Is Your Group Health Plan Up-to-Date? COVID-19 and Other Plan Design Decisions for HR and Benefits

HHS, DOL, and IRS have issued a number of regulations and guidance documents that update and create new plan design choices for employers.

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In recent weeks, the Department of Health and Human Services (HHS), Department of Labor (DOL), and Internal Revenue Service (IRS) have issued a number of regulations and guidance documents that update and create new plan design choices for employers. These choices span a wide range of topics, including COBRA, ERISA, and COVID-19. We provide an overview of the guidance most relevant to large employers’ health and welfare benefits below.


Topic
Summary & Next Steps
 Effective Dates

Group Health Plan Enrollment Options

Summary

  • Employers have the option of amending cafeteria plans to permit prospective mid-year group health plan enrollment changes such as new enrollment, change in plan option, or declining coverage
  • To prospectively decline coverage, employees must attest in writing that they plan to enroll in other comprehensive health coverage. Sample attestation language is available.
  • More details available in IRS Notice 2020-29

Next Steps

  • Decide whether group health plan(s) should allow these enrollment changes (or some portion of them)
  • Work with TPAs/carriers to implement enrollment changes, if any
  • Communicate plan changes to eligible employees
  • Amend cafeteria and other plan documents accordingly by 12/31/2021

1/1/2020 – 12/31/2020

HIPAA Special Enrollment Extension

Summary

  • The usual 30-day deadline for employees to request group health plan enrollment after a special enrollment event (birth, marriage, loss of coverage, etc.) is suspended
  • Details available in guidance

Next Steps

  • Evaluate current special enrollment procedures to determine what changes are needed
  • Work with TPAs/vendors to implement special enrollment changes (including retroactive enrollments), as needed
  • Communicate changes to employees, as needed
  • Document changes to special enrollment procedures

Emergency ends (2/28/2021 at latest)

Health FSA

Summary

  • Employers have the option of amending cafeteria plans to permit prospective mid-year health FSA election changes such as new election, increase/decrease in contribution amount, or declining coverage
  • Employers can limit mid-year election changes so that health FSA balances cover amounts already reimbursed
  • For grace periods or plan years ending in 2020, employers have the option of allowing unused health FSA balances to reimburse expenses incurred through 12/31/2020
  • Employers have the option of increasing the maximum health FSA carryover to 20% of the maximum salary reduction contribution ($550 for 2020)
  • More details available in IRS Notice 2020-29 and IRS Notice 2020-33

Next Steps

  • Decide whether health FSAs should allow these enrollment, claims period, and carryover changes (or some portion of them)
  • Work with TPAs/vendors to implement enrollment changes, if any
  • Communicate plan changes to eligible employees
  • Amend cafeteria and other plan documents accordingly by 12/31/2021

1/1/2020 – 12/31/2020

 

 

 

 

Note: Health FSA carryover increase is permanent and will update every year

Dependent Care Assistance Program

Summary

  • Employers have the option of amending cafeteria plans to permit prospective mid-year DCAP election changes such as new election, increase/decrease in contribution amount, or declining coverage
  • For grace periods or plan years ending in 2020, employers can allow unused DCAP balances to reimburse expenses incurred through 12/31/2020
  • More details available in IRS Notice 2020-29

Next Steps

  • Decide whether DCAPs should allow these enrollment and claims period changes (or some portion of them)
  • Work with TPAs/vendors to implement enrollment changes, if any
  • Communicate plan changes to eligible employees
  • Amend cafeteria and other plan documents accordingly by 12/31/2021

1/1/2020 – 12/31/2020

COBRA Extensions

Summary

  • The usual 60-day deadline for employees to notify employers of COBRA qualifying events (divorce, end of dependent status, disability, etc.) is suspended
  • The usual 14-day deadline for employers to send COBRA election notices is suspended
  • The usual 60-day deadline for employees to elect COBRA is suspended
  • 45 and 30-day deadlines for employees to pay COBRA premiums are suspended
  • Details available in guidance

Next Steps

  • Evaluate current COBRA procedures to determine what changes are needed
  • Work with TPAs/vendors to implement changes, including retroactive enrollments and new premium collection procedures, as needed
  • Communicate COBRA changes to employees, as needed
  • Document changes to COBRA procedures

3/1/2020 – 60 days after COVID-19 National Emergency ends (2/28/2021 at latest)

Claims Procedure Extensions

Summary

  • The usual plan deadlines for filing claims are suspended
  • The usual 60-day deadline for employees to file other welfare claims is suspended
  • The usual 4-month deadline for employees to file requests for external review is suspended
  • Details available in guidance

Next Steps

  • Evaluate current claims/external review procedures to determine what changes are needed
  • The usual 180-day deadline for employees to file health claim appeals (including medical, health FSA, and HRA claims) is suspended
  • Work with TPAs/independent review organizations/vendors to implement changes, including review of past claim/appeal denials, as needed
  • Communicate procedure changes to employees, as needed
  • Document changes to claims/external review procedures

3/1/2020 – 60 days after COVID-19 National Emergency ends (2/28/2021 at latest)

ERISA Notice Extensions

Summary

  • SPDs, SMMs, claim extensions, claims denials, responses to requests for plan documents (and other ERISA-required notices) can be provided “as soon as administratively practicable under the circumstances”
  • Electronic delivery allowed (email, text, website) if employer reasonably believes participants have effective access
  • Details available in EBSA Disaster Relief Notice 2020-01

Next Steps

  • Evaluate current notice/disclosure procedures to determine if changes are desirable
  • Work with TPAs/vendors to implement changes, if any
  • Communicate plan changes to employees, as needed
  • Document changes to notice/disclosure procedures

3/1/2020 – 60 days after COVID-19 National Emergency ends (2/28/2021 at latest)

COVID-19 Testing

Summary


3/18/2020 – 6/16/2020 (unless extended)

Telehealth

Summary

  • HSAs paired with HDHPs can (but are not required to) cover all telehealth and other remote care services before participants satisfy deductibles
  • This safe harbor can apply retroactively to services provided 1/1/2020 and after (see IRS Notice 2020-29).

Next Steps

  • Work with TPAs/carriers to determine how copays, deductibles, or other cost-sharing will apply to telehealth
  • Amend plan documents and other disclosures, if needed
  • Determine how to communicate plan changes, if any, to participants

1/1/2020 through plan years beginning on or before 12/31/2021

OTC Medications

Summary

  • HSAs, HRAs, and health FSAs can (but are not required to) reimburse costs of over-the-counter drugs without a prescription

Next Steps

  • Work with TPAs/carriers to determine if and how HSA/HRA/FSA reimbursement of OTC medications will work
  • Amend plan documents and other disclosures, if needed
  • Determine how to communicate plan changes, if any, to participants

Expenses incurred after 12/31/2019

Menstrual Care Products

Summary

  • HSAs, HRAs, and health FSAs can (but are not required to) reimburse costs of menstrual care products without a prescription

Next Steps

  • Work with TPAs/carriers to determine if and how HSA/HRA/FSA reimbursement of menstrual care products will work
  • Amend plan documents and other disclosures, if needed
  • Determine how to communicate plan changes, if any, to participants

Expenses incurred after 12/31/2019

Paid Leave

Summary

  • Families First Act included Emergency Paid Sick Leave and Emergency Family and Medical Leave Expansion for employers with fewer than 500 employees
  • CARES Act clarifies dollar limits for both types of leave and extends Emergency Family and Medical Leave Expansion to certain employees who were laid off and rehired
  • Families First Act allows employers a refundable tax credit to offset costs of new leave requirements
  • CARES Act provides for advance of payroll tax credit
  • DOL guidance available
  • IRS guidance available

Next Steps

  • Work with payroll and legal departments to determine whether new FMLA, paid sick leave, and payroll tax credit provisions apply to any portion of your company
  • Amend plan documents and other disclosures, if needed
  • Determine how to communicate leave benefit changes, if any, to participants

4/1/2020 – 12/31/2020

Educational Assistance Programs

Summary

  • Employers’ educational assistance programs can now include, on a tax-advantaged basis, payments toward employees’ student loans
  • Total educational assistance program benefits remain capped at $5,250 per year

Next Steps

  • Determine if educational assistance program should include student loan contributions
  • Amend plan documents and other disclosures, if needed
  • Determine how to communicate changes, if any, to employees

3/27/2020 – 12/31/2020

Future Vaccine Coverage

Summary

  • CARES Act requires all plans to cover COVID-19 preventive services without cost-sharing
  • Includes immunizations, items, or services recommended by USPSTF or ACIP

Next Steps

  • Watch for USPSTF or ACIP updates
  • Discuss future implementation with TPAs/carriers

15 business days after recommendation by USPSTF or ACIP

What happens next?

HHS, DOL, and IRS will continue to issue guidance. The Business Group will provide updates as this guidance becomes available.

Upcoming Webinar

The Business Group will host a webinar on Wednesday May 20, 2020 during which we will discuss these and other regulatory, compliance, and COVID-19 developments for employer-sponsored plans. Members can register here.

Additional Resources

Do you have questions related to COVID-19? Please contact us.

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