The Washington Report

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May 6, 2020

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

Health/Retirement Guidance

 

Departments Release COVID-19 Relief and Guidance for Employee Benefit Plans
On April 28, 2020, the Department of Labor’s (DOL’s) Employee Benefit Security Administration (EBSA) issued deadline relief and other guidance under Title I of ERISA to help employee benefit plans, plan participants and beneficiaries, employers and other plan sponsors, plan fiduciaries, and other service providers impacted by the coronavirus outbreak. A brief summary of the guidance is listed below:

• Notice – Extension of Certain Timeframes: A Notice, jointly issued with the Departments of Treasury and DOL (the Departments), extends certain time frames affecting participants’ rights to health care coverage, portability, and continuation of group health plan coverage under COBRA, and extends the time for plan participants to file or perfect benefit claims or appeals of denied claims. These extensions provide participants and beneficiaries of employee benefit plans additional time to make important health coverage and other decisions affecting their benefits during the coronavirus outbreak.
• Disaster Relief Notice: EBSA Disaster Relief Notice 2020-01 extends the time for plan officials to furnish benefit statements, annual funding notices, and other notices and disclosures required by ERISA so long as they make a good faith effort to furnish the documents as soon as administratively practicable. The Notice explains that good faith includes the use of electronic alternative means of communicating with plan participants and beneficiaries who the plan fiduciary reasonably believes have effective access to electronic means of communication, including email, text messages, and continuous access websites. The Notice also includes compliance assistance guidance on plan loans, participant contributions and loan payments, blackout notices, Form 5500 and Form M-1 filing relief, and other general compliance guidance on ERISA fiduciary responsibilities.
• Frequently Asked Questions (FAQs): The DOL also issued a set of FAQs (COVID-19 FAQs for Participants and Beneficiaries) on health benefit and retirement benefit issues to help employee benefit plan participants and beneficiaries, plan sponsors, and employers impacted by the coronavirus outbreak understand their rights and responsibilities under ERISA.

For more information, see Agencies Extend Deadlines Due to COVID-19 Outbreak in the Publications section of the newsletter.

Please note that some government websites are experiencing technological issues due to increased traffic. Readers may have to cut and paste the links below to access the information.

A news release is available at:
https://www.dol.gov/newsroom/releases/ebsa/ebsa20200428

The Notice is available at:
https://www.govinfo.gov/content/pkg/FR-2020-05-04/pdf/2020-09399.pdf

 

EBSA Disaster Relief Notice 2020-01 is available at:
https://www.dol.gov/agencies/ebsa/employers-and-advisers/plan-administration-and-compliance/disaster-relief/ebsa-disaster-relief-notice-2020-01

COVID-19 FAQs for Participants and Beneficiaries is available at:
https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/covid-19.pdf

Health

 

DOL Issues COBRA FAQs and Revised Model Notices for Employee Benefit Plans
On May 1, 2020, the Department of Labor (DOL) issued Frequently Asked Questions (FAQs) under COBRA, and released revised COBRA model notices. Plan administrators can use these model notices to notify plan participants and beneficiaries of their rights under COBRA and qualified beneficiaries of their rights to elect COBRA.

In general, COBRA allows employees (and their families) who would otherwise lose their group health coverage due to certain life events to continue their same group health coverage. These events include termination or reduction in hours, death of a covered employee, divorce or legal separation, Medicare entitlement, and loss of dependent status. COBRA generally lasts for 18 months but, in some cases, can last up to 36 months. Under COBRA, group health plans must also provide covered employees and their families with certain notices explaining their COBRA rights. The revised model notices provide additional information to address COBRA’s interaction with Medicare. The model notices explain that there may be advantages to enrolling in Medicare before, or instead of, electing COBRA. It also highlights that if an individual is eligible for both COBRA and Medicare, electing COBRA coverage may impact enrollment into Medicare as well as certain out-of-pocket costs. According to the DOL, “these documents will provide important information to COBRA-eligible individuals as they make health care choices for themselves and their families while assisting employers that must comply with the notice requirements under COBRA.”

Please note that some government websites are experiencing technological issues due to increased traffic. Readers may have to cut and paste the links below to access the information.

The news release is available at: https://www.dol.gov/newsroom/releases/ebsa/ebsa20200501

The FAQs are available at:
https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/cobra-model-notices.pdf

The revised COBRA model notices are available at:
https://www.dol.gov/agencies/ebsa/laws-and-regulations/laws/cobra

Retirement

 

IRS Publishes Q&As on COVID-19 Relief for Retirement Plans
On May 4, 2020, the Internal Revenue Service (IRS) provided a list of questions and answers (Q&As) on COVID-19 relief for retirement plans and individual retirement accounts (IRAs) as provided by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The IRS and Treasury intend to issue additional guidance in the future, and referred to IRS Notice 2005-92 in the meantime for principles they expect to apply to the coronavirus-related distributions and loans provided by the Act. The Q&As list the following 14 questions:

1. What are the special rules for retirement plans and IRAs in Section 2202 of the CARES Act?
2. Does the IRS intend to issue guidance on Section 2202 of the CARES Act?
3. Am I a qualified individual for purposes of Section 2202 of the CARES Act?
4. What is a coronavirus-related distribution?
5. Do I have to pay the 10% additional tax on a coronavirus-related distribution from my retirement plan or IRA?
6. When do I have to pay taxes on coronavirus-related distributions?
7. May I repay a coronavirus-related distribution?
8. What plan loan relief is provided under Section 2202 of the CARES Act?
9. Is it optional for employers to adopt the distribution and loan rules of Section 2202 of the CARES Act?
10. Does Section 2202 of the CARES Act provide additional distribution rights to participants or otherwise change the rules applicable to plan distributions?
11. May an administrator rely on an individual's certification that the individual is eligible to receive a coronavirus-related distribution?
12. Is an eligible retirement plan required to accept repayment of a participant's coronavirus-related distribution?
13. How do qualified individuals report coronavirus-related distributions?
14. How do plans and IRAs report coronavirus-related distributions?

The IRS Q&As are available here.

Other HR/Employment

 

IRS Updates FAQs on Employee Retention Credit
On April 30, 2020, the Internal Revenue Service (IRS) updated its Frequently Asked Questions (FAQs) on the Employee Retention Credit under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The Employee Retention Credit encourages businesses to keep employees on their payroll. The refundable tax credit is 50% of up to $10,000 in wages paid by an eligible employer whose business has been financially impacted by COVID-19. Please refer to the FAQs for the latest information.

The updated FAQs on the Employee Retention Credit are available here.

DOL Publishes 11 New Translations of OSHA Poster Preventing COVID-19 Exposure
On May 4, 2020, the Department of Labor’s (DOL’s) Occupational Safety and Health Administration (OSHA) announced it has translated and published its “Ten Steps All Workplaces Can Take to Reduce Risk of Exposure to Coronavirus” poster in 11 additional languages. Currently available in English and Spanish, the poster highlights 10 infection prevention measures every employer should implement to protect workers’ safety and health during the coronavirus pandemic. Safety measures include encouraging sick workers to stay home; establishing flexible worksites and staggered work shifts; discouraging workers from using other workers’ phones, desks and other work equipment; and using Environmental Protection Agency-approved cleaning chemicals from List N or that have label claims against the coronavirus.

Please note that some government websites are experiencing technological issues due to increased traffic. Readers may have to cut and paste the links below to access the information.

The OSHA news release and posters (available for download) are available at:
https://www.dol.gov/newsroom/releases/osha/osha20200504

Aon Publications

 

Agencies Extend Deadlines Due to COVID-19 Outbreak
The Department of Labor and the Internal Revenue Service have extended almost a dozen deadlines for distributing notices, filing claims, making payments, and certain other actions under COBRA, HIPAA, ERISA, and the Internal Revenue Code. The relief affects most employer-sponsored health and welfare plans.

The Aon bulletin is available here.

Risky Business: SCOTUS Says U.S. Owes Insurers $12 Billion Under ACA’s Risk Corridor Program
The U.S. Supreme Court (SCOTUS) held in Maine Community Health Options v. United States that the federal government owes more than $12 billion to insurers under the Affordable Care Act’s (ACA’s) “Risk Corridor” program.

The Aon bulletin is available here.