The US Department of Labor, in conjunction with the Internal Revenue Service and US Department of the Treasury, issued guidance and deadline extensions applicable to ERISA-governed group health and welfare plans. The guidance provides relief for plan sponsors, plan administrators and plan participants that may be struggling to comply with applicable deadlines and requirements in the midst of the chaos related to the COVID-19 pandemic.
On May 1, 2020, the Department of Labor (DOL) issued updated Frequently Asked Questions and revised model notices under the Consolidated Omnibus Budget Reconciliation Act (COBRA). COBRA is a federal law that permits individuals to continue group health plan coverage for a limited period of time following certain events, such as a termination of employment, that are coupled with a loss of coverage. Employers are required to notify individuals of their rights under COBRA.
The changes in the model notices are primarily designed to help Medicare-eligible individuals understand their options for healthcare coverage. The model notices, however, do not include language that addresses DOL relief issued earlier in the week that provides additional time for individuals to elect COBRA coverage through the end of the coronavirus pandemic. Plan sponsors should work with their COBRA vendors and legal counsel to determine whether the model notice updates or coronavirus relief would necessitate any updates to the notices currently used by their group health plan to notify plan participants and beneficiaries of their rights under COBRA.
How should US employers approach the Coronavirus? With rapid developments in local, state and federal guidance and law, the appropriate approach for each employer will vary depending on the nature of the work, industries served, location(s), size, amongst other considerations. We recently updated these FAQs to provide you with the latest developments and best practices for your business.
Overview
A new IRS notice extends the deadline for individuals to make health savings account (HSA) contributions from April 15, 2020 to July 15, 2020. The IRS issued the notice to provide taxpayers with various tax filing and payment deadline extensions in response to the ongoing COVID-19 emergency.
In Depth
In response to the COVID-19 emergency, the IRS has issued Notice 2020-18, which extends certain tax filing and payment deadlines. All taxpayers with filing or payment deadlines of April 15, 2020 are eligible for relief under the Notice, regardless of whether they are directly impacted by COVID-19 (for example, due to illness or quarantine). The Notice extends the deadline for individuals to make contributions to their health savings accounts from April 15, 2020 to July 15, 2020.
HSAs allow individuals who are covered under high-deductible health plans (HDHPs) to contribute an amount up to IRS limits ($3,550 for individual coverage and $7,100 for family coverage in 2020), which is used to pay for certain eligible medical expenses on a pre-tax basis. HSA contributions are typically due by the federal income tax filing deadline of April 15. Because that deadline has now been extended to July 15, 2020, the IRS has also extended the deadline to make HSA contributions until the new filing deadline.
Earlier this month, the IRS allowed individuals covered by an HDHP to receive testing and care for COVID-19 without a deductible, or with a deductible below the HDHP minimum, without disqualifying the individual from making or receiving HSA contributions (see our previous On the Subject here).
In the ongoing effort to help individuals impacted by COVID-19, Congress passed the Coronavirus Aid, Relief, and Economic Securities Act (CARES Act) on March 27, 2020. The President signed the CARES Act into law the same day. The historic stimulus package provides wide-ranging relief for both employers and employees. This includes rules that impact health and welfare, retirement and executive compensation plans and programs.
For more information about the impact of the CARES Act on employer-provided benefits, access our On the Subject articles on the:
In addition, for information about the frequently asked questions regarding health and welfare, retirement and executive compensation issues in the COVID-19 era, access our FAQs.
Coronavirus (COVID-19) raises serious concerns for employers of all shapes and sizes, across all industries and in every business sector. As the impact of COVID-19 continues to grow, many employers are faced with new challenges that affect not only their businesses and their employees, but the health and welfare, retirement and executive compensation plans and programs on which those employees rely. These new issues are arising in addition to the myriad benefit plan challenges that employers face each day.
We address a number of frequently asked questions regarding health and welfare, retirement and executive compensation issues in the COVID-19 era. This includes not only questions about issues employers are currently facing, but questions about issues employers may face going forward. Given the rapidly evolving nature of the crisis, McDermott’s Employee Benefits and Executive Compensation team will periodically update these FAQs to provide you with the most up-to-date information. We will also continue to keep you informed of the latest developments and provide comprehensive insights to help you navigate these and related concerns.
The Families First Coronavirus Response Act (Families First) is now law and becomes effective April 2, 2020. For employers with less than 500 employees, and in certain situations for employees affected by coronavirus, Families First requires that employers provide two weeks of paid sick leave in certain situations and provide subsidized leave under the Family and Medical Leave Act. Tax credits will help to subsidize these requirements for affected employers. An outline of the legislation is provided.
As part of the Families First Coronavirus Response Act (the “Act”), Congress eliminated patient cost-sharing for Coronavirus (COVID-19) diagnostic testing and testing-related services provided under any employer-sponsored group health plan. This impacts all employer plans, insured and self-funded, of all sizes. The provisions are effective as of March 18 and will continue on a temporary basis for at least 90 days unless extended by the Department Health and Human Services (HHS).
We are proud to introduce the first annual McDermott Global Employment Law Year in Review: 2019. The purpose of this publication is to provide you with concise summaries of many of the laws and court decisions from 2019 that significantly impact employers and employees all over the world.
Many of the updates presented in this publication describe changes in the law that are well known to lawyers and Human Resource professionals from those countries. Others are less well known. Regardless, our aim is to provide you and your colleagues with a useful reference guide to significant changes in employment law all over the world. Furthermore, we hope this guide—and similar specially designed products we create for our clients—will serve as a tool to assist multi-national businesses in their ongoing struggle to maintain a consistent global corporate culture amidst an ever-changing landscape of local employment laws.
On March 13, 2020, President Trump declared a national emergency under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (the “Declaration”) due to extraordinary circumstances resulting from Coronavirus. This Declaration opens up new methods for employers to provide tax-favored financial assistance to employees who are affected, directly or indirectly, by the virus.
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