The Washington Report
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March 17, 2021
Note to subscribers: Due to the current environment, information is changing at a rapid rate. While we do our best to provide timely updates, it is possible that the information shared in the newsletter may change or be revised after our publication deadline. Stay healthy and safe! ~The Washington Report team
Executive
President Signs American Rescue Plan Into Law
On March 11, 2021, President Biden signed into law the American Rescue Plan Act of 2021 (ARP). The $1.9 trillion COVID-19 bill will provide additional relief to address the continued impact of the pandemic on the economy, public health, state and local governments, individuals, and businesses. Among other provisions, the bill will provide funding for COVID-19 vaccinations, testing, treatment, and prevention; small business assistance; and mental health and substance-use disorder services. A maximum recovery rebate of $1,400 per eligible individual will be provided, as well as $300 a week in unemployment assistance through September 6, 2021. Also included is pension funding relief for both single-employer and multiemployer plans, additional relief for various federal health care programs (including the Affordable Care Act), and a six-month provision that will have the federal government covering COBRA health insurance premiums.
For more information, please see the Aon bulletin titled RESCUE 4-1-1: Employer Health and Welfare Provisions in the American Rescue Plan in the Publications section of this newsletter.
The full text of the ARP is available here.
Health
HHS, CMS Release Fact Sheets on ARP
President Biden signed the American Rescue Plan Act of 2021 (ARP) into law on March 11, 2021. In response, both the Department of Health and Human Services (HHS) and the Centers for Medicare and Medicaid Services (CMS) released separate Fact Sheets on the new legislation on March 12. Among other items, the Fact Sheets address health care costs, access, and the Marketplace. Please refer to the Fact Sheets for specific details.
The HHS Fact Sheet: The American Rescue Plan: Reduces Health Care Costs, Expands Access to Insurance Coverage and Addresses Health Care Disparities is available here.
The CMS Fact Sheet: American Rescue Plan and the Marketplace is available here.
OCR, HHS Extend Comment Period for Proposed Modifications to HIPAA Privacy Rule
On March 9, 2021, the Office for Civil Rights (OCR) at the HHS announced a 45-day extension of the public comment period for the Notice of Proposed Rulemaking (NPRM) to modify the HIPAA Privacy Rule. The OCR first released the NPRM to the public on the HHS website on December 10, 2020, and it was published in the Federal Register on January 21, 2021. The 45-day extension moves the current deadline for the public to submit comments from March 22, 2021, to May 6, 2021.
The news release is available here.
The notice of extension is available here.
The NPRM (published January 21, 2021) is available here.
Retirement
DOL Releases Enforcement Policy Statement of Its Final Rules on ESG Investments, Proxy Voting by Employee Benefit Plans
On March 10, 2021, the Department of Labor’s (DOL’s) Employee Benefits Security Administration (EBSA) announced that it will not enforce recently published final rules on “Financial Factors in Selecting Plan Investments” (published November 13, 2020) and “Fiduciary Duties Regarding Proxy Voting and Shareholder Rights” (published December 16, 2020). The final rule on “Financial Factors in Selecting Plan Investments” adopted amendments to the “Investment Duties” regulation under Title I of ERISA. The amendments generally require plan fiduciaries to select investments and investment courses of action based solely on consideration of “pecuniary factors.” The final rule on “Fiduciary Duties Regarding Proxy Voting and Shareholder Rights” also adopted amendments to the Investment Duties regulation to address obligations of plan fiduciaries under ERISA when voting proxies and exercising other shareholder rights in connection with plan investments in shares of stock.
Until the publication of further guidance, the DOL will not enforce either final rule or otherwise pursue enforcement actions against any plan fiduciary based on a failure to comply with those final rules with respect to an investment, including a Qualified Default Investment Alternative, or investment course of action, or with respect to an exercise of shareholder rights. The DOL will update the EBSA’s website as more information becomes available.
The news release is available here.
The March 2021 Enforcement Policy Statement is available here.
The “Financial Factors in Selecting Plan Investments” final rule (November 2020) is available here.
The “Fiduciary Duties Regarding Proxy Voting and Shareholder Rights” final rule (December 2020) is available here.
Other HR/Employment
OSHA Launches National Emphasis Program to Protect High-Risk Employees from COVID-19; Updates Interim Enforcement Response Plan
On March 12, 2021, the Department of Labor’s Occupational Safety and Health Administration (OSHA) launched a National Emphasis Program focusing enforcement efforts on companies that put the largest number of employees at serious risk of contracting COVID-19. The program also prioritizes employers that retaliate against workers for complaints about unsafe or unhealthy conditions, or for exercising other rights protected by federal law.
In a related action, OSHA also updated its Interim Enforcement Response Plan to prioritize the use of on-site workplace inspections where practical, or a combination of on-site and remote methods. OSHA will only use remote-only inspections if the agency determines that on-site inspections cannot be performed safely. On March 18, 2021, OSHA will rescind the May 26, 2020, memorandum on this topic and this new guidance will go into and remain in effect until further notice.
The news release is available here.
Information on the National Emphasis Program is available here.
The updated Interim Enforcement Response Plan is available here.
DOL Announces Two Proposed Rules to Rescind Final Rules Previously Released Related to Unfair Pay Practices
On March 11, 2021, the Department of Labor (DOL) announced proposed rules to rescind two final rules that would “significantly weaken protections afforded to American workers under the Fair Labor Standards Act (FLSA).” The first rule proposes the withdrawal of the Independent Contractor Final Rule issued by the DOL on January 7, 2021, for several reasons, including the following:
- The rule adopted a new “economic reality” test to determine whether a worker is an employee or an independent contractor under the FLSA.
- Courts and the department have not used the new economic reality test, and FLSA text or longstanding case law does not support the test.
- The rule would narrow or minimize other factors considered by courts traditionally, making the economic test less likely to establish that a worker is an employee under the FLSA.
Among its provisions, the FLSA requires covered employers to pay employees at least the federal minimum wage for every hour worked and overtime premium pay of at least one and one-half times their regular rate of pay for every hour worked over 40 in a workweek. An independent contractor has no FLSA protections.
The second proposed rule seeks to rescind a current regulation on joint employer relationships under the FLSA, published in the Federal Register and which took effect on March 16, 2020. In February 2020, 17 states and the District of Columbia filed a lawsuit in the U.S. District Court for the Southern District of New York against the DOL, arguing that the Joint Employer Rule violated the Administrative Procedure Act. The court vacated the majority of the Joint Employer Rule on September 8, 2020, stating that the rule was contrary to the FLSA and was “arbitrary and capricious” due to its failure to explain why the DOL had deviated from all prior guidance or consider the effect of the rule on workers.
Comments on both proposed rules are due by April 12, 2021.
The news release is available here.
The proposed rule on the withdrawal of the Independent Contractor Final Rule is available here.
The proposed rule that seeks to rescind the current regulation on joint employer relationships is available here.
Aon Publications
RESCUE 4-1-1: Employer Health and Welfare Provisions in the American Rescue Plan
The American Rescue Plan, signed into law by President Biden on March 11, 2021, includes several provisions related to employer health and welfare plans, including:
- COBRA subsidies for employer-provided coverage;
- Increase in subsidies for individuals who purchase coverage in the Exchange marketplace; and
- Increase in the employer exclusion for dependent care assistance programs.
The Aon bulletin, which contains more information on each of these provisions, is available here.