On May 10, 2021, the IRS published Notice 2021-26, Taxation of Dependent Care Benefits Available Pursuant to an Extended Claims Period or Carryover. This guidance clarifies previous Notice 2021-15, which stated that unused DCAP amounts carried over from prior years or made available during an extended period for incurring claims are not considered in determining the annual limit applicable for the following year.

On May 3, 2021, the Congressional Research Service (CRS) released “A Comparison of Tax-Advantaged Accounts for Health Care Expenses.” The report summarizes key aspects of and distinctions between health flexible spending accounts (FSAs), health reimbursement arrangements (HRAs), and health savings accounts (HSAs).

On April 13, 2021, the CMS Office of Financial Management issued an alert clarifying who has the responsibility for reporting primary prescription drug coverage as the responsible reporting entity (RRE).

On May 5, 2021, the DOL announced that it is withdrawing the “Independent Contractor Status Rule” that was first published in the Federal Register on January 7, 2021. This rule established a five-factor test that employers could apply in order to determine independent contractor status.

On April 19, 2021, the Joint Committee on Taxation released its Present Law and Background on Dependent Care and Paid Leave in preparation for the April 21, 2021, public hearing held by the House Committee on Ways and Means. The report describes the legal background, empirical data and policy considerations related to topics considered in the hearing which include, among other topics, various federal tax rules related to employer-provided dependent care assistance programs (DCAPs) and paid family and medical leave.

On April 6, 2021, the United States Court of Appeals for the Eleventh Circuit (the appellate court) ruled in Ramji vs. Hospital Housekeeping Systems that an employer cannot choose between workers’ compensation laws and federal FMLA obligations.

On April 2, 2021, the DOL, HHS and the Treasury (collectively, “the Departments”) jointly released FAQs regarding recent amendments to the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA). The guidance is intended to assist group health plan sponsors in understanding the new MHPAEA obligations imposed by the Consolidated Appropriations Act of 2021 (CAA).

On April 7, 2021, the DOL issued guidance regarding the COBRA subsidy provisions under the American Rescue Plan Act of 2021 (ARPA). As a reminder, the ARPA allows certain individuals to elect COBRA coverage and have that COBRA coverage 100% subsidized by the federal government from April 1, 2021, to September 30, 2021. An individual must have experienced a reduction of hours or termination of their employment (other than by reason of such employee's gross misconduct) in order to apply this subsidy.

In March, the US Court of Appeals for the Ninth Circuit (the appellate court) ruled in The ERISA Industry Committee v. City of Seattle that a Seattle local ordinance was not preempted by ERISA. At issue was Seattle Municipal Code (SMC) Section 14.28, which is a health benefits ordinance that requires hotel employers (and other hotel businesses) to either provide money directly to certain employees, or to include such employees in their health benefit plan. The court agreed with the district court that the Seattle ordinance does not relate to employee benefit plan operations...

On February 22, 2021, the United States Court of Appeals for the Tenth Circuit (the appellate court) ruled in Carlile v. Reliance Standard Life, et.al that an employee was entitled to long-term disability benefits, even though he was on notice of his termination and on short-term disability when he requested them. The employer provided the employee with a 90-day notice of termination (“notice period”) and did not require him to work during that time.