Human Resources

This is the Human Resources category of the Broad REach Benefits blog. At Broad Reach Benefits, we focus on employers that have between 30 and 500 benefit eligible employees. We’re employee benefit specialists, not a big box brokerage firm or payroll company with a sales force peddling policies.

Congress Passes the American Rescue Plan Act

Congress has passed, and President Biden has signed, the American Rescue Plan Act, 2021 (ARPA), the third COVID-19 stimulus bill.  This new $1.9 trillion stimulus package includes several health and welfare benefits-related provisions relevant to employers and plan sponsors, as summarized below.

FFCRA Paid Leave Extended and Enhanced

While COVID-19 vaccines are starting to become more readily available, the pandemic continues. In recognition, Congress extended through September 30, 2021, the refundable payroll tax credits for emergency paid sick leave (EPSL) and extended family and medical leave (E-FMLA), which were enacted pursuant to the Families First Coronavirus Response Act.  As with the extension through March 31, 2021 under the second stimulus package (the Consolidated Appropriations Act, 2021), only the tax credits are extended, which means compliance with the EPSL or E-FMLA requirements is voluntary for employers after December 31, 2020.

The ARPA expands FFCRA leave in several ways for employers who choose to offer it from April 1, 2021 through September 30, 2021:

  • The 10-day limit for EPSL resets as of April 1, 2021. Employees were previously limited to 80 hours from April 1, 2020 through March 31, 2021.
    • Paid leave continues to be limited to $511 per day ($5,110 total) for an employee’s own illness or quarantine (paid at the employee’s regular rate), and $200 per day ($2,000 total) for leave to care for others (paid at two-thirds of the employee’s regular rate).
  • A new “trigger” is added under both the EPSL and E-FMLA provisions. Employees qualify for leave if they are:
    • seeking or awaiting the results of a diagnostic test for, or a medical diagnosis of, COVID-19, and the employee has been exposed to COVID–19 or the employee’s employer has requested such test or diagnosis;
    • obtaining …
By |March 14th, 2021|Compliance, Employee Communications, Human Resources, Legislation, Medical, U.S. Department of Labor|Comments Off on Congress Passes the American Rescue Plan Act

IRS Provides Guidance on FSA Relief Authorized in the Consolidated Appropriations Act, Grants Other Cafeteria Plan Relief

We are just weeks shy of the one-year anniversary of the President’s declaration of the COVID-19 National Emergency, and the COVID-19 National and Public Health Emergencies are still in effect.  As a result of the long-term impact of the pandemic, many employees faced forfeiting their unused health FSA and dependent care assistance program (DCAP) funds at the end of the 2020 plan year.

As a result, and as we previously reported, a second stimulus relief bill (the Consolidated Appropriated Act, 2021) was signed into law on December 27, 2020, which provided much-needed relief for health FSAs and DCAPs.  On February 18, 2021, the IRS released Notice 2021-15, which provides additional guidance related to the relief in the stimulus bill as well as further relief for cafeteria plans and HRAs.  The guidance and relief are summarized in more detail below.

IRS Guidance Related to the Second Stimulus Bill (CAA, 2021)

Health FSA and DCAP Carryovers – The stimulus bill authorized employers offering a DCAP or health FSA to allow participants to carry over all unused DCAP and health FSA contributions or benefits remaining at the end of the 2020 plan year to the 2021 plan year.  Notice 2021-15 clarifies that:

  • Employers may require employees to make an election in the 2021 or 2022 plan year to access the carryover from the previous plan year.
  • The carryover relief applies to all health FSAs, including limited purpose health FSAs.
  • If an employee uses the mid-year election change relief discussed elsewhere in this alert to prospectively elect to participate in the health FSA mid-year, the employee can access the full amount of their carryover from 2020 retroactive to January 1, 2021.
  • Employers can restrict the amount employees can carryover, i.e., they …
By |March 9th, 2021|Compliance, Employee Benefits, Employee Benefits Adviser, Employee Communications, Health Care Reform, Human Resources, IRS, Medical|Comments Off on IRS Provides Guidance on FSA Relief Authorized in the Consolidated Appropriations Act, Grants Other Cafeteria Plan Relief

How Many Years Is A One Year Extension? DOL Clarifies its Disaster Relief Guidance

The Department of Labor (DOL) has released Notice 2021-01, which clarifies the end date for the relief provided in April 2020 under Notice 2020-01. Per the latest guidance, individuals (and plans) are granted relief based on their own fact-specific timeframes and, therefore, may still take advantage of the relief beyond February 28, 2021 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 COVID-19 National Emergency.

As background, in April 2020 the DOL announced that certain deadlines under ERISA were suspended starting March 1, 2020 until 60 days after the announced end of the COVID-19 National Emergency or such other date determined by the agencies (the “Outbreak Period”). The following deadlines applicable to participants and beneficiaries are tolled (paused) during the Outbreak Period:

  • The 30-day period (or 60-day period, if applicable) to request a HIPAA special enrollment;
  • The 60-day period for electing COBRA continuation coverage;
  • The date/deadline for making COBRA premium payments;
  • The deadline for individuals to notify the plan of a COBRA qualifying event or determination of disability;
  • The deadline within which employees can file a benefit claim, or a claimant can appeal an adverse benefit determination, under the group health plan or disability plan claims procedures described in the plan;
  • The deadline for claimants to file a request for an external review after receipt of an adverse benefit determination or final internal adverse benefit determination; and
  • The deadline for a claimant to file information to perfect a request for external review upon finding that the request was not complete.

Certain deadlines impacting employers/plan sponsors were also extended, such as the deadline to provide a COBRA election notice, …

By |March 1st, 2021|Broad Reach Benefits, Compliance, Employee Benefits, Human Resources, Legislation, Medical, Private Health Care Exchange, U.S. Department of Labor|Comments Off on How Many Years Is A One Year Extension? DOL Clarifies its Disaster Relief Guidance

EEOC Issues Notice of Proposed Rulemaking Related to Wellness Programs

Since 2019, employers faced uncertainty regarding the status of wellness program incentives under the ADA and GINA. On January 7, 2021, the EEOC issued a Notice of Proposed Rulemaking on Wellness Programs Under the ADA and GINA that addresses this issue. The proposed rules deviate somewhat from prior EEOC guidance and positions.

Specifically, the proposed rules apply the ADA’s insurance “safe harbor” to health contingent wellness programs offered as part of, or qualified as, an employer-sponsored group health plan, thereby segregating them from health contingent wellness programs offered to all employees, regardless of their participation in the employer’s health plan.  Instead, the latter are lumped in with non-health contingent wellness programs (i.e., wellness programs that involve a disability-related inquiry or medical exam but are not activity-based or outcome-based) and subject to the ADA wellness rules.

Consistent with the EEOC’s announcement in the summer of 2020, the proposed rules require any incentives provided for participatory wellness programs and/or wellness programs not offered as part of a group health plan to be “de minimis.”  If the rules are finalized as proposed, employers may no longer rely upon the 30% (or 50% for smoking cessation) limit on incentives for these types of programs.

Finally, the proposed rules amend the GINA regulations by, among other things, limiting wellness program incentives for employees who complete health risk assessments that contain information about their spouse or dependents’ family medical history or other genetic information to a similar de minimis amount.

The proposed rules are described in more detail below.

Background

As background, under the ADA, wellness programs that involve a disability-related inquiry or a medical examination must be “voluntary.”  Similar requirements exist under GINA when there are requests for an employee’s family medical history (typically …

By |January 21st, 2021|Employee Benefits, Human Resources, Legislation, Medical, Voluntary Benefits, Wellness|Comments Off on EEOC Issues Notice of Proposed Rulemaking Related to Wellness Programs

Congress Passes a Second COVID-19-Related Stimulus Package

After weeks of negotiations, Congress overwhelmingly passed a second COVID-19 stimulus package – the COVID-Related Tax Relief Act of 2020 (COVIDTRA) and the Taxpayer Certainty and Disaster Tax Relief Act of 2020 (TCDTR), both part of the Consolidated Appropriations Act, 2021 (CAA, 2021).  President Trump signed the bill into law on December 27, 2020.  The new stimulus package includes several employee benefits-related provisions relevant to health and welfare plans, as summarized below.  A provision on surprise medical billing (effective for plan years beginning in 2022) will be the subject of a future client alert.

FFCRA Paid Leave

As the COVID-19 pandemic continues and the vaccine is unlikely to be available on a wide-scale basis in the next several months, the refundable payroll tax credits for emergency paid sick leave (EPSL) and extended family and medical leave (E-FMLA), which were enacted pursuant to the Families First Coronavirus Response Act, are extended through March 31, 2021.  Notably, only the tax credits are extended, which means compliance with the EPSL or E-FMLA requirements is voluntary for employers after December 31, 2020.

The policy behind this may have been to incentivize employers to continue allowing employees in the middle of FFCRA leave as of January 1, 2021 to finish out, and be paid for, any remaining leave to which they would have otherwise been entitled.  The tax credit is only available for leave that would otherwise satisfy the FFCRA, had it remained in effect, i.e., if employees for whom the employer provides paid leave would otherwise meet the eligibility requirements under the FFCRA and did not use the full amount of EPSL or E-FMLA leave between April 1, 2020 and December 31, 2020.

Relief for Health Care and Dependent Care Flexible Spending …

By |December 28th, 2020|Employee Benefits, Employee Communications, Human Resources, Legislation, Wellness|Comments Off on Congress Passes a Second COVID-19-Related Stimulus Package

IRS Maintains Health FSA Contribution Limit for 2021, Adjusts Other Benefit Limits

On October 26, 2020, the Internal Revenue Service (IRS) released Revenue Procedure 2020-45, which maintains the health flexible spending account (FSA) salary reduction contribution limit from 2020, which is $2,750, for plan years beginning in 2021. Thus, for health FSAs with a carryover feature, the maximum carryover amount is $550 (20% of the $2,750 salary reduction limit) for plan years beginning or ending in 2021. The Revenue Procedure also contains the cost-of-living adjustments that apply to dollar limitations in certain sections of the Internal Revenue Code.

Qualified Commuter Parking and Mass Transit Pass Monthly Limit

For 2021, the monthly limits for qualified parking and mass transit are $270 each (which remain the same from 2020).

Adoption Assistance Tax Credit Increase

For 2021, the credit allowed for adoption of a child is $14,440 (up $100 from 2020). The credit begins to phase out for taxpayers with modified adjusted gross income in excess of $216,660 (up $2,140 from 2020) and is completely phased out for taxpayers with modified adjusted gross income of $256,660 or more (up $2,140 from 2020).

Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) Increase

For 2021, reimbursements under a QSEHRA cannot exceed $5,300 (single) / $10,700 (family), an increase of $50 (single) / $100 (family) from 2020.

Reminder: 2021 HSA Contribution Limits and HDHP Deductible and Out-of-Pocket Limits

Earlier this year, the IRS announced the inflation adjusted amounts for HSAs and high deductible health plans (HDHPs).

 

  2021 (single/family) 2020 (single/family)
Annual HSA Contribution Limit $3,600 / $7,200 $3,550 / $7,100
Minimum Annual HDHP Deductible $1,400 / $2,800 $1,400 / $2,800
Maximum Out-of-Pocket for HDHP $7,000 / $14,000 $6,900 / $13,800

The ACA’s out-of-pocket limits for in-network essential health benefits have also increased for 2021.  Note that all non-grandfathered group health …

By |October 28th, 2020|Compliance, Employee Communications, Human Resources, IRS, Medical|Comments Off on IRS Maintains Health FSA Contribution Limit for 2021, Adjusts Other Benefit Limits

IRS Extends Deadline for Furnishing Form 1095-C to Employees, Extends Good-Faith Transition Relief for the Final Time

The Internal Revenue Service (IRS) has released Notice 2020-76, which extends the deadline for furnishing 2020 Forms 1095-B and 1095-C to individuals from January 31, 2021 to March 2, 2021.  The Notice also provides penalty relief for good-faith reporting errors and suspends the requirement to issue Form 1095-B to individuals, under certain conditions.

The due date for filing the forms with the IRS was not extended and remains March 1, 2021 (March 31, 2021 if filed electronically).

The regulations allow employers to request a 30-day extension to furnish statements to individuals by sending a letter to the IRS with certain information, including the reason for delay; however, because the Notice’s extension of time to furnish the forms is as generous as the 30-day extension contained in the instructions, the IRS will not formally respond to requests for an extension of time to furnish 2020 forms to individuals.  Employers may obtain an automatic 30-day extension for filing with the IRS by filing Form 8809 on or before the due date. An additional 30-day extension is available under certain hardship conditions. The Notice encourages employers who cannot meet the extended due dates to furnish and file as soon as possible and advises that the IRS will take such furnishing and filing into consideration when considering whether to abate penalties for reasonable cause.

Relief from Furnishing Form 1095-B to Individuals

Due to the individual mandate penalty being reduced to zero starting in 2019, an individual does not need the information on Form 1095-B in order to complete his or her federal tax return. Therefore, the IRS is granting penalty relief for employers who fail to furnish a Form 1095-B to individuals, provided that the reporting entity:

  • Posts a notice prominently …
By |October 7th, 2020|Compliance, Employee Benefits, Employee Benefits Adviser, Employee Communications, Human Resources, IRS, Legislation, Medical|Comments Off on IRS Extends Deadline for Furnishing Form 1095-C to Employees, Extends Good-Faith Transition Relief for the Final Time

IRS Releases 2021 HSA Contribution Limits and HDHP Deductible and Out-of-Pocket Limits

In Rev. Proc. 2020-32, the IRS released the inflation adjusted amounts for 2020 relevant to HSAs and high deductible health plans (HDHPs).  The table below summarizes those adjustments and other applicable limits.

  2021 2020 Change
Annual HSA Contribution Limit

(employer and employee)

Self-only: $3,600 Family: $7,200 Self-only: $3,550 Family: $7,100 Self-only: +$50 Family: +$100
HSA catch-up contributions

(age 55 or older)

$1,000 $1,000 No change
Minimum Annual HDHP Deductible Self-only: $1,400 Family: $2,800 Self-only: $1,400 Family: $2,800 No change
Maximum Out-of-Pocket for HDHP

(deductibles, co-payment & other amounts except premiums)

Self-only: $7,000 Family: $14,000 Self-only: $6,900 Family: $13,800 Self-only: +$100 Family: +$200

Out-of-Pocket Limits Applicable to Non-Grandfathered Plans

The ACA’s out-of-pocket limits for in-network essential health benefits have also been announced and have increased for 2021.

  2021 2020 Change
ACA Maximum Out-of-Pocket Self-only: $8,550

Family: $17,100

Self-only: $8,150

Family: $16,300

Self-only: +$400

Family: +$800

Note that all non-grandfathered group health plans must contain an embedded individual out-of-pocket limit within family coverage, if the family out-of-pocket limit is above $8,550 (2021 plan years) or $8,150 (2020 plan years). Exceptions to the ACA’s out-of-pocket limit rule are available for certain small group plans eligible for transition relief (referred to as “Grandmothered” plans).  A one-year extension of transition relief was announced on January 31, extending the transition relief to policy years beginning on or before October 1, 2021, provided that all policies end by December 31, 2022. (This transition relief has been extended each year since the initial announcement on November 14, 2013.)

Next Steps for Employers

As employers prepare for the 2021 plan year, they should keep in mind the following rules and ensure that any plan materials and participant communications reflect the new limits:

  • HDHPs cannot have an embedded family …
By |May 29th, 2020|Employee Benefits, Employee Benefits Adviser, Employee Communications, Human Resources, IRS, Legislation, Medical|Comments Off on IRS Releases 2021 HSA Contribution Limits and HDHP Deductible and Out-of-Pocket Limits

Congress passes the Coronavirus Aid, Relief, and Economic Security Act (CARES Act)

On March 27, the President signed into law the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The CARES Act comes as a continued response to the Coronavirus 2019 (COVID-19) pandemic that is significantly impacting the United States. The Act is a $2.2 trillion economic package that is meant to stabilize individuals and employers, while the nation continues to experience shelter-in-place advisories/orders and hospitals report a surge of severely ill COVID-19 patients. The Act’s Paycheck Protection Program is retroactive to February 15, 2020, which is important for businesses that have been experiencing financial hardships starting in February.

Overview of CARES Act

The CARES Act amends several laws, as well as appropriates funds to assist individuals, families, and businesses that are experiencing financial difficulties due to COVID-19. There are loans available to small businesses for paycheck protection and loan forgiveness, and other assistance for individuals and businesses as it relates to unemployment insurance and tax relief. The Act supports the health care system by providing financial assistance for medical supplies and coverage. It also provides economic stabilization and assistance for severely distressed sectors (such as airlines), as well as additional COVID-19 relief funds, expanded telehealth and COVID-19 testing provisions, and emergency appropriations for COVID-19 health response and agency operations.

HSA and Telehealth Expansion

The CARES Act includes a new safe harbor under which high deductible health plans (HDHPs) can cover telehealth and other remote care before participants meet their deductibles (i.e., without cost-sharing). This temporary safe harbor applies for plan years beginning on or before December 31, 2021, unless extended. As a result of this safe harbor, no-cost telehealth may be provided for any reason–not just COVID-19 related issues–without disrupting HSA eligibility.

Prescription Drug Reimbursement under FSA/HRA/HSAs

The CARES Act allows …

Congress Passes Families First Coronavirus Response Act

Congress Passes Families First Coronavirus Response Act

 On March 18, Congress passed, and President Trump signed into law, the Families First Coronavirus Response Act(FFCRA). The FFCRA is a bipartisan effort to help employers and individuals alike in managing pay, benefits, and business considerations during the COVID-19 pandemic. The focus of this alert is the impact of FFCRA on employer-sponsored benefits and paid leave. The paid leave provisions of the Act apply to employers with less than 500 employees.  They are effective within 15 days from date of enactment and expire at the end of 2020, unless extended.

Mandated Free Testing

FFCRA mandates free COVID-19 testing from all group health plans, including fully insured and self-funded plans, as well as grandfathered plans. All group health plans must waive cost-sharing, prior authorization requirements, and other medical management as it relates to COVID-19 testing. This includes provider office visits, urgent care, emergency room, and other healthcare visits that are for the purpose of evaluating or administering testing.

Emergency FMLA

The FFCRA provides for up to 12 weeks of job-protected leave under the Family and Medical Leave Act (“FMLA”) for a “qualifying need related to a public health emergency.” These provisions generally apply to private-sector employers with under 500 employees and all government employers.  (There are exceptions for employers with less than 50 employees if the required leave would jeopardize the viability of their business.)  This new law expands the leave for employees who have been employed at least 30 days, overriding, for these purposes, FMLA’s general requirement that employees must be employed for at least 12 months to be covered. For these purposes, a “qualifying need” exists if an employee is unable to work or telework because he/she/they need to care for …

By |March 23rd, 2020|Employee Benefits, Employee Benefits Adviser, Employee Communications, Human Resources, Legislation, Medical|Comments Off on Congress Passes Families First Coronavirus Response Act