Coronavirus (COVID-19) Regulations & Benefit Plan Considerations

Table of Contents

Legislation Overview

• Families First Coronavirus Response Act (FFCRA)
• The Coronavirus Aid, Relief, and Economic Security Act (CARES Act)
• Coronavirus (COVID-19) Resources by State

FFCRA Compliance Considerations

• Mandated Coverage
• Expanded Family and Medical Leave Act (EFMLA) Provisions
• Emergency Paid Sick Leave
• Documentation for Leave Under Either Paid Sick Leave or Expanded Family and Medical Leave
• DOL Temporary Rule: Paid Leave under the FFCRA
• Tax Credits

The CARES Act Compliance Considerations

• Expansion of Coverage for COVID-19 Testing – Updates to the FFCRA
• Reimbursement for COVID-19 Testing
• Coverage for Preventive Services and Vaccines for Coronavirus
• Coverage Confidentiality & Disclosure of Records Relating to Substance Use Disorder, including HIPAA Updates
• Over-the-Counter Drugs and Menstrual Care Products
• Telehealth Services Encouraged

Benefit Plan Compliance Considerations

• Americans with Disabilities Act (ADA)
• Benefit Plan Documents
• Cafeteria Plans
• COBRA
• Essential Health Benefits (EHBs)
• Fiduciary Compliance Guidance
• Flexible Savings Accounts (FSAs)
• Form 5500 Series and Form M-1
• GINA
• Health Savings Accounts (HSAs) with High Deductible Health Plans (HDHPs)
• HIPAA: Notifications of Enforcement Discretion

• BUSINESS ASSOCIATES’ (BA) USES & DISCLOSURES OF PHI
• TELEHEALTH REMOTE COMMUNICATIONS
• HIPAA: Privacy & Security
• Short-Term Disability

When do Regulatory Changes Apply?
Extension of Deadlines

• Extension of Notices and Disclosures under Title I of ERISA
  • EBSA Disaster Relief Notice 2020-01
• Extension of Timeframes for COBRA, HIPAA, and Claims Decisions
  • Final Rule
  • Examples

EXPIRED REGULATIONS

Legislation Overview

REMINDER: Regulatory actions require plans to extend certain time frames (e.g., claims and appeals deadlines).

The FFCRA and CARES Act legislation extended certain guidelines applicable to plan administration actions. What does this mean for employers? Plans covered by ERISA or the IRS Code are likely to experience administrative management changes to comply with regulatory deadline extensions.

Per the Department of Labor’s Disaster Relief Notice 2021-01 (Notice), revised deadline extensions last the earlier of

• The “Outbreak Period”: March 1, 2020 through 60 days after the announced end of the National Emergency, OR
• 1 year from the date both individuals and plans with applicable timeframes are first eligible for relief.

For plan administrators, this essentially means each person now has an individual deadline based on their specific situation. Furthermore, plans must act in good faith and consider their fiduciary duty to act in the best interest of plan participants.  This may include additional notification to a participant of a deadline affecting coverage.

The Notice affects deadlines for the following: COBRA; HIPAA Special Enrollment; Claims Procedures; and the External Review Process.  The Notice includes deadlines to:

• Elect COBRA;
• Pay COBRA premiums;
• Elect HIPAA special enrollment;
• File claims, appeals, and requests for external review; and
• Plan to provide COBRA election notice by plans to participants.

Examples:

• If the pandemic ends August 31st 2021, the Outbreak Period is disregarded, and ends 60 days later, or October 30th, 2021.
• If a qualified beneficiary would have been required to make a COBRA election by March 1, 2022, the Notice delays that requirement until February 28, 2023, which is the earlier of 1 year from March 1, 2020 or the end of the Outbreak Period (which remains ongoing).
• Similarly, if a qualified beneficiary would have been required to make a COBRA election by March 1, 2023, the Notice delays that election requirement until the earlier of 1 year from that date (i.e., March 1, 2024) or 60 days after the end of the Outbreak Period.

Families First Coronavirus Response Act (FFCRA):

• On March 18, 2020, the FFCRA was signed into law. Its aim is to reduce economic strain on citizens and employers by modifying several regulations, including emergency paid sick leave, FMLA expansion, and tax relief.
• Read the FFCRA blog post for a summary of the Act’s effects on an employer’s administration of benefit plan compliance & human resource functions.
• The Department of Labor set a temporary non-enforcement period for 30 days after the enactment of the FFCRA (i.e., March 18 through April 17, 2020) for employers who have made reasonable, good faith efforts to comply.
• As of April 1, 2020, employers must distribute the required FFCRA Notice; click here for FAQ
  • Employer Notice
  • Federal Employer Notice

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act)

• On March 27, 2020, the CARES Act was signed into law. It includes multiple provisions affecting employers and employee benefit plans, which are highlighted below.

Coronavirus (COVID-19) Resources by State

• Though the FFCRA is a federal mandate, states may take necessary measures for the safety of their citizens. 
• Click for a complete list of state-by-state COVID-19 websites.

 

FFCRA Compliance Considerations:

Mandated Coverage

• Effective March 18, 2020
• All group health plansincluding grandfathered plans and health insurance issuers offering group or individual health insurance coverage must provide coverage for FDA-Approved COVID-19 diagnostic testing and related services without cost sharing (e.g., no deductible, copays, coinsurance, or any other form of out-of-pocket expense).
• Coverage must include services furnished during in-person (or telehealth) health care provider office visits, urgent care center visits, or emergency room visits resulting in an order for, or administration of, a covered diagnostic test.
  •  FAQs posted on April 11, 2020, broadly construe the term “visit” to include both traditional and non-traditional care settings (e.g., COVID-19 drive-through screenings and testing sites where licensed healthcare providers are administering COVID-19 diagnostic testing).
• IRS Notice 2020-15 permits group health plans to cover both testing and treatment on a first-dollar basis without affecting the eligibility of participants to participate in Health Savings Accounts (HSAs).
• IRS Notice 2020-29 clarifies that the following are testing and treatment for COVID-19 for purposes of Notice 2020-15:
  • The panel of diagnostic testing for influenza A&B;
  • Norovirus and other coronaviruses, and respiratory syncytial virus (RSV); and
  • Any items or services required to be covered with zero cost sharing under the FFCRA.

The CARES Act Compliance Considerations:

Expansion of Coverage for COVID-19 Testing – Updates to the FFCRA

 

• Effective March 27, 2020
• The CARES Act expands coverage for COVID-19 diagnostic testing from what was previously mandated in the Families First Coronavirus Response Act (FFCRA) To read the full scope of mandates, please read our blog post.
• Group health plans must cover, without cost-sharing, the following diagnostic tests:
  • FDA-approved tests (previously in the FFCRA);
  • Tests for which the developer has requested or intends to request FDA emergency use authorization (unless the test is denied by the FDA);
  • Tests developed in and authorized by a State that has notified the Secretary of Health and Human Services of its intention to review tests intended to diagnose COVID-19; or
  • Other tests that the Secretary determines appropriate.

On April 11, 2020, the Department of Labor (DOL), Health and Human Services (HHS), and the Treasury (collectively, the Departments) released FAQs regarding the FFCRA and CARES Act. Within these FAQs, the Departments expanded the term “diagnostic testing” to include serological tests. Serological tests for COVID-19 are used to detect antibodies against the SARS-CoV-2 virus, and are intended for use in the diagnosis of the disease or condition of having current or past infection with SARS-CoV-2, the virus which causes COVID-19.

Reimbursement for COVID-19 Testing

 

• A group health plan or health insurance issuer must reimburse the “provider of the diagnostic testing” with one of the following rates:
  • The negotiated rate with the provider prior to the public health emergency; or
  • Absent a negotiated rate, the plan shall reimburse the provider in an amount equal to the cash price for such service listed on a public internet website
• The CARES Act also mandates that each provider of a diagnostic test for COVID-19 must post the cash price for the test on the provider’s public website or incur a civil monetary penalty.

Over-the-Counter COVID-19 Testing: FAQ 51:

• Beginning January 15, 2022, health plans and health insurance issuers (collectively, Plans) must cover certain OTC COVID-19 tests without cost-sharing, prior authorization, or other medical management requirements.  This applies to tests that may be purchased by individuals without a prescription or individualized clinical assessment from a health care provider.
  • Plans may require participants to submit a claim for reimbursement, but are strongly encouraged to provide direct coverage by reimbursing sellers directly without requiring participants to incur any upfront costs.
  • If a Plan does not have a network of providers, the Plan must reimburse for the actual cost the test.
  • Plans that do have a network may not limit coverage to tests purchased through its network of preferred providers or retailers, but may limit payment to out-of-network providers to $12 per test.
  • Some OTC COVID-19 tests are sold in packages containing more than one test.  If a Plan limits reimbursement for OTC COVID-19 tests from non-preferred sellers, pharmacies, or retailers to $12 per test, the Plan must calculate the reimbursement based on the number of tests in a package.
  • Plans may limit the number of OTC COVID-19 tests covered for each covered person to no less than 8 tests per 30-day period (or per calendar month).  Each test in a package containing multiple tests counts as one test.
  • Plans are not required to cover tests that are required for employment purposes.
  • Previous guidance regarding notice of modification of the Plan’s terms continues to apply.  This means that a Plan would not have to give notice of Plan changes though an amended summary of benefits and coverage 60 days prior to the effective date, provided that it gives notice as soon as reasonably practicable.

Coverage for Preventive Services and Vaccines for Coronavirus

 

• Group health plans and issuers must cover any “qualifying coronavirus preventive service” – meaning any items, service, or immunization intended to prevent or mitigate coronavirus.
• Plans must comply within 15 days after a recommendation is made relating to the qualifying coronavirus preventive service.

Coverage Confidentiality & Disclosure of Records Relating to Substance Use Disorder, including HIPAA Updates

• The CARES Act modifies the Public Health Service Act (PHSA), (42 USC 290 dd-2(b)). A summary of changes by the CARES Act:
  • Ensures regulations consistently use the term “substance use disorder.”
  • Expands Consent language: once prior written consent of a patient has been obtained (and only need be given once), contents may be used or disclosed by CE, business associates, or special programs in accordance with HIPAA.
  • Adds Antidiscrimination language clarifying that no entity or recipient of federal funds shall discriminate against an individual based upon inadvertent or intentional disclosure of substance use disorder records.

Over-the-Counter Drugs and Menstrual Care Products

• The CARES Act deleted the requirement that individuals must obtain a prescription from a doctor to be reimbursed for over the counter (OTC) medicines and drugs under health saving accounts (HSAs), health flexible spending accounts (health FSAs), archer MSAs, and health reimbursement arrangements (HRAs) (i.e., it appears that any OTC drug may now be treated as “being for medical care”).
• The Act also added menstrual care products as eligible medical expenses for purposes of these accounts. It does not appear that this alters the more general rule for OTC products (and other medical care as well) that the treatment must be for the diagnosis, cure, mitigation, treatment, or prevention of disease.
• Note that products intended for general health or well-being still do not qualify as medical care.

Telehealth Services Encouraged

 

• Various provisions within the CARES Act encourage the use of telehealth services and permit the Secretary of Health and Human Services (HHS) to permit such uses, including:
  • HDHP Telehealth Safe Harbor Provision. For plan years beginning on or before December 31, 2021, and services provided on or after January 1, 2020, the CARES Act added a safe harbor provision to section 233(c)(2) of the Internal Revenue Code (IRC), stating that plans will not fail to be a high deductible health plan (HDHP) for providing coverage of “telehealth or other remote care services” without a deductible. In other words, an individual may have a plan that includes remote care without disqualifying them from having an HDHP.
    • IRS Notice 2020-29 provides the following example:
      • An otherwise eligible individual with coverage under an HDHP who also received coverage beginning February 15, 2020 for telehealth and other remote care services (under an arrangement that is not an HDHP) and before satisfying the deductible for the HDHP will not be disqualified from contributing to an HSA during 2020.
  • Increasing Medicare Telehealth Flexibilities. During the COVID-19 emergency period, the Secretary of HHS may waive all statutory Medicare coverage requirements for telehealth.
  • Medicare Assessments and Certification through Telehealth. Prior to the CARES Act, certain assessments and certification requirements for Medicare beneficiaries must be done through an in-person face-to-face encounter. During the emergency period, these requirements may be conducted through telehealth services.

 

Benefit Plan Compliance Considerations:

Americans with Disabilities Act (ADA)

The ADA typically prohibits employers from requiring employees to submit to medical exams, however, because the CDC and state/local health authorities have acknowledged community spread of COVID-19 and issued attendant precautions, special rules apply in the case of pandemics such as COVID-19:

• Employers may measure employees’ body temperature, which is considered a medical examination.
• Employers may ask such employees if they are experiencing symptoms of the pandemic virus. For COVID-19, these include symptoms such as fever, chills, cough, shortness of breath, or sore throat.
• Employers must still maintain all information about employee illness as a confidential medical record in compliance with the ADA.

Benefit Plan Documents

All plans must:

• Update the following documents to reflect mandatory coverage requirementsPlans must provide no-cost coverage of COVID-19 testing and treatment.:
  • Summary of Material Modifications (SMM)
  • Summary of Benefits and Coverage (SBC)Employees requesting a copy of the plan SBC must receive it within 7 days of request.
  • Summary Plan Description (SPD)SPDs must be provided within 30 days of employees’ request.
• Review electronic disclosure rules for employees working remotely

Typically, a plan or issuer making a material modification in any of the terms of the plan or coverage that would affect the content of the SBC (that is not reflected in the most recently provided SBC), and that occurs other than in connection with a renewal or reissuance of coverage, must provide the notice of the modification no later than 60 days prior to the date on which the modification becomes effective.

However, the Departments explained in recent FAQs that they will not take enforcement action against any plan and/or issuer that makes such modification to provide greater coverage in relation to the diagnosis and/or treatment of COVID-19 without providing at least 60 days advance notice. Plans and issuers still need to provide notices of these changes as soon as reasonably practicable.

Cafeteria Plans

A section 125 Cafeteria Plan is a written plan maintained by an employer under which all participants are employees, and all participants may choose among two or more benefits consisting of cash and qualified benefits (e.g., employer-provided health plans, health care FSAs, and dependent care assistances programs).

Generally, employee elections of qualified benefits must be made prior to the first day of the plan year and is irrevocable for the plan year (unless the employee experiences a permitted election change event such as when an employee experiences a significant change in cost of coverage).

However, due to unanticipated changes in the need for medical care in response to COVID-19, IRS Notice 2020-29 has relaxed these election rules. Employers sponsoring self-insured plans or insured plans may now amend one or more of their section 125 cafeteria plans to allow employees to make the following mid-year elections:

1. Make a new election for employer-sponsored health coverage on a prospective basis, if the employee initially declined to elect employer-sponsored health coverage;
2. Revoke an existing election for employer-sponsored health coverage and make a new election to enroll in a different health coverage sponsored by the same employer on a prospective basis (including changing enrollment from self-only coverage to family coverage);
3. Revoke an existing election for employer-sponsored health coverage on a prospective basis, provided that the employee attests in writing that the employee is enrolled, or immediately will enroll, in other health coverage not sponsored by the employer (page 8 of the Notice provides an example of an acceptable written attestation);
4. Revoke an election, make a new election, or decrease or increase an existing election regarding a health FSA on a prospective basis (this applies to all types of health FSAs); and
5. Revoke an election, make a new election, or decrease or increases an existing election regarding a dependent care assistance program on a prospective basis.

The Notice reminds us that the mid-year elections described above may be utilized at the discretion of the employer and that, if permitted, they must be applied on a prospective basis only and must comply with section 125 nondiscrimination rules. Additionally, if an employer decides to amend one of more of its section 125 cafeteria plans to provide any of the mid-year election changes noted above, it must adopt a plan amendment.

• Note: Core Cafeteria Plan principles are in place: cash outs of unused contributions and retroactive election changes are generally unpermitted.
• Note: Permitting carryovers, grace periods, or extended coverage periods under a health FSA may impact HSA eligibility.

COBRA

COBRA coverage applies to employees on furlough. Employers need to be aware of when a qualifying event may occur because of a reduction in hours or involuntary termination, as sending of notices is required to avoid excise taxes.

• Some employers may elect to maintain coverage for employees on furlough as if they were active employees.  Nevertheless, qualifying event notices may need to be sent.
• Depending on the plan design, the notice may be triggered by the qualifying event itself or the date coverage is lost.
• Fully insured employers and self-insured employers with stop-loss coverage will need to coordinate their response with their respective carriers.

IRS Notice 2021-58 provides clarification on how to apply the COBRA extensions created under May 4, 2020’s Joint Notice. The Joint Notice required plans to disregard the period for taking certain actions related to COBRA until 60 days after the end of the COVID-19 Outbreak Period, subject to a maximum disregarded period of one year.

The Joint Notice applies to the:

• 60-day election period for COBRA continuation coverage.
• dates for making COBRA premium payments.
• date for individuals to notify the plan of a qualifying event or determination of disability.
• date for a plan to provide a COBRA election notice.

The disregarded period applies on an individual basis beginning on the date the individual or plan was first eligible for relief under the Joint Notice.

Notice 2021-58 clarifies that the disregarded period for an individual to elect COBRA continuation coverage and the disregarded period for the individual to make initial and subsequent COBRA premium payments generally run concurrently.

The IRS notes that in the absence of its clarification that the disregarded periods run concurrently, some individuals may have assumed that they ran independently.  Therefore, to avoid inequitable outcomes, in no event will an individual be required to make the initial premium payment before November 1, 2021, even if November 1, 2021, is more than one year and 105 days after the date the election notice was received, provided that the individual makes the initial premium payment within one year and 45 days after the date of the election.

Notice 2021-58 reiterates that The Joint Notice extensions do not affect ARPA premium assistance time periods.

Essential Health Benefits (EHBs)

EHBs generally include coverage for the diagnosis and treatment of COVID-19.

• HHS has released FAQs about EHBs and COVID-19.
• Self-funded plans and those in the large group market are not required to offer EHBs; however, if they do offer EHBs:
  • plans must not impose annual or lifetime limits on those benefits, and
  • must apply the plans’ annual out-of-pocket maximum to them.

Fiduciary Compliance Guidance

The Department of Labor (DOL) reminds ERISA fiduciaries to continue to act reasonably, prudently, and in the interest of the plan participants and beneficiaries who rely on their health, retirement, and other employee benefit plans for their physical and economic wellbeing during the COVID-19 crisis. Plan fiduciaries should:

• Make reasonable accommodations to prevent the loss of benefits or undue delay in benefits payments in such cases; and
• Attempt to minimize the possibility of individuals losing benefits because of a failure to comply with pre-established timeframes.

The DOL will continue to emphasize compliance assistance and include grace periods and other relief where appropriate during the COVID-19 outbreak.

Flexible Savings Accounts (FSAs)

• Section 125 plans permit pre-tax payroll contributions to health FSAs earmarked for certain medical and dependent care expenses.
• FSAs still only permit employees to use such funds for “qualified medical expenses”.

Health FSA Expansions per the Consolidated Appropriations Act (CAA) of 2021

• Health or dependent care FSAs can allow unused amounts from a plan year ending in 2020 to be carried over to 2021, and unused amounts from a plan year ending in 2021 to be carried over to 2022.
• Grace periods for plan years ending in 2020 or 2021 may be extended to 12 months after the end of the plan year.
• For plan years ending in 2021, plans may allow employees to make a prospective election change to modify their FSA contributions without a change in status.
• Health FSAs may allow employees who ceased participation during the 2020 or 2021 calendar year to continue to receive reimbursements from unused benefits or contributions through the end of plan year in which participation ceased (including any grace period).
• Dependent care FSAs may extend the maximum age from 12 to 13 for eligible dependents who aged out of eligibility during the last plan year with a regular enrollment period ending on or before Jan. 31, 2020, and may allow employees with unused balances for that plan year to apply this rule to claims for reimbursement of the unused balance in the following plan year.
• Note: Core Cafeteria Plan principles are in place: cash outs of unused contributions and retroactive election changes are generally unpermitted.
• Note: Permitting carryovers, grace periods, or extended coverage periods under a health FSA may impact HSA eligibility.

GINA

Title two of GINA prohibits employers from requesting genetic information in the workplace and from using such in a discriminatory manner:

• Employers may not ask employees if a family member has tested positive for COVID-19.
• If an employee volunteers family medical information, there is no GINA violation; nonetheless, the employer must be cautious in asking follow-up questions to an inadvertent disclosure.

Health Savings Accounts (HSAs) with High Deductible Health Plans (HDHPs)

• The IRS released Notice 2020-15 permitting HDHPs with HSAs to cover testing for, and treatment of, COVID-19 on a first-dollar basis.
  • An HDHP will not fail to be an HDHP merely because the health plan provides medical care services and items purchased related to the testing and treatment of COVID-19 prior to the satisfaction of the applicable minimum deductible.

• IRS Notice 2020-29 clarified that reimbursement for expenses related to testing and treatment for COVID-19 must incur on or after January 1, 2020.

HIPAA: Privacy & Security

Privacy & Security Rules are still active and in place for Covered Entities (CE)Generally, CE are prohibited from disclosing Protected Health Information (PHI) without a patient’s authorization.. PHI created, received, maintained, or transmitted by the health plan is still protected.

• Health information that is voluntarily disclosed by the patient is not PHI under HIPAA.
• Review HIPAA regulations regarding disclosure exceptions, including public health authorities & government agencies.
• Remember disclosures must be the “minimum necessary” to accomplish the intended purpose.

Check out our latest blogs for HIPAA reminders during COVID-19 and review these questions to get you thinking about HIPAA in a “work-from-home” context.

Short-Term Disability

If employees don’t have enough sick leave to cover days off from work due to mandatory illness or quarantine:

• Prepare a response for a request to use short-term disability.
• Review the plan’s definition of “disability” and consider effects of modification of definitions on the entire workforce.
• Use a consistent approach to reduce the likelihood of decisions seen as “discriminating.”
• Consider optional policy expansion: emergency paid sick leave, work-from-home policies, and employee loan programs.

When do Regulatory Changes Apply?

• “Mandated coverage” provisions of the FFCRA are effective March 18, 2020.
• CARES Act provisions are effective March 27, 2020.
• Notification of Enforcement Discretion by OCR for Business Associates and Telehealth Provisions are effective April 3, 2020.
• Remaining FFCRA provisions are effective April 1, 2020 and sunset December 31, 2020.

Extension of Deadlines

Extension of Notices and Disclosures under Title I of ERISA

EBSA Disaster Relief Notice 2021-01

• Effective March 1, 2021, relief outlined in Notice 2020-01 is to be limited by statute to a period of 1 year from the date the individual action would otherwise have been required or permitted.
• Individuals and plans with timeframes that are subject to the relief under the Notices will have the applicable periods under the Notices disregarded until the earlier of (a) 1 year from the date they were first eligible for relief, or (b) 60 days after the announced end of the National Emergency (May 11, 2023).
• On the applicable date, the timeframes for individuals and plans with periods that were previously disregarded under the Notices will resume.
• In no case will a disregarded period exceed 1 year.
• Deadlines affected:
  • COBRA election (not to be confused with ARPA’s COBRA Subsidy);
  • Payment of COBRA premiums;
  • Election of HIPAA special enrollment;
  • Filing of file claims, appeals, and requests for external review; and
  • Provisions of COBRA election notice (for non-AEI individuals).

Extension of Timeframes for COBRA, HIPAA, and Claims Decisions

Final Rule

• On May 4, 2020, a final rule was published to extend certain timeframes for employee benefit plans participants, and beneficiaries affected by the COVID-19 outbreak. HHS announced it will extend similar relief to non-federal governmental health plans and issued this letter for guidance.
• The rule applies to all plans covered by ERISA and the Internal Revenue Code (the Code) to disregard the following plan deadlines during the “outbreak period” beginning March 1, 2020, and until 60 days after the announced end of the COVID-19 emergency (May 11, 2023):
  • COBRA.
    • The 60-day election period for COBRA continuation coverage;
    • The 14-day deadline to furnish COBRA election notices;
    • The date for making COBRA premium payments; and
    • The date for individuals to notify the plan or a qualifying event or determination of disability.
  • HIPAA Special Enrollment
    • The 30-day and 60-day HIPAA special enrollment periods.
  • Claims Procedures
    • The date for individuals to file claims for benefits;
    • The date within which claimants may file an appeal of an adverse benefit determination under the plan’s claims procedure (typically 180 days for group health plans and disability plans);
    • The date within which claimants may file a request for an external review after receipt of an adverse benefit determination or final internal adverse benefit determination; and
    • The date within which a claimant may file information to perfect a request for external review upon a finding that the request was not complete.

EXPIRED REGULATIONS

Expanded Family and Medical Leave Act (EFMLA) Provisions

• Effective April 1, 2020; EXPIRED
• As of December 31, 2021, an employer is no longer required to provide FFCRA leave, but may do so.
• Be sure to check your state’s FMLA legislation for applicable leave requirements; you may check here.
• FMLA now permits an eligible employee of an employer to take up to 12 weeks of leave if an employee is unable to work (or telework) due to a need for leave to care for a minor child A “minor child” is a son or daughter under 18 years of age of such employee if the school (elementary or secondary) or place of care has been closed, or the child care provider of son or daughter is unavailable, due to a public health emergency.
  • An “eligible employee” now means an employee who has been employed by the employer for at least 30 days.
  • Certain healthcare providers and emergency first responders are excluded from this definition
  • An “employer” now applies to employers with fewer than 500 employees. Employers with fewer than 50 employees are now subject to FMLA for COVID-related absences due to the need to care for family. Schools and public agencies, regardless of size, are considered “employers” under these expanded requirements.
    • See Question 2 for more information on the 500-employee threshold.
  • A “public health emergency” means an emergency with respect to COVID-19 as declared by a federal, state, or local authority.
• The Act exempts small businesses with fewer than 50 employees when it would jeopardize the viability of the business as a going concern, as well as employers with less than 25 employees if certain conditions apply. To elect the same business exemption, you should document why your business with fewer than 50 employees meets the criteria set forth by the Department.
  • See Questions 58 and 59 for more information on the small business exemption.
• If leave is needed under expanded provisions, the employer may provide the first 10 workdays (first 2 workweeks) of leave unpaid, and employees may elect to substitute their accrued vacation leave, personal leave, or medical or sick leave.
  • It’s important to note that both the employer and employee must agree to this substitution.
• After 10 days, employers must compensate employees for the remainder of FMLA leave taken at no less than 2/3 of their regular rate of pay. However, this is subject to per-employee maximums of $200/day and $10,000 in the aggregate.
  • Keep in mind that the only type of family and medical leave that is paid leave is expanded family and medical leave under the EFMLA when such leave exceeds 10 days.
• An employer may require that any paid leave available to an employee under the employer’s policies to allow an employee to care for his or her child or children because of their school or place of care is closed due to a COVID-19 related reason run concurrently with paid expanded family and medical leave under the EFMLA (see Question 86).
• Employers are provided tax credits for this expanded leave (see below).

Emergency Paid Sick Leave

• Effective April 1, 2020; EXPIRED
• As of December 31, 2021, an employer is no longer required to provide FFCRA leave, but may do so.
• Be sure to check your state’s EPSL legislation for applicable leave requirements; you may check here.
• Employers with fewer than 500 employees (and public agencies, regardless of size) must make 80 hours of paid sick leave available for full-time employees who are unable to work or telework.
• Part-time employees are entitled to paid sick leave at their regular rate of pay for the average number of hours that such employees work in a two-week period.
• Employees are eligible for paid sick leave immediately upon hire.
• Department of Labor Paid Leave Requirement Guidelines
• Employees unable to work are eligible for emergency paid sick leave for the following reasons, if an employee:
  1. is subject to a federal, state, or local quarantine or isolation order related to COVID-19;
  2. has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
  3. is experiencing symptoms of COVID-19 and seeking a medical diagnosis;
  4. is caring for an individual who is subject to an order as described in subparagraph (1) or has been advised in paragraph (2);
  5. is caring for a son or daughter of such employee if the school or place of care of the son or daughter has been closed, or the childcare provider of such son or daughter is unavailable, due to COVID-19 precautions; or
  6. is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of Treasury and the Secretary of Labor.

Documentation for Leave Under Either Paid Sick Leave or Expanded Family and Medical Leave

Upon receiving a request for paid sick leave or expanded family and medical leave, an employer must document the following information:

• The names of the employee requesting leave;
• The date(s) for which the leave is requested;
• The reason for leave;
• A statement from the employee that he or she is unable to work because of the reason; and
• If applicable, the name of the government entity that issued the order and name of the health care provider who gave the employee advice to self-quarantine.

If the employee requests leave to care for his or her child whose school or place of care is closed (or child care provider is unavailable), an employee must also document:

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

Employers must document the above regardless of whether they grant or deny a request for leave. For more information, see Question 15. The information employees must give employers to request paid sick leave or expanded family and medical leave can be found at Question 16.

DOL Temporary Rule: Paid Leave under the FFCRA

On April 6, 2020, the DOL published a temporary rule regarding the implementation and administration of emergency paid sick leave provisions and family and medical leave expansion requirements under the FFCRA. For more information on the temporary rule, click here.

Tax Credits

The Act includes tax credit relief for employers required to make these payments in relation to the FMLA expansion and emergency paid sick leave provisions above. Employers are entitled to a refundable tax credit equal to 100% of expanded FMLA wages paid by employers on a quarterly basisThe cap is $200 per day and up to $10,000 per employee.. Click here for the IRS’ FAQ for small-and-midsize businesses. Employers will be entitled to a refundable tax credit equal to 100% of emergency sick-leave wages paid by employers for each calendar quarter:

• $511 per day ($5,110 in the aggregate), if the employee is taking paid sick time to care for themselves under paragraph (1), (2), or (3) above; or
• $200 per day ($2,000 in the aggregate), if the employee is taking time off to care for another under paragraph (4), (5), or (6) above.

For more information on COVID-19 related tax credits for required paid leave provided by small and midsized businesses, see the IRS FAQs.

Flexible Savings Accounts (FSAs)

• For unused amounts remaining in a health FSA or a dependent care assistance program under the § 125 cafeteria plan as of the end of a grace period or plan year ending in 2020, IRS Notice 2020-29 allows employers to amend one or more of its section 125 cafeteria plans to permit employees to apply those unused amounts to pay or reimburse medical care expenses or dependent care expenses, respectively, incurred through December 31, 2020.
• If an employer decides to provide an extended period to apply unused amounts consistent with the Notice, it must adopt a plan amendment on or before December 31, 2021, for the 2020 plan year.

Form 5500 Series and Form M-1

IRS Notice 2020-23 extends the due date for employee benefit plans required to make the Form 5500 series filings due on or after April 1, 2020, and before July 15, 2020. Plans with filing due dates that land within this time frame, including due dates after filing an extension, will now have until July 15, 2020, to submit these filings to the Department of Labor (DOL).

Plan Year End Date	Normal Due DateThe last day of the 7th month after the plan year ends.	Extended Due Date2 ½ month extension through Form 5558 filing with the IRS.
June 30, 2019	January 31, 2020	April 15, 2020
July 31, 2019	February 29, 2020	May 15, 2020
August 31, 2019	March 31, 2020	June 15, 2020
September 30, 2019	April 30, 2020	July 15, 2020
October 31, 2019	May 31, 2020	August 15, 2020
November 30, 2019	June 30, 2020	September 15, 2020

 

According to EBSA Disaster Relief Notice 2020-01, Form M-1 filings required for multiple employer welfare arrangements (MEWAs) and certain entities claiming exception (ECEs) are provided relief for the same period of time as the Form 5500 Annual Return/Report filing relief stated above.

EBSA Disaster Relief Notice 2020-01

• The Department of Labor (DOL) announced the extension of deadlines for furnishing required notices and disclosures to plan participants, beneficiaries, and other persons so that plan fiduciaries and plan sponsors have additional time to meet their obligations under Title I of ERISA during the COVID-19 pandemic.
• An employee benefit plan and responsible plan fiduciary will not be in violation of ERISA for a failure to timely furnish a notice, disclosure, or document that must be furnished between March 1, 2020, and 60 days after the announced end of the COVID-10 National Emergency, as long as the plan and responsible fiduciary act in good faith and furnish the notice, disclosure, or document as soon as administratively practicable under the circumstances.
• Good faith acts include use of electronic alternative means of communicating with plan participations and beneficiaries who the plan fiduciary reasonably believes has effective access to electronic means of communication (e.g., email, text messages, and continuous access websites).
• To help participants, beneficiaries, plan sponsors, and employers impacted by the COVID-19 outbreak better understand their rights and responsibilities under Title I of ERISA, the DOL has posted the following FAQs.

 

Employers should consult advisers and counsel to disseminate the contents of these new rules and determine applicability to the workforce, including the posting of required notices and compliance with the U.S. Centers for Disease Control (CDC)’s guidance on maintaining a healthy work environment. See ComplianceDashboard’s blog post to review a list of resources for employers.