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CARES ACT – Impact on HSAs, HCFSAs, and HRAs

Posted March 30, 2020 by Patrick Haynes

This advisory summarizes key provisions in the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) applying to employee benefit plans.

Over-the-Counter (OTC) Drugs and Menstrual Care Products (optional)

The CARES Act states that consumers can purchase OTC drugs and medicines with funds from their Health Savings Account (HSA), Health Care Flexible Spending Account (HCFSA) or Health Reimbursement Arrangement (HRA). Consumers may also receive reimbursement for OTC purchases through those accounts. In addition, menstrual products are now considered a qualified medical expense, meaning consumers can pay for or be reimbursed for these products through an HSA, HCFSA or HRA. This provision is effective for purchases made after December 31, 2019, and for reimbursements of expenses incurred after December 31, 2019. It does not have an expiration date.

Implementation Tips:

  • No changes are necessary to implement these changes to a Health Savings Account. HSA participants are responsible for tracking their own reimbursements and spending habits.  However, please see the final bullet (below) about delays for debit-cards that may affect processing for these items.
  • HCFSA – the employer/plan sponsor will need to amend their plans to permit these changes and implement them with the HCFSA vendor and debit-card-provider.
  • HRAs – likewise, the employer/plan sponsor will need to amend their plans to permit these changes and implement them with the HRA vendor and debit-card-provider. Many HRAs will choose not to implement these changes because the HRA’s purpose was to cover portions of the medical or prescription drug out of pocket costs and not OTC medicines.
  • Inventory Information Approval System (IIAS) is updated with SKUs (Stock-Keeping Units, the bar codes on products) and once programmed debit cards will permit these purchases. The update is expected to happen nationwide (rapidly) for the OTC expansion. Whereas the addition of menstrual care products may take longer for nationwide programming to take effect with all vendors and merchants.

Telehealth Changes (temporary – only for plan years beginning on/before 12/31/2021) – also optional

The CARES Act states that “telehealth and other remote care services” below the deductible will be permitted in an HSA-compatible high-deductible health plan (HDHP). This provision is effective immediately and will expire December 31, 2021. The bill does not specify what “telehealth and other remote care services” entails, but you can expect updates from us as we learn more either through regulations or DOL/Treasury FAQs.

Implementation Tips:

  • The employer/plan sponsor will need to amend their plans to permit this change. They will also need to coordinate the change with the bank (aka “vendor”) and any debit card provider (if that is offered by a third party).

Remember, this “safe harbor” guidance is only available for a limited time.  Given the importance of telehealth in the COVID-19 crisis this will come as a relief, enabling employers to temporarily remove safeguards put into place to ensure HDHP/HSA compatibility for telehealth, such as charging fair market value until participants meet the statutory minimum deductible. However, unless this relief is extended for plan years beginning on or after January 1, 2022, employers will need to revert to their current safeguards.

Health and Welfare Plans in General- these changes are not optional

  • Plans must cover all testing for COVID-19, without cost-sharing, even for those tests that have not yet received an emergency use authorization from the FDA. In addition, plans must cover all qualifying preventive items, services or vaccines for COVID-19 once developed, without cost sharing.
  • There is no exception to the cost-sharing rules for church groups and government sponsored health plans–all plans (fully insured or self-funded) need to comply.  This includes private companies and both for-profit and not-for-profit companies.
  • A group health plan or a health insurance issuer will pay the provider either the negotiated rate or, if no negotiated rate is in effect because the provider is out-of-network, the lesser of the cash price for the service as posted by the provider on a public website or a different negotiated rate. Any provider that attempts to charge more than these set costs is subject to civil monetary penalties of up to $300 per day.
  • Preventive Services Note – (once a vaccine is available). Private group and individual health insurance plans (all plans governed by ERISA) will be required to cover all qualifying preventive items, services or vaccines for COVID-19 once developed, without cost sharing, within 15 days after the service or vaccine has received a qualifying recommendation from either the United States Preventive Services Task Force or the Advisory Committee on Immunization Practices.

After an HCFSA or HRA plan is modified, by the ER (in writing), this will apply to claims incurred and paid after December 31, 2019. No modifications are necessary to permit this OTC change to HSAs.

Please speak with your Account Manager or Sales Executive for assistance with any of these changes.

Links:

In response to Coronavirus, AssuredPartners has recently launched a COVID-19 resources page and can be found here. AP Benefit Advisors’ COVID-19 resources page can be found here.


For more information, contact info@apbenefitadvisors.com. The information contained in this post, and any attachments, is not intended and should not be misconstrued as legal advice. You should contact your employment, benefits or ERISA attorney for legal direction.

AP Benefit Advisors’ webinar and website resources are designed for U.S.-based organizations. Our privacy and GDPR policy should be reviewed here. Please opt-out if you do not agree to these terms and conditions.

DOL FFCRA Alert – April 1 Effective Date for FFCRA Leave due to COVID-19

Posted March 25, 2020 by Patrick Haynes

On Tuesday, March 24, the Department of Labor (DOL) announced that the effective date of the leaves available through the Families First Coronavirus Response Act (FFCRA) will be April 1, 2020.  Based upon the bill’s original language, the effective date was widely believed to be April 2, 2020.

The DOL announced the effective date in a “Questions and Answers” document where it also provided answers to some common questions. Other than the April 1 effective date, the information is in line with prior guidance.  The DOL also released two Fact Sheets, both of which appear to contain the same information.  It is possible that they are building a framework for future updates with different pages for Employees and Employers.  Here are the links:

While the links above do not provide much new information, they are worth reviewing. We are still waiting on regulations from the DOL to answer many questions about how these leaves will be administered and how they will coordinate with other leaves (sick, PTO, etc.) as well as any corresponding offsets to other claims, like STD, TDI (in NJ, NY, HI, RI, PR, CA), and Worker’s Compensation claims. 

Please speak with your Account Manager or Executive regarding any questions you may have.

Prior COVID-19 Related Guidance:

 

In response to Coronavirus, AssuredPartners has recently launched a COVID-19 resources page on our website.  AP Benefit Advisors’ COVID-19 resources can be found on this website.  

IRS and Departments of Treasury and Labor Announce Plan to Implement Coronavirus-Related Paid Leave for Workers and Tax Credits for Small & Midsize Businesses

Posted March 23, 2020 by Megan DiMartino

Over the weekend, the U.S. Treasury Department, Internal Revenue Service (IRS), and the U.S. Department of Labor (Labor) announced that small and midsize employers can begin taking advantage of two new refundable payroll tax credits, designed to immediately and fully reimburse them, dollar-for-dollar, for the cost of providing Coronavirus-related leave to their employees. This relief to employees and small and midsize businesses is provided under the Families First Coronavirus Response Act (Act), signed by President Trump on March 18, 2020.

The Act will help the United States combat and defeat COVID-19 by giving all American businesses with fewer than 500 employees funds to provide employees with paid leave, either for the employee’s own health needs or to care for family members. The legislation will enable employers to keep their workers on their payrolls, while at the same time ensuring that workers are not forced to choose between their paychecks and the public health measures needed to combat the virus.

Key Takeaways

  • Paid Sick Leave for Workers
    • For COVID-19 related reasons, employees receive up to 80 hours of paid sick leave and expanded paid child care leave when employees’ children’s schools are closed or child care providers are unavailable.
  • Complete Coverage
    Employers receive 100% reimbursement for paid leave pursuant to the Act.

    • Health insurance costs are also included in the credit.
    • Employers face no payroll tax liability.
    • Self-employed individuals receive an equivalent credit.
  • Fast Funds
    Reimbursement will be quick and easy to obtain.

    • An immediate dollar-for-dollar tax offset against payroll taxes will be provided.
    • Where a refund is owed, the IRS will send the refund as quickly as possible.
  • Small Business Protection
    • Employers with fewer than 50 employees are eligible for an exemption from the requirements to provide leave to care for a child whose school is closed, or child care is unavailable in cases where the viability of the business is threatened.
  • Easing Compliance
    • Requirements subject to 30-day non-enforcement period for good faith compliance efforts.

To take immediate advantage of the paid leave credits, businesses can retain and access funds that they would otherwise pay to the IRS in payroll taxes. If those amounts are not sufficient to cover the cost of paid leave, employers can seek an expedited advance from the IRS by submitting a streamlined claim form that will be released next week.

Background

The Act provided paid sick leave and expanded family and medical leave for COVID-19-related reasons and created the refundable paid sick leave credit and the paid child care leave credit for eligible employers. Eligible employers are businesses and tax-exempt organizations with fewer than 500 employees that are required to provide emergency paid sick leave and emergency paid family and medical leave under the Act. Eligible employers will be able to claim these credits based on qualifying leave they provide between the effective date and December 31, 2020. Equivalent credits are available to self-employed individuals based on similar circumstances.

Paid Leave

The Act provides that employees of eligible employers can receive two weeks (up to 80 hours) of paid sick leave at 100% of the employee’s pay where the employee is unable to work because the employee is quarantined, and/or experiencing COVID-19 symptoms, and seeking a medical diagnosis. An employee who is unable to work because of a need to care for an individual subject to quarantine, to care for a child whose school is closed or child care provider is unavailable for reasons related to COVID-19, and/or the employee is experiencing substantially similar conditions as specified by the U.S. Department of Health and Human Services (HHS) can receive two weeks (up to 80 hours) of paid sick leave at 2/3 the employee’s pay. An employee who is unable to work due to a need to care for a child whose school is closed, or child care provider is unavailable for reasons related to COVID-19, may in some instances receive up to an additional 10 weeks of expanded paid family and medical leave at 2/3 the employee’s pay.

Paid Sick Leave Credit

For an employee who is unable to work because of Coronavirus quarantine or self-quarantine or has Coronavirus symptoms and is seeking a medical diagnosis, eligible employers may receive a refundable sick leave credit for sick leave at the employee’s regular rate of pay, up to $511 per day and $5,110 in the aggregate, for a total of 10 days.

For an employee who is caring for someone with Coronavirus, or is caring for a child because the child’s school or child care facility is closed, or the child care provider is unavailable due to the Coronavirus, eligible employers may claim a credit for 2/3 of the employee’s regular rate of pay, up to $200 per day and $2,000 in the aggregate, for up to 10 days. Eligible employers are entitled to an additional tax credit determined based on costs to maintain health insurance coverage for the eligible employee during the leave period.

Child Care Leave Credit

In addition to the sick leave credit, for an employee who is unable to work because of a need to care for a child whose school or child care facility is closed or whose child care provider is unavailable due to the Coronavirus, eligibile employers may receive a refundable child care leave credit. This credit is equal to 2/3 of the employee’s regular pay, capped at $200 per day or $10,000 in the aggregate. Up to 10 weeks of qualifying leave can be counted toward the child care leave credit. Eligible employers are entitled to an additional tax credit determined based on costs to maintain health insurance coverage for the eligible employee during the leave period.

Prompt Payment for the Cost of Providing Leave

When employers pay their employees, they are required to withhold from their employees’ paychecks federal income taxes and the employees’ share of Social Security and Medicare taxes. The employers then are required to deposit these federal taxes, along with their share of Social Security and Medicare taxes, with the IRS and file quarterly payroll tax returns (Form 941 series) with the IRS.

Under guidance that will be released next week, eligible employers who pay qualifying sick or child care leave will be able to retain an amount of the payroll taxes equal to the amount of qualifying sick and child care leave that they paid, rather than deposit them with the IRS.

The payroll taxes that are available for retention include withheld federal income taxes, the employee share of Social Security and Medicare taxes, and the employer share Social Security and Medicare taxes with respect to all employees.

If there are not sufficient payroll taxes to cover the cost of qualified sick and child care leave paid, employers will be able to file a request for an accelerated payment from the IRS. The IRS expects to process these requests in two weeks or less. The details of this new, expedited procedure will be announced next week.

Examples

If an eligible employer paid $5,000 in sick leave and is otherwise required to deposit $8,000 in payroll taxes, including taxes withheld from all its employees, the employer could use up to $5,000 of the $8,000 of taxes it was going to deposit for making qualified leave payments. The employer would only be required under the law to deposit the remaining $3,000 on its next regular deposit date.

If an eligible employer paid $10,000 in sick leave and was required to deposit $8,000 in taxes, the employer could use the entire $8,000 of taxes in order to make qualified leave payments and file a request for an accelerated credit for the remaining $2,000.

Equivalent child care leave and sick leave credit amounts are available to self-employed individuals under similar circumstances. These credits will be claimed on their income tax return and will reduce estimated tax payments.

Small Business Exemption

Small businesses with fewer than 50 employees will be eligible for an exemption from the leave requirements relating to school closings or child care unavailability where the requirements would jeopardize the ability of the business to continue. The exemption will be available in circumstances involving jeopardy to the viability of an employer’s business as a going concern. Labor will provide emergency guidance and rulemaking to clearly articulate this standard.

Non-Enforcement Period

Labor will be issuing a temporary non-enforcement policy that provides a period of time for employers to come into compliance with the Act. Under this policy, Labor will not bring an enforcement action against any employer for violations of the Act so long as the employer has acted reasonably and in good faith to comply with the Act. Labor will instead focus on compliance assistance during the 30-day period.

For More Information

For more information about these credits and other relief, visit Coronavirus Tax Relief on IRS.gov. Information regarding the process to receive an advance payment of the credit will be posted next week.

Source:


For more information, contact info@apbenefitadvisors.com. The information contained in this post, and any attachments, is not intended and should not be misconstrued as legal advice. You should contact your employment, benefits or ERISA attorney for legal direction.

AP Benefit Advisors’ webinar and website resources are designed for U.S.-based organizations. Our privacy and GDPR policy should be reviewed here. Please opt-out if you do not agree to these terms and conditions.

New Federal Law Mandates Paid Sick Leave & Enhanced Unemployment for Workers Affected by COVID-19 Pandemic

Posted March 19, 2020 by Patrick Haynes

The Senate passed The Families First Coronavirus Response Act [H.R. 6201] in the afternoon of March 18, 2020, with a vote of 90-8, and President Donald Trump signed this into law.  This Act created a federal paid sick leave requirement for coronavirus needs and expanded the Family and Medical Leave Act (FMLA) leave for purposes of childcare during a public health emergency.

Effective April 2, 2020, the new provisions are applicable to private employers with fewer than 500 employees (full-time and part-time), as well as some governmental employees. We can expect to see regulations from the DOL in this area, but most experts agree that the expansion for FMLA, for these express purposes, will be on a control-group basis, so very large employers, with more than 500 employees within the control group, will be exempt. Although, many are indicating that they expect to create and implement similar plans on a voluntary basis.

A.  The Families First Coronavirus Response Act: Emergency Paid Sick Time

Up to two (2) weeks of Emergency Paid Sick Time (“EPST”) for various COVID-19 related events is available when an employee is unable to work (or telework) because:

  1. They are experiencing symptoms of COVID-19 and seeking a medical diagnosis.
  2. They are subject to a federal, state, or local government quarantine or isolation due to COVID-19.
  3. They have been told by a health care provider that he or she should self-quarantine due to experiencing symptoms of COVID-19.
  4. They are assisting an individual who is subject to a governmental quarantine or self-quarantine because of COVID-19.
  5. They are caring for a son or daughter if his/her school/childcare provider is unavailable because of COVID-19 considerations.
  6. They are experiencing any other substantially similar condition specified by the Secretary of Health and Human Services.

In the first three circumstances listed above, the employee would be eligible for their regular hourly rate of pay, with a maximum of $511 per day and the total shall not exceed $5,110. In circumstances four through six (4-6) listed above, the employee would be eligible for two-thirds of their regular hourly rate of pay, with a maximum of $200 per day and the total shall not exceed $2,000.

Part-time employees are also eligible for EPST and are paid at their regular rate of pay for the average number of hours per day that the employee was scheduled to work during a two-week period. For employees with fluctuating hours worked, the employer may use the average number of hours per day that the employee was scheduled to work (including hours for which the employee took any type of leave or paid time off) for the six-month period prior to the start date of requested EPST leave.

EPST must be made available immediately, regardless of how long the employee has been employed by the employer. In addition, employers are prohibited from requiring the employee to find a replacement coworker to cover their hours and are also prohibited from requiring employees to utilize existing paid time off in place of the EPST. All applicable EPST must be utilized prior to an employee using any other accrued paid time off provided by the employer.

If an employee has received at least one day paid sick leave related to COVID-19 prior to this act, an employer may require the employee to provide reasonable notice as to their health status to be able to use the EPST.

A model notice to provide employees will be available by the Labor Department on or around March 26, 2020.

B.  The Families First Coronavirus Response Act: Emergency FMLA Expansion Act

The Family Medical Leave Act (FMLA) is amended to provide up to 12 workweeks of Public Health Emergency Leave (PHEL) for instances in which an employee is unable to work (or telework) due to the need for leave to care for a minor child (under the age of 18) of such employee if the school or place of care has been closed, or the child care provider is unavailable, due to a public health emergency.

While FMLA generally applies to employers with at least 50 employees, all employers with fewer than 500 employees must provide PHEL. Employers with fewer than 50 employees may be exempt if they can demonstrate that granting such leave would “jeopardize the viability of the business as a going concern.” Since President Trump issued a proclamation that the COVID-19 outbreak is a national emergency, all employees who have been actively working for at least 30 days (regardless of hours worked) are eligible for PHEL. (Standard FMLA-like tenure, hours worked, etc. do not apply in this limited capacity.)  

The first ten (10) days for which an employee takes PHEL may be unpaid leave and employees may have the opportunity to substitute any accrued paid time off for unpaid leave. After the tenth (10th) day, the employer must provide paid leave in an amount that is not less than two-thirds of an employee’s regular rate of pay, for the number of hours the employee would otherwise regularly be scheduled. In all circumstances, the maximum paid leave per day is $200 and shall not exceed $10,000 in total.

Part-time employees are also eligible for PHEL and are paid at their regular rate of pay for the average number of hours per day that the employee was scheduled to work during a two-week period. For employees with fluctuating hours worked, the employer may use the average number of hours per day that the employee was scheduled to work (including hours for which the employee took any type of leave or paid time off) for the six-month period prior to the start date of requested PHEL leave.

The Families First Coronavirus Response Act: Key Points

  • EPST and PHEL can start at any point in 2020 but cannot be used in 2021 and unused time/hours cannot be carried over into 2021.
  • An employer cannot force employees to use other forms of leave concurrently with the new and additional leave provided by the act.
  • Employers may not change any type of paid time off policies that would interfere with EPST or PHEL once the legislation is enacted.
  • An employer may elect to exclude health care providers and emergency responders from the leave benefits.
  • Non-Retaliation Provisions: the  new  law  includes  provisions  that  make  it  unlawful  for  any  employer  to  discharge, discipline, or discriminate against any employee for taking leave under the Act.
  • Exemptions: the law contains provisions that allow the DOL to exempt businesses with fewer than 50 employees if the imposition of leave requirements would jeopardize business viability.
  • Employer Tax Credits: the law provides a refundable payroll tax credit to employers to cover 100% of the cost of wages.
  • Cost-Free Coverage: group health plans subject to ERISA (including ACA-grandfathered health plans), shall provide coverage, and shall not impose any cost sharing (including deductibles, copayments, and coinsurance) requirements or prior authorizations or other medical management requirements, for diagnostic testing for the detection of SARS-CoV-2 or the diagnosis of the virus that causes COVID-19, that are FDA approved.  This includes in-person visits, telehealth (if available), urgent care center, and ER visits.  See, E.g. Division F, Section 6001, on page 24 of 43.

Please contact your Account Manager or Account Executive for any questions about how these changes may affect your plans.

Links:

Prior guidance:


For more information, contact info@apbenefitadvisors.com. The information contained in this post, and any attachments, is not intended and should not be misconstrued as legal advice. You should contact your employment, benefits or ERISA attorney for legal direction.

AP Benefit Advisors’ webinar and website resources are designed for U.S.-based organizations. Our privacy and GDPR policy should be reviewed here. Please opt-out if you do not agree to these terms and conditions.

HRCI & SHRM Pre-Approved Webinar | USCIS Form I-9: Purpose, Completion and Audit

Posted March 17, 2020 by Megan DiMartino

Do you understand the requirements of the Form I-9 to ensure accuracy and compliance with employment eligibility verification?

Immigration related accountability is on the rise. The United States Immigration and Customs Enforcement (ICE) continues to focus on worksite enforcement in 2020. An increasing number of companies are now requiring the use of E-Verify as a prerequisite to doing business and several states are now mandating its use to the point that Congress is considering E-Verify as a mandatory requirement. The Immigration Reform and Control Act of 1986 requires that employers verify the identity and work eligibility of all newly hired employees. The Form I-9 is provided by the Federal government for that purpose. Every employee must complete a Form I-9 when the individual is hired.

Join us for this HRCI* and SHRM** pre-approved, complimentary, one-hour webinar as our Director of HR Professional Services, Cindy Wagner, reviews the following topics and more:

  • How many employers comply?
  • How many employers regularly monitor compliance?
  • What are the deadlines for completing the Form I-9?
  • How should employers/employees complete the Form I-9?
  • What happens if the employee does not provide the needed documentation timely?
  • Can employers obtain too much documentation?
  • How should employers handle remote hires?
  • What should an employer do in the case of an ICE Audit?

Webinar details:

  • Thursday, March 26, 2020
  • 2:00pm – 3:00 pm EDT
  • No cost to attend
  • This webinar is open to all HR and Finance Professionals – but not to brokers, agents, TPAs and PEOs

Register Now


*The use of the HRCI seal confirms that this activity has met HR Certification Institute’s criteria for recertification credit pre-approval.
*
*AP Benefit Advisors, LLC is recognized by SHRM to offer Professional Development Credits (PDCs) for SHRM-CP or SHRM-SCP. This program is valid for 1 PDC.


For more information, contact info@apbenefitadvisors.com. The information contained in this post, and any attachments, is not intended and should not be misconstrued as legal advice. You should contact your employment, benefits or ERISA attorney for legal direction.

AP Benefit Advisors’ webinar and website resources are designed for U.S.-based organizations. Our privacy and GDPR policy should be reviewed here. Please opt-out if you do not agree to these terms and conditions.

Overwhelming Vote Passes Cornoavirus Relief Bill

Posted March 16, 2020 by Megan DiMartino

The U.S. House of Representatives passed the Families First Coronavirus Response Act (the “Act”) in an overwhelming vote on Saturday, March 14, 2020. President Trump has endorsed the legislation and the U.S. Senate is expected to vote on it today.

The Act will be the second emergency Coronavirus response measure to be passed. President Trump had previously signed a bill to provide $8.3 billion in funding to federal health agencies and declared a national emergency this past Friday over the pandemic. A third emergency measure is also being discussed.

Provisions of the Act
In addition to the funding for economic assistance and COVID-19 testing, the Act contains provisions intended to support workers:

  • 14 days of paid sick leave, at two-thirds (or more) of their regular rate of pay, for government workers and employees of companies with fewer than 500 employees. Leave is available to workers who are sick, have to care for a sick family member or have a child whose school or childcare facility has closed due to the Coronavirus.
  • Expansion of the Family and Medical Leave Act (FMLA) for employees of companies with fewer than 500 employees, requiring paid leave at the two-thirds rate after 14 days.
  • A tax credit for employers that provide paid sick leave benefits required by the Act.
  • Additional funding for state unemployment programs.

The Act does not contain a payroll tax suspension that was proposed by President Trump


For more information, contact info@apbenefitadvisors.com. The information contained in this post, and any attachments, is not intended and should not be misconstrued as legal advice. You should contact your employment, benefits or ERISA attorney for legal direction.

AP Benefit Advisors’ webinar and website resources are designed for U.S.-based organizations. Our privacy and GDPR policy should be reviewed here. Please opt-out if you do not agree to these terms and conditions.

CMS FAQs on Essential Health Benefits and COVID-19

Posted March 16, 2020 by Megan DiMartino

The Centers for Medicare & Medicaid Services (CMS) released a list of frequently asked questions (FAQs) on Essential Health Benefit (EHB) coverage and the Coronavirus (COVID-19). Under the Affordable Care Act (ACA), EHB reflects the scope of benefits covered by a typical employer and covers at least 10 specified categories of items and services.

CMS’ FAQs:

1.Does EHB currently include coverage for the diagnosis and treatment of COVID-19?
Yes. EHB generally includes coverage for the diagnosis and treatment of COVID-19. However, the exact coverage details and cost-sharing amounts for individual services may vary by plan, and some plans may require prior authorization before these services are covered.

Non-grandfathered health insurance plans purchased by individuals and small employers, including qualified health plans (QHPs) purchased on the Exchanges, must provide coverage for 10 categories of EHB. These 10 categories include, among other things, hospitalization and laboratory services. Under current regulations, each state and the District of Columbia generally determines the specific benefits that plans in that state must cover within the 10 EHB categories. This standard set of state-determined benefits is called the EHB-benchmark plan. All 51 EHB-benchmark plans currently provide coverage for the diagnosis and treatment of COVID-19.

Many health plans have publicly announced that COVID-19 diagnostic tests are covered benefits and that they will waive any cost-sharing that would otherwise apply to the tests. Furthermore, many states are encouraging their issuers to cover a variety of COVID-19-related services, including testing and treatment, without cost-sharing. Other states have announced that health plans must cover the diagnostic testing of COVID-19 without cost-sharing and waive any prior authorization requirements for such testing.

2.Is isolation and quarantine for the diagnosis of COVID-19 covered as EHB?
All EHB-benchmark plans cover medically necessary hospitalizations. Medically necessary isolation and quarantine required by and under the supervision of a medical provider during a hospital admission are generally covered as EHB. The cost-sharing and specific coverage limitations associated with these services may vary by plan. For example, some plans may require prior authorization before these services are covered or apply other limitations. Quarantine outside of a hospital setting (such as at home) is not a medical benefit, nor is it required as EHB. However, other medical benefits that occur in the home may be covered as EHB if they are required by and provided under the supervision of a medical provider (such as home health care or telemedicine), but this may depend on prior authorization or be subject to cost-sharing or other limitations.

3.When a COVID-19 vaccine is available, will it be covered as EHB, and will issuers be permitted to require cost-sharing?
A COVID-19 vaccine does not currently exist. However, current law and regulations require specific vaccines to be covered as EHB without cost-sharing, and before any applicable deductible is met, if the Advisory Committee on Immunization Practices (ACIP) of the Centers for Disease Control and Prevention (CDC) recommends them. Under current regulations, plans are not required to cover a new vaccine until the beginning of the plan year that is 12 months after ACIP issues a recommendation for it. However, plans may voluntarily choose to cover a vaccine for COVID-19, with or without cost-sharing, prior to that date.

In addition, as part of a plan’s responsibility to cover prescription drugs as EHB, as described above to cover ACIP-recommended vaccines, if a plan does not provide coverage of a vaccine (or other prescription drugs) on the plan’s formulary, enrollees may use the plan’s drug exceptions process to request that the vaccine be covered under their plan.

Takeaways:

  • EHB generally includes coverage for the diagnosis and treatment of COVID-19.
  • All EHB-benchmark plans cover medically necessary hospitalizations, including isolation and quarantine.
  • A COVID-19 vaccine does not currently exist. Plans are not required to cover any new vaccine until the beginning of the plan year, 12 months after the CDC recommends it. However, plans may voluntarily choose to cover a vaccine for COVID-19, with or without cost-sharing, prior to that date.

Source & Links:


For more information, contact info@apbenefitadvisors.com. The information contained in this post, and any attachments, is not intended and should not be misconstrued as legal advice. You should contact your employment, benefits or ERISA attorney for legal direction.

AP Benefit Advisors’ webinar and website resources are designed for U.S.-based organizations. Our privacy and GDPR policy should be reviewed here. Please opt-out if you do not agree to these terms and conditions.

IRS HDHP-HSA Plans May Cover Coronavirus Costs as Preventive Care

Posted March 11, 2020 by Patrick Haynes

Today, in IRS Notice 2020-15, the Internal Revenue Service advised that HDHPs (High-Deductible Health Plans) can pay for 2019 Novel Coronavirus (COVID-19)-related testing and treatment, without jeopardizing their status. This also means that an individual with an HDHP that covers these costs may continue to contribute to a health savings account (HSA).

 

In Notice 2020-15, the IRS said that health plans that otherwise qualify as HDHPs will not lose that status merely because they cover the cost of testing for or treatment of COVID-19 before plan deductibles have been met. The IRS also noted that, as in the past, any vaccination costs continue to count as preventive care and can be paid for by an HDHP.

 

Today’s notice applies only to HSA-eligible HDHPs. Employees and other taxpayers in any other type of health plan with specific questions about their own plan and what it covers should contact their plan.

 

Coverage Issues

There have been many updates in this area. States like California have already issued a notice telling all fully-insured carriers to cover the costs without any cost-sharing measures. Self-funded plans have options about covering the costs with or without cost-sharing measures. Some TPAs are taking the position that they are covered without cost-sharing unless/until a self-funded group opts out.

Please check with your Account Manager and Acccount Executive about how this may affect your plan. And, rest assured that with IRS Notice 2020-15, if you choose to have the cost covered without deductible, copay or coinsurance your plan participants’ HSAs will not be effected.

 

Prior guidance/links:


For more information, contact info@apbenefitadvisors.com. The information contained in this post, and any attachments, is not intended and should not be misconstrued as legal advice. You should contact your employment, benefits or ERISA attorney for legal direction.

AP Benefit Advisors’ webinar and website resources are designed for U.S.-based organizations. Our privacy and GDPR policy should be reviewed here. Please opt-out if you do not agree to these terms and conditions.

Coronavirus – Keep Informed and Prepared, but Don’t Panic

Posted February 28, 2020 by Megan DiMartino

The intensive media coverage of the coronavirus outbreak (now officially designated as COVID-19) could be raising many concerns in your local schools and colleges. It can seem overwhelming, and without focusing on facts and keeping updated on the latest official information (and recommendations), can lead to some level of panic. In an effort to help everyone stay abreast of the current status of this threat, as well as help prepare for a possible higher-risk exposure, we recommend the following steps:

1. Stay up to date, relying on trusted news sources

Both the U.S. Centers for Disease Control (CDC) and the California Department of Public Health (CDPH) offer comprehensive and regularly updated information. At the moment, neither agency is making specific recommendations for schools/colleges.

  • As of 2/27/2020, the CDC states “For the general American public, who are unlikely to be exposed to this virus at this time, the immediate health risk from COVID-19 is considered low.”
  • As of 2/27/2020, the CDPH states “…the health risk to the general public in California remains low.” In addition, The Public Health Department is not recommending the cancellation of public events at this time. There is no evidence of sustained person-to-person transmission of the virus in the United States.”

2. Practice Precautionary Prevention Measures

It’s helpful for all community members to keep the fears of this new disease threat in perspective. In contrast to the widespread influenza (flu) activity throughout most of the country, coronavirus infections are extremely isolated at this point. Many of the precautions against the flu are the same actions that will help protect against coronavirus and similar infectious diseases. The California Department of Public Health recommends the following steps to prevent the spread of all respiratory viruses:

  • Washing hands with soap and water
  • Avoiding touching eyes, nose or mouth with unwashed hands
  • Avoiding close contact with people who are sick to reduce the risk of infection from any type of virus
  • Staying away from work, school or other people if you become sick with respiratory symptoms like fever and cough

3. Be Prepared

Your Emergency Operations Plan (EOP) should have both a “Continuity of Operations” plan as well as a “Pandemic Influenza” annex. While the risk remains low, now is the perfect time to review these plans/annexes, practice them (anything from a simple tabletop exercise to a full-practice “drill”), and make any modifications you may need. Should the CDC and/or CDPH make recommendations regarding the closure of schools, you will be in a much better position to respond and act on these recommendations having recently exercised your EOP. If your Emergency Operations Plan does not have either of these items, FEMA offers a template specific to Pandemic Influenza:

We encourage everyone to review the latest information from the CDC and CDPH to get a better understanding of the issue, utilizing the two links below:

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For more information, contact info@apbenefitadvisors.com. The information contained in this post, and any attachments, is not intended and should not be misconstrued as legal advice. You should contact your employment, benefits or ERISA attorney for legal direction.

AP Benefit Advisors’ webinar and website resources are designed for U.S.-based organizations. Our privacy and GDPR policy should be reviewed here. Please opt-out if you do not agree to these terms and conditions.

HHS Releases Federal Poverty Level Guideline Updates for 2020

Posted February 5, 2020 by Megan DiMartino

Author: Nathanael M. Alexander, Esq., Director of Compliance – AP Benefit Advisors

On January 17, 2020, the Department of Health and Human Services (HHS) published the updated Federal Poverty Level (FPL) guidelines for 2020. The revised FPL guidelines are effective as of January 15, 2020, with the new FPL level set at $12,670 for a person residing in the contiguous U.S. or Washington D.C., $14,680 for Hawaiian residents, and $15,950 for persons residing in Alaska.

What is the Federal Poverty Level?

A measure of household income issued every year by HHS. Federal poverty levels are used to determine eligibility for certain programs, subsidies, and benefits, including savings on Marketplace health insurance, and Medicaid and CHIP coverage. The FPL is a measurement of a family’s annual income, with each local, state, and federal assistance agency applying the guidelines for eligibility purposes in their programs in their own way, i.e., some agencies may define a household’s income as pre-tax while others may consider only a household’s post-tax income in their calculation for eligibility.

How often are the FPL Guidelines updated and to whom do they apply?

HHS updates the FPL guidelines annually every January, modifying them accordingly to account for inflation, and issues specific guidelines for each household size.

The FPL can affect employer-shared responsibility (ESR) assessments under the Affordable Care Act (ACA) as it pertains to both premium tax credits and affordability testing.

In order to be considered eligible for the premium tax credit, your household income must be between 100-400% of the federal poverty line amount in accordance with your family size. However, there are two exceptions that are applicable to those with household income below 100% of the corresponding federal poverty line. Those two exceptions are outlined here in the Instructions for Form 8962 (Premium Tax Credit Form), in addition to more specific information on how to go about obtaining the premium tax credit. It must of course be noted that household income alone does not solely qualify an individual to receive the premium tax credit, as other eligibility criteria must also be met. Aside from income, the other four factors that must be considered include the following:

  • cost of available insurance coverage,
  • state of residence,
  • physical address, and
  • family size.

For affordability testing, employers are utilizing this safe harbor test to determine whether or not their lowest-cost, self-only minimum essential coverage (MEC) plan is considered affordable to its employees. This is where the FPL guidelines come into play. If the employer is providing a plan that does not meet the affordability rules an employee would then have access to premium subsidies, so long as they meet the other requisite eligibility requirements. Premium subsidies are not available to individuals with a household income that exceeds the 400% FPL threshold, as discussed above, and to employees residing in the U.S. illegally. Since open enrollment for 2020 plans occurred in 2019, the 2019 FPL guidelines will be used to calculate affordability for any plans with a 2020 effective date. The maximum monthly premium contribution that meets the FPL safe harbor test for affordability would be set at 9.86% of the prior year’s FPL amounts divided by 12. So, for example, using the 2019 FPL amount for the mainland U.S., the formula would be (9.78% x $12,490) ÷ 12, which equals $101.79.

Please contact your Account Manager or Sales Executive for additional information on this topic.

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For more information, contact info@apbenefitadvisors.com. The information contained in this post, and any attachments, is not intended and should not be misconstrued as legal advice. You should contact your employment, benefits or ERISA attorney for legal direction.

AP Benefit Advisors’ webinar and website resources are designed for U.S.-based organizations. Our privacy and GDPR policy should be reviewed here. Please opt-out if you do not agree to these terms and conditions.