Top 7 Things Health and Welfare Sponsors Should Be Thinking About Now

It’s hard to believe August is already here, and with 2021 annual enrollment and year-end rapidly approaching, there are a number of issues health and welfare plan sponsors should be thinking about now.

Here’s a list of some of the most important items:

  1. SMMs. Have you issued a summary of material modifications (SMM) for any changes you’ve made to your plan for COVID-19 testing/ treatment and for telemedicine?
  2. Deadline extensions. Have you talked to your vendors about the extensions the agencies created between March 1, 2020, and the end of the pandemic period (as yet unknown) for COBRA, special enrollment and claims periods? Have you added information regarding the deadline extension to any claim and appeal responses issued during the pandemic period?
  3. Plan amendments. Do you need to amend your plans for any of the following? (Note that many of these plan amendments are not required to be completed until 2021, but you may wish to address them sooner.)
    1. Increasing the health flexible spending account carryover from $500 to $550
    2. Allowing retroactive pre-tax deductions for special enrollments on account of birth or adoption during the pandemic period for those enrolling late under the deadline extensions
    3. Allowing employees to enroll, change or revoke their existing health plan elections for 2020
    4. Allowing employees to decrease or increase their existing dependent care and/or health flexible spending account elections for 2020
    5. Reflecting any plan changes as a result of furloughs (such as continuing coverage that would otherwise end)
    6. For a plan year or grace period ending in 2020, giving participants until 12/31/20 to incur eligible health and/or dependent care expenses
    7. Allowing your health flexible spending account to cover over-the-counter drugs and menstrual care products (beginning as early as 1/1/20).
  4. COBRA. Have you reviewed your COBRA notices for accuracy/conformance to the COBRA regulations in light of increased litigation in this area?  Have you updated your COBRA notice for the new Department of Labor models published in May 2020 that address coordination of COBRA with Medicare?
  5. Premium refunds. Have you received any premium refunds/rebates from insurers or third-party administrators due to favorable claims experience during the pandemic? If so, are you aware of and following the fiduciary guidelines regarding such refunds?
  6. Wellness plans. Will employees be able to complete any biometric screenings required to obtain wellness credits? If not, do you need to make any changes to your wellness program?
  7. Employer Shared Responsibility. If you use the lookback measurement method, how are you treating coverage for employees who are furloughed during their stability period? How are you counting the furlough period for purposes of the measurement-period hours calculation?

If you need assistance in thinking through these issues, please contact your Faegre Drinker attorney with questions.

IRS Increases the Health FSA Carryover Limit and Addresses Premium Reimbursement under ICHRAs

On May 12, 2020, the Internal Revenue Service (IRS) issued Notice 2020-33 (the Notice), which increases the maximum health flexible spending account (FSA) carryover limit. The Notice also addresses a gap in existing guidance related to reimbursement of individual insurance premiums by an individual coverage health reimbursement arrangement (ICHRA). Along with the Notice, the IRS also issued Notice 2020-29 to provide temporary relief related to the cafeteria plan mid-year change in status rules (Notice 2020-29 is discussed in our earlier blog post, here).

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IRS Issues Welcome Guidance on Mid-Year Cafeteria Plan Election Changes and Other Health & Welfare Matters

On May 12, 2020, the Internal Revenue Service (IRS) issued Notice 2020-29 (the Notice), an important piece of guidance for employers that sponsor health & welfare plans.

The Notice provides much-needed flexibility for employers who are dealing with unexpected requests and circumstances as a result of the 2019-nCoV (COVID-19) pandemic. As discussed below, the Notice permits – but does not require – cafeteria plans to provide additional opportunities for mid-year election changes for health coverage, health flexible spending account (health FSA) coverage and dependent care FSA (dependent care FSA) coverage. It also permits plans to extend the claims periods for health FSA and dependent care FSA expense reimbursement, and it clarifies earlier guidance regarding coverage of telehealth and COVID-19-related items under a high deductible health plan (HDHP).

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Agency Guidance on Health & Welfare Issues Related to COVID-19

As the COVID-19 pandemic continues, our clients are dealing with rapidly evolving compliance issues with respect to health and welfare benefit plans and the implementation of existing and new regulatory requirements. Below is a chart providing links to guidance issued by various government agencies with respect to health and welfare plan issues related to COVID-19. This chart is current as of May 12, 2020. There are a number of questions and issues outstanding, and we expect further guidance. Please contact your Faegre Drinker attorney with questions and/or updates regarding this guidance.

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FAQs on COVID-19 Group Health Plan Coverage Implementation

The Department of Labor (DOL), the Department of Health and Human Services (HHS), and the Department of the Treasury (collectively, “the Departments”) issued Frequently Asked Questions for health plans implementing coverage changes under the Families First Coronavirus Response Act (Families First Act) and the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

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Audiocast – Navigating Employee Benefits in an Evolving COVID-19 Pandemic

Faegre Drinker and Multnomah Group held a roundtable discussion designed to provide practical advice on navigating employee benefits during the COVID-19 pandemic. Employers are dealing with remote work, layoffs, reduced hours, as well as determining how these changes will impact the operations of their employee benefit plans. Furthermore, with the passage of recent legislation such as the Families First Coronavirus Response Act and potential passage of the Coronavirus Aid, Relief and Economic Security Act, employers are faced with more challenges and changes.

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Benefit Plan FAQs on COVID-19

IRS Guidance Related to Coronavirus Testing/Treatment for HDHPs/HSAs

Last week, the IRS issued guidance confirming that high-deductible health plans with health savings accounts can provide coronavirus testing and treatment at no cost to participants without affecting eligibility for health savings accounts.  Without this guidance, any non-preventive services provided to such participants before meeting their plan deductible would have disqualified the participants from health savings account eligibility.  This guidance is welcome, as employers attempt to remove obstacles to testing and treatment for coronavirus.

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