New COVID-19 Guidance: Government Requires Health Plans to Cover At-Home COVID-19 Tests

On January 10, 2022, the Departments of Health and Human Services, Labor and Treasury issued guidance addressing a group health plan’s obligation to cover the cost of over-the-counter, at-home COVID-19 tests starting January 15, 2022.  The new coverage requirement means that enrolled individuals can go online or to a pharmacy and buy an over-the-counter FDA-approved COVID-19 diagnostic test and either have it paid for up front by their health plan or be reimbursed by submitting a claim without any cost-sharing requirements (such as deductibles, co-payments or co-insurance).  The guidance provides that beginning January 15, 2022 through the end of the declared public health emergency, plans must cover at least eight (8) over-the-counter at-home tests per enrolled individual per 30-day (or calendar-month) period without an assessment or provider involvement.  This does not affect the obligation to provide coverage for COVID-19 tests with a provider’s involvement or prescription.

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Day of the Dead…lines: Updating Your Plan’s Safe Harbor Notice

As the end of year approaches, now is the time for safe harbor 401(k) plan sponsors to prepare their annual safe harbor notices.

401(k) Plans that satisfy nondiscrimination testing via the employer contribution safe harbors in Internal Revenue Code §§ 401(k)(12) and (13) are required to send notices to participants within a reasonable time prior to the start of the plan year. Per IRS regulations, the timing is deemed reasonable if the notice is provided at least 30 days (and no more than 90 days) prior to the start of the plan year (so, by December 1 for calendar-year plans).

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IRS Guidance on New COBRA Subsidy Clarifies Many Outstanding Questions

On May 18, 2021, the IRS released Notice 2021-31, a lengthy series of FAQs clarifying many aspects of the new COBRA subsidy made available under the American Rescue Plan Act of 2021 (ARPA). The FAQs address many of the issues raised by plan sponsors since the subsidy was enacted earlier this year. Although this blog post does not address every nuance of the guidance—the IRS issued a whopping 86 FAQs—below we point out some clarifications that might be of interest to group health plan sponsors:

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IRS Clarifies Relief for Health FSA Benefits under the Consolidated Appropriations Act of 2021

As noted in our prior blog posts here and here, Section 214 of the Consolidated Appropriations Act of 2021 (“Act”) permits employers to amend their flexible spending account (FSA) plans to help participants avoid forfeiting unused amounts for the 2020 and 2021 plan years.  The Act offers employers a myriad of temporary relief options for health FSAs—including expanded carryover relief, extended grace period relief, mid-year election change relief and post-termination spend down relief.  The IRS recently issued Notice 2021-15 (“Notice”) giving employers significant flexibility to tailor these relief options to their particular concerns and objectives.  This blog post answers common questions about how the guidance applies to health FSA benefits; the application to dependent care FSA benefits will be discussed in a forthcoming blog post.

Employers should keep in mind that:

  • All of the relief options are optional. An employer can choose not to adopt any of them or can adopt only some options.
  • All of the relief options require plan amendments.
  • The options do not permit participants to receive refunds of their unused contributions.
  • The options do not permit participants to use health FSA balances for dependent care expenses or vice versa.

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Employers Must Provide COBRA Subsidies to Assistance Eligible Individuals

The American Rescue Plan Act of 2021 (ARPA), which was signed into law by President Biden on March 11, 2021, includes COBRA subsidy provisions that are significant – both for the individuals who will become eligible for COBRA subsidies and for the employers who will be required to subsidize COBRA coverage. The key requirements of the COBRA subsidies, which are effective beginning April 1, 2021, are outlined below.

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Recent Webinar Regarding Health Plan Provisions in Consolidated Appropriations Act: New Legislation Brings COVID-19 Relief and Shines a Light on Health Plan Price Transparency

As the pandemic continues, employers are increasingly faced with compliance challenges in response to new and pending legislation. Click here to view our webinar recording as members of Faegre Drinker’s benefits and executive compensation group discussed various welfare benefits provisions in the Consolidated Appropriations Act, 2021 and the new provisions employers will need to navigate. Specifically, our team explored:
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IRS Extends Deadline for Certain ACA Reporting Requirements

In Notice 2020-76 (Notice), the IRS extended the deadline from January 31, 2021, to March 2, 2021, for furnishing Forms 1095-B and 1095-C to individuals for reporting year 2020. Note that the Notice does not extend the deadline to file Forms 1094-B, 1095-B, 1094-C or 1095-C with the IRS. Those forms must be filed with the IRS by March 1, 2021 or if filed electronically, by March 31, 2021.

The Notice also extends “good-faith” reporting relief for employers that report incomplete or incorrect information on their returns (such as missing taxpayer identification numbers or dates of birth).  This relief is available only when the employer can show it made a good-faith effort to comply with the filing requirements, such as gathering and transmitting the necessary data to an agent to prepare the data for submission, or testing its ability to transmit information to the IRS.  The IRS has provided this good-faith relief in the past, but the Notice states that the 2020 reporting year will be the final year this type of relief is available.

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IRS Issues New Guidance for Mid-Year Changes to Safe Harbor 401(k) and 403(b) Plans

On June 29, 2020, the IRS issued Notice 2020-52 addressing mid-year reductions and suspensions of contributions to Safe Harbor 401(k) and 403(b) plans. In response to the COVID-19 pandemic, the Notice provides some temporary relief for plan sponsors that wish to reduce or eliminate safe harbor contributions mid-year.

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COVID-19 Joint Agency Relief Part 3: COBRA and Special Enrollment Extensions

In light of the COVID-19 pandemic, the federal government recently issued guidance extending various benefits-related deadlines. The guidance includes a Notification of Relief that essentially tolls the timeframes associated with various rights until after the COVID-19 National Emergency. In this alert, we focus on what the tolling means with respect to plan sponsor obligations and participant rights under the Consolidated Omnibus Budget Reconciliation Act (COBRA) and the Health Insurance Portability and Accountability Act (HIPAA) special enrollment provisions.

For the full alert, visit the Faegre Drinker website.

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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