Enrollment Period (SEP) for qualified changes of status that impacts group health plan enrollment changes is also “paused” until after the end of the Outbreak Period.

Example

Homer Simpson also works for ABC Company, and has elected not to participate in ABC’s group health plan since he has coverage through his spouse Marge’s employer’s group health plan at XYZ Company. On March 15, 2020, Homer and Marge have a baby named Bart, and decide that Homer would like to cover his entire family under ABC’s plan. In normal times, Homer would have 30 days from the date of Bart’s birth to enroll in ABC’s group health plan utilizing the HIPAA SEP.

However, under the DOL/IRS Notice, that 30-day clock is on “pause” until the end of the Outbreak Period. Using the same assumption in the example above, that clock would start on July 30th, and Homer would have until August 30th to enroll his entire family.

Action Items for Plan Sponsors

Plan sponsors will need to pay close attention to this Notice and make proper adjustments in their established COBRA and HIPAA procedures to accommodate it. 

Employer Step By Step Guide to FFCRA Related Tax Credits for Paid Leave

April 03 - Posted at 9:00 AM Tagged: , , , ,
The IRS has provided  an initial guidance document to assist small- and medium-sized companies with the process of defraying the costs of paid sick leave required under the  Families First Coronavirus Response Act (FFCRA). The IRS also provided some guidance regarding what information you should receive from an employee in order to substantiate eligibility for the FFCRA tax credits.  

There is good news and bad news for employers struggling to keep up with the rapidly developing and somewhat-complex procedures. The good news is that you now have much-needed clarity on the “IRS forms and information” that the DOL referenced when it indicated that  certification questions would soon be answered. Fisher Phillips LLP has summarized below the required documentation required in each situation and the recommended written support you should request from your employees. 


The bad news is that the IRS guidance raises several additional questions that will need to be further clarified. For example, the IRS guidance provides that employers should receive a written request from the employee that contains, among other things, a “statement of the COVID-19 related reason the employee is requesting leave and written support for such reason.” But the IRS guidance does not specify what “written support” the employer may ask for. And because the FFCRA does not expressly provide that you may request certification (including doctor’s notes), it is still unclear whether and in what circumstances you may permissibly ask for doctor’s notes or similar information for some of the qualifying types of leave. 

For this reason, we recommend that you indicate on any certification forms you distribute that “ additional documentation may be required ” in the event further clarity is achieved and it becomes apparent that more “written support” is needed.

Documentation For Various Leave Situations

Below is the best information available to date (4/2/2020) that has been used to develop the following employer’s guide for navigating the tax credit process.
In order to qualify for the federal tax credit for providing the emergency paid leave, you will need to obtain a written request for the Emergency Paid Sick Leave or Emergency FMLA leave. In all leave situations, you should ensure you retain the following pieces of documentation:
  • Documentation to show how you determine the amount of qualified sick and family leave wages you paid to each employee, including records of work, telework, and qualified family leave;
  • Documentation to show how you determine the amount of qualified health plan expenses that the employer allocated to wages (see FAQ 31 through 36 on the IRS Guidance entitled “Determining the Amount of Allocable Qualified Health Plan Expenses” for methods to compute this allocation);
  • Copies of any completed Forms 7200 Advance of Employer Credits Due to COVID-19 that you submit to the IRS; and
  • Copies of the completed Forms 941, Employer’s Quarterly Federal Tax Return, that you submit to the IRS. If you use third-party payers to meet your employment tax obligations, you should retain the records of information you provide them regarding your entitlement to the credit claimed on Form 941.
With respect to individual leave situations, you should ensure you retain the following pieces of documentation:

A. Reason For Leave- Quarantine or Isolation Order

Employee is subject to a federal, state, or local quarantine or isolation order related to COVID-19.

Required Documentation:
  • Employee’s name
  • Date(s) the leave is requested
  • A statement of the COVID-19 related reason the employee is requesting leave and “written support” for such reason
  • A statement that the employee is unable to work or telework due to a COVID-19 related reason; and
  • The name of the government entity ordering the quarantine.

“Written Support” That Can Be Requested
It appears that the required “written support” could be met simply by obtaining the required documentation per the IRS guidelines. You could ask an employee for or otherwise locate a copy of the quarantine or isolation order. This may ultimately depend on  the U.S. Department of Labor’s final interpretation regarding whether a state or local shutdown order satisfies this qualifying reason. If so, then you should likely be able to locate the documentation. If not, and USDOL interprets this only to cover an individual quarantine or isolation order, then the employee would have to provide it to you as you would not have access to it.


B. Reason For Leave- Advised by Doctor to Self-Quarantine

Employee has been advised by a health care provider to self-quarantine due to COVID-19 concerns.

Required Documentation:
  • Employee’s name
  • Date(s) the leave is requested
  • A statement of the COVID-19 related reason the employee is requesting leave and “written support” for such reason
  • A statement that the employee is unable to work or telework due to a COVID-19 related reason; and
  • The name of the health care professional advising self-quarantine.

“Written Support” That Can Be Requested
It appears that the required “written support” could be met simply by obtaining the required documentation per the IRS guidelines, which includes a statement from the employee including the name of entity issuing/advising of quarantine. Note that it may be impractical or even contrary to local or state order to request a doctor’s note in such situations. 

C. Reason For Leave- Has Symptoms and Seeking Medical Advice

Employee is experiencing COVID-19 symptoms and seeking medical diagnosis.

Required Documentation:
  • Employee’s name
  • Date(s) the leave is requested
  • A statement of the COVID-19 related reason the employee is requesting leave and “written support” for such reason; and
  • A statement that the employee is unable to work or telework due to a COVID-19 related reason.

“Written Support” That Can Be Requested
You should be able to ask the employee for the name of the health care professional or health care provider that they are seeking a medical diagnosis from as this is required by the IRS guidelines for other emergency leave reasons. Note that it may be impractical or even contrary to local or state order to request a doctor’s note in such situations. 

D. Reason For Leave- Employee Caring for Person Under Quarantine/Isolation Orders

Employee is caring for an individual subject to a federal, state, or local quarantine or isolation order, or advised by a health care provider to self-quarantine due to COVID-19 concerns.

Required Documentation:
  • Employee’s name
  • Name of the person subject to quarantine or advised to self-quarantine
  • Relation of the person subject to quarantine or advised to self-quarantine
  • Date(s) the leave is requested
  • A statement of the COVID-19 related reason the employee is requesting leave and “written support” for such reason
  • A statement that the employee is unable to work or telework due to a COVID-19 related reason; and
  • The name of the government entity ordering the quarantine or the name of the health care professional advising self-quarantine.

“Written Support” That Can Be Requested
It appears that the required “written support” could be met simply by obtaining the required documentation per the IRS guidelines. You could ask an employee for or otherwise locate a copy of the quarantine or isolation order. This may ultimately depend on  the U.S. Department of Labor’s final interpretation regarding whether a state or local shutdown order satisfies this qualifying reason. If so, then you should likely be able to locate the documentation. If not, and USDOL interprets this only to cover an individual quarantine or isolation order, then the employee would have to provide it to you as you would not have access to it.

E. Reason For Leave- Caring for Child if School/Daycare is Closed

Employee is caring for their child if the child’s school or place of care is closed or the child’s care provider is unavailable due to public health emergency.

Required Documentation:
  • Employee’s name
  • Name and age of the child/children
  • Name of the school that has closed or place of care that is unavailable
  • Date(s) the leave is requested
  • A statement of the COVID-19 related reason the employee is requesting leave and “written support” for such reason. The “written support” should include:
    • A statement that the employee is unable to work or telework due to a COVID-19 related reason;
    • Representation that no other person will be providing care for the child during the period for which the employee is receiving family medical leave; and
  • If the child is older than 14 and needs care during daylight hours, a statement that special circumstances exist requiring the employee to provide care.

“Written Support” That Can Be Requested
The USDOL has stated that you can require workers to provide additional documentation in support of EFMLA taken to care for a child or children whose school or place of care is closed, or child care is unavailable, due to COVID-19 related reasons. This could include:
  • Notice of closures or unavailability from a school, place of care, or child care provider;
  • A notice of closure or unavailability posted on a government, school, or day care website;
  • A notice of closure or unavailability published in a newspaper; and
  • A notice of closure or unavailability emailed from an employee or official of the school, place of care, or child care provider.

F. Reason For Leave- Other

Employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.

Required Documentation:
  • Employee’s name
  • Date(s) the leave is requested
  • A statement of the COVID-19 related reason the employee is requesting leave and “written support” for such reason; and
  • A statement that the employee is unable to work or telework due to a COVID-19 related reason.

“Written Support” That Can Be Requested
To be determined on a case-by-case basis. 


Maintenance Of Records
You should maintain all records noted above for at least four years after the date the tax becomes due or is paid, whichever is later.

New Change from DOL on FFCRA

April 01 - Posted at 9:00 AM Tagged: , , , , , , , ,
The Department of Labor issued this afternoon “temporary regulations” to assist with interpreting and complying the Families First Coronavirus Relief Act (FFCRA), which provides for paid sick leave and expanded FMLA leave.  The text of the regulations can be found here
 
Two significant portions of the regulations stand out at first glance:

 
Item #1- 

The “stay at home” orders are now considered “quarantine or isolation orders” under the FFCRA.  The DOL provides the following guidance (located on p. 88 of the PDF at the above link): 
 
“For the purposes of the EPSLA [the portion of the FFCRA that provides for 80 hours of paid sick leave], a quarantine or isolation order includes quarantine, isolation, containment, shelter-in-place, or stay-at-home orders issued by any Federal, State, or local government authority that cause the Employee to be unable to work even though his or her Employer has work that the Employee could perform but for the order. This also includes when a Federal, State, or local government authority has advised categories of citizens (e.g., of certain age ranges or of certain medical conditions) to shelter in place, stay at home, isolate, or quarantine, causing those categories of Employees to be unable to work even though their Employers have work for them.”
 

Item #2- 

The DOL has provided guidance as to which smaller employers will be exempt from the paid sick leave and expanded FMLA provisions.  
The following is from p. 103:  
 
“Exemption from requirement to provide leave under the EPSLA Section 5102(a)(5) and the EFMLEA for Employers with fewer than 50 Employees. (1) An Employer, including a religious or nonprofit organization, with fewer than 50 Employees (small business) is exempt from providing Paid Sick Leave under the EPSLA and Expanded Family and Medical Leave under the EFMLEA when the imposition of such requirements would jeopardize the viability of the business as a going concern. A small business under this section is entitled to this exemption if an authorized officer of the business has determined that: (i) The leave requested under either section 102(a)(1)(F) of the FMLA or section 5102(a)(5) of the EPSLA would result in the small business’s expenses and financial obligations exceeding available business revenues and cause the small business to cease operating at a minimal capacity; (ii) The absence of the Employee or Employees requesting leave under either section 102(a)(1)(F) of the FMLA or section 5102(a)(5) of the EPSLA would entail a substantial risk to the financial health or operational capabilities of the business because of their specialized skills, knowledge of the business, or responsibilities; or (iii) There are not sufficient workers who are able, willing, and qualified, and who will be available at the time and place needed, to perform the labor or services provided by the Employee or Employees requesting leave under either section 102(a)(1)(F) of the FMLA or section 5102(a)(5) of the EPSLA, and these labor or services are needed for the small business to operate at a minimal capacity.”
 
 
Since the State of Florida has been put under at Stay at Home Executive Order, the following will now apply:
  • Employees with an “essential business” will still report to work as normal
  • Employees with a “non-essential business” will now qualify for the 80 hour Emergency Paid Sick Leave under FCCRA.
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