COVID-19 Update
Congressional Research Service Issues Report Regarding Payroll Tax Credit for COVID-19 Sick and Family Leave
On April 1, 2021, the Congressional Research Service (CRS) updated its Payroll Tax Credit for COVID-19 Sick and Family Leave report, providing details regarding the payroll tax credits associated with the extended paid leave originally provided by the Families First Coronavirus Response Act (FFCRA) available through the American Relief Plan Act of 2021 (ARPA).
The report summarizes the history of the payroll tax credits, noting the requirements under the FFCRA, the Consolidated Appropriations Act of 2021 (CAA) and the ARPA. As background, the FFCRA required certain employers to provide paid leave via emergency paid sick leave (EPSL) and expanded FMLA for specified reasons. The CAA extended the tax credits related to EPSL and expanded FMLA through March 31, 2021, but extending the FFCRA leave was optional for employers. The ARPA further extended the FFCRA-related tax credits now through September 30, 2021 (again, if an employer chooses to allow such leave).
In particular, the report highlights a few modifications provided by the ARPA related to the payroll tax credits, including:
- The 80-hours of EPSL resets for leave taken after March 31, 2021.
- Expanded FMLA per-employee limit is increased to $12,000.
- Payroll tax credits are available for sick leave taken to receive a COVID-19 vaccine (or for leave taken while waiting for COVID-19 test results).
- State and local governments, as well as certain non-profits, can claim the payroll tax credit.
- Payroll tax credits are claimed against the Medicare (HI) tax.
- If paid leave is permitted, it must be provided to all employees who qualify.
The report further explains that under the FFCRA, payroll tax credits were not available to state and local government employers (including school districts and public colleges), even though such employers were required to provide leave. However, ARPA allows certain government employers access to the payroll tax credits if they voluntarily choose to provide paid leave described above.
While the report does not provide any new guidance, it serves as a reminder of the payroll tax credits available for employers who choose to permit paid leave through September 30, 2021.
Payroll Tax Credit for COVID-19 Sick and Family Leave »Other COVID-19 Resources
Frequently Asked Questions: Benefits Compliance & the American Rescue Plan Act of 2021
IRS Announces that Personal Protective Equipment Can Be Treated as Medical Expenses
IRS Extends the Individual Tax-Filing Deadline
IRS Announces New COVID-19 Related Guidance for Section 125 Cafeteria Plans and Related High Deductible Health Plans, and ICHRAs
COVID-19 State Quick Reference Chart,Updated 3/18/21
Benefits Compliance COVID-19 FAQ
Federal Updates
DOL Issues Guidance Regarding the ARPA COBRA Subsidies
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. These individuals are referred to as Assistance Eligible Individuals or AEIs. A person who voluntarily terminates their employment is not eligible for this subsidy. The DOL’s guidance includes a series of FAQs, model notices and related information.
FAQs
The DOL provides 22 FAQs that regarding implementation of the COBRA requirements under ARPA. The topics addressed by the FAQs are as follows:
- FAQs 1 – 6: general information
- FAQs 7 – 9: premiums
- FAQs 10 – 12: notices
- FAQs 13 – 21: individual questions for employees and their families
- FAQ 22 (mis-numbered Q21): additional information
Several of the questions provide clarification of ARPA. According to FAQ number 2, premium subsidy provisions apply to all group health plans sponsored by private-sector employers or employee organizations (unions) subject to the COBRA rules. They also apply to plans sponsored by state or local governments subject to the continuation provisions under the Public Health Service Act. Premium subsidies are also available for group health insurance required under state mini-COBRA laws.
FAQ number 3 clarifies who is an AEI. In addition to those individuals who experienced a termination of employment (except for those who voluntarily terminated), an individual appears to be an AEI if they experience a reduction of hours, regardless of whether such a reduction is voluntary or involuntary. Examples of a “reduction of hours” include any temporary leaves of absence, an individual’s participation in a lawful labor strike and appears to include medical leave that does not result in the termination of the individual’s employment. If an individual is eligible through a spouse’s plan, then they are not an AEI. An individual is an AEI if they are on Medicaid or a marketplace/exchange plan. However, those who enroll in COBRA continuation with premium assistance will not be eligible for a premium tax credit on the exchange.
FAQ number 10 highlights an important caveat concerning eligibility for premium subsidies: individuals are not AEIs if their maximum COBRA continuation coverage period (if COBRA had been elected or not discontinued) would have ended before April 1, 2021. According to the FAQ, this generally means the COBRA subsidies will not apply to those individuals with applicable qualifying events before October 1, 2019.
The FAQs also clarify issues surrounding enrollment. Note that employers have until May 31, 2021, to provide notice to AEIs of their right to elect COBRA and receive subsidies under the ARPA. According to FAQ number 10, regular rules regarding COBRA notice distribution apply, including distribution by email. FAQ number 13 states that AEIs have 60 days from receipt of the notice to elect COBRA or they forfeit their right to elect COBRA subsidies. FAQ number 5 states that AEIs can choose to have prospective coverage from the date of election or, if they have a qualifying event on or before April 1, retroactive coverage to April 1. FAQ number 16 states that qualified beneficiaries who didn’t independently elect may do so now. Further, individuals who believe that they qualify for premium assistance need to complete and submit a form entitled Request for Treatment as an Assistance Eligible Individual, as well as an election form. And FAQ number 4 states that individuals may have a special enrollment period on the exchange after the subsidy ends.
The last major topic covered by the FAQs concerns enforcement of these requirements. According to both FAQ number 10 and FAQ number 12, employers who violate COBRA rules (including the requirement to offer a COBRA election and subsidies under the ARPA) could be subject to penalties equal to $100 per qualified beneficiary or $200 per family for every day that the employer violates COBRA rules. If individuals believe that they have not received an offer of COBRA due to them, then they are advised to contact the DOL.
Model Notices
The DOL also published four model notices: a “General Notice,” an “Alternative Notice,” a “Notice in Connection with Extended Election Periods” and a “Notice of Expiration of Period of Premium Assistance.”
The General Notice should be provided to all individuals who experience a qualifying event from April 1, 2021, through September 30, 2021. It includes information related to the premium assistance, and other rights and obligations under the ARPA, as well as all of the information required in an election notice. It also includes information on the health insurance marketplace, Medicaid and Medicare. The General Notice satisfies existing requirements for the content of a standard COBRA election notice as well as those required by the ARPA.
The Alternative Notice must be sent by issuers that offer group health insurance coverage subject to continuation coverage requirements imposed by state law that differ from those imposed by federal law (e.g., employers with fewer than 20 employees may be covered by certain state healthcare continuation laws). The Alternative Notice must be provided to all qualified beneficiaries, not just covered employees, who have experienced a qualifying event at any time from April 1, 2021, through September 30, 2021, regardless of the type of qualifying event. The Alternative Notice serves as a template that can be modified for each state’s requirements.
The Notice in Connection with Extended Election Periods must be distributed to AEIs (or any individual who would be an AEI if a COBRA continuation coverage election were in effect) who became entitled to elect COBRA continuation coverage before April 1, 2021. This notice covers the rights of AEIs to elect COBRA coverage as discussed above and provides them with the forms necessary to do so.
The Notice of Expiration of Period of Premium Assistance must be provided 15 – 45 days before the date of expiration of premium assistance and informs AEIs of the expiration and the date that the subsidies will expire. This notice must also provide information concerning eligibility for coverage without any premium assistance through either COBRA continuation coverage or coverage under a group health plan. This notice is not required if an AEI becomes eligible under a group health plan (excluding excepted benefits, a QSEHRA or a health FSA) or for Medicare. This notice may note that the individual and any covered dependents may be eligible for a special enrollment period to enroll in individual market health insurance coverage.
In addition to the specific requirements of each notice, the General Notice, the Alternative Notice and the Notice in Connection with Extended Election Periods must include the following information:
- A prominent description of the availability of premium assistance, including any conditions on the entitlement.
- A form to request treatment as an “Assistance Eligible Individual” (as discussed above).
- The name, address and telephone number of the plan administrator (and any other person with relevant information about the premium assistance).
- A description of the obligation of individuals paying reduced premiums who become eligible for other coverage to notify the plan and the penalty for failing to meet this obligation.
- A description of the opportunity to switch coverage options, if applicable.
The DOL also provided a PDF summarizing the COBRA premium assistance provisions of the ARPA, which includes the forms necessary to request treatment as an AEI.
Model Notices »
Summary of COBRA Premium Assistance Provisions under the American Rescue Plan Act of 2021 »
Related Materials
In addition to the FAQs and model notices, the DOL also linked to a number of publications that provide information on COBRA, retirement and health benefits for dislocated workers and those experiencing job loss, and HHS guidance on the ARPA.
Employers should familiarize themselves with this guidance as they prepare to comply with the ARPA COBRA provisions. The Benefits Compliance team expects that the federal government will provide more guidance in the coming weeks. We will continue to analyze subsequent guidance and provide resources to explain the continued developments.
DOL Issues FAQs Regarding Mental Health and Substance Use Disorder Parity CAA Implementation
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).
As background, the MHPAEA generally provides that financial requirements and treatment limitations imposed on a plan’s mental health or substance use disorder (MH/SUD) benefits cannot be more restrictive than those applicable to medical/surgical benefits in a classification. Furthermore, separate treatment limitations cannot be imposed only on MH/SUD benefits. These MHPAEA provisions apply to both quantitative treatment limitations, such as the number of doctor visits, and non-quantitative treatment limitations (NQTLs), such as preauthorization requirements, step protocols or experimental treatment limitations.
The CAA, which was enacted on December 27, 2020, requires group health plans and issuers to perform and document their comparative analyses of the design and application of any NQTLs imposed upon MH/SUD benefits. Effective February 10, 2021, plans must be prepared to provide the analyses to the Departments (or applicable state authorities or participants) upon request.
Accordingly, the FAQs explain that for an analysis to be treated as sufficient under the CAA, it must contain a detailed, written, and reasoned explanation regarding the bases for the plan’s conclusion that the NQTLs comply with the MHPAEA. FAQ #3 specifies that such analyses should include, but not necessarily be limited to:
- A clear description of the specific NQTLs, plan terms and policies at issue
- Identification of the specific MH/SUD and medical/surgical benefits to which the NQTLs apply within each benefit classification
- Identification of any factors, evidentiary standards or sources, or strategies or processes considered in the design or application of the NQTLs
- Precise definitions and supporting sources for any factors, standards, strategies or processes defined in a quantitative manner
- An explanation as to whether any factors were given more weight than others and the reason(s) for doing so, or whether there was any variation in the application of a guideline or standard used by the plan between MH/SUD and medical/surgical benefits
- If the application of the NQTL turns on specific benefit administration decisions, an identification of the nature of the decisions, the decision maker(s), the timing of the decisions and the qualifications of the decision maker(s)
- If the plan’s analyses relied upon any experts, an assessment of each expert’s qualifications and the extent to which the plan relied upon each expert’s evaluations in setting recommendations regarding both MH/SUD and medical/surgical benefits
- A reasoned discussion of the plan’s findings and conclusions as to the comparability of the processes, strategies, evidentiary standards, factors and sources within each affected classification, and their relative stringency, both as applied and as written
- The date of the analyses and the name, title and position of the person(s) who performed or participated in the comparative analyses
Employers are encouraged to refer to the MHPAEA Self-Compliance Tool, which is accessible on the DOL website, for guidance related to these NQTL requirements and the necessary analyses process. In particular, the Self-Compliance Tool outlines four steps that plans should take to assess their compliance with MHPAEA for NQTLs. The FAQs indicate that plans that have followed the guidance in the Self-Compliance Tool should be well prepared to satisfy a comparative analyses request.
Plans should also be prepared to provide applicable supporting documentation, such as claims processing policies and procedures, referenced studies or internal testing results.
In the near term, the DOL expects to focus on the following NQTLs in its enforcement efforts:
- Prior authorization requirements for in-network and out-of-network inpatient services
- Concurrent review for in-network and out-of-network inpatient and outpatient services
- Standards for provider admission to participate in a network, including reimbursement rates
- Out-of-network reimbursement rates (plan methods for determining usual, customary and reasonable charges)
However, the guidance makes clear that a review, once initiated, may not necessarily be limited to these particular NQTLs. Additionally, a comparative analysis may be requested if the Departments become aware of potential MHPAEA NQTL violations or complaints.
If a plan’s submission of a comparative analysis results in a determination that the plan is not in compliance with the MHPAEA, the plan would be required to submit additional comparative analyses that demonstrate compliance within 45 days. If the Departments make a final determination that the plan is still not in compliance following the 45-day corrective action period, all enrollees would need to be notified within seven days. In addition, the compliance findings would be shared with the state where the group health plan is located.
The FAQs also confirm that the comparative analyses and other applicable information should be made available to ERISA plan participants, beneficiaries and enrollees upon request. Additionally, in the event of a claim appeal, a participant’s right to documents and information would include the MHPAEA analyses and related materials, if relevant to the adverse benefit determination.
Employers that sponsor plans offering MH/SUD benefits should be aware of the enhanced MHPAEA compliance obligations imposed by the CAA and this related guidance. These employers should ensure that NQTL comparative analysis is performed and documented for each NQTL under their plans and be prepared to provide the required comparative analyses upon request. Consultation with carriers and/or TPAs will likely be necessary to verify and coordinate the necessary data to complete the analyses. Employers should refer to the DOL MHPAEA Self-Compliance Tool and consult with counsel for further guidance.
Retirement Update
IRS Lists Top Mistakes in Voluntary Correction Program Submissions
The IRS has issued a summary of the top mistakes made by plan administrators utilizing the Voluntary Correction Program (VCP). As a reminder, the VCP is a way for retirement plans to receive IRS approval on corrections to plan documents or operational failures that would otherwise jeopardize the plan's tax-favored or qualified status. Thus, it is important the submission is free of errors to avoid denial of the submission or a delayed approval.
The top errors include:
- Failure to combine PDF documents into a single PDF file that does not exceed 15MB
- Failure to pay the correct VCP user fee, which is based on plan assets or listing an incorrect bank account/routing number
-
Incorrect completion of Pay.gov Form 8950
- The name of the plan sponsor doesn't match the name on the other documents in the submission
- Incorrect EIN provided
- An officer of the plan sponsor didn't sign the form
-
Insufficient narrative provided
- The descriptions of the failure(s) or corrective changes are not detailed enough
- The submission does not identify a plan qualification failure under IRC Section 401(a)
- Failure to include a copy of the plan document
Please see the guidance for a complete discussion and for helpful resources including instructional videos and helpline numbers.
Announcements
Reminder: 2020 HSA Contributions and Corrections Deadline May 17
Individuals who were HSA-eligible in 2020 have until the tax filing deadline to make or receive contributions. The IRS recently extended the 2020 tax-filing deadline, so 2020 HSA contributions must generally be made by May 17, 2021. This includes employer contributions. The 2020 contribution limit is $3,550 for self-only coverage and $7,100 for any tier of coverage other than self-only. Those aged 55 and older are permitted an additional catch-up contribution of $1,000. An individual’s maximum annual contribution is limited by the number of months they were eligible for the HSA.
There is an exception to this rule. An individual that was HSA eligible on December 1 is permitted to contribute the full statutory maximum for the year. However, if eligible employees do not remain HSA eligible through December of the following year, they may experience tax consequences.
Individuals who contributed more than the allowable amount for 2020 should be refunded the excess contributions and associated interest by May 17, 2021. The excess would be subject to income tax. If the excess is not refunded from the account, it will not only be subject to income tax, but also a 6% excise tax penalty. If an employer is aware of an employee who was not eligible for a contribution or who has contributed more than the allowable amount for 2020, they should work with the HSA bank/trustee to process the excess contribution.
FAQ
FAQ: How do the ARPA COBRA subsidies interact with the extension of certain timeframes relief?
While both types of relief could apply to an employee who has experienced a reduction in hours or involuntary termination, the application of the provisions differ.
The COBRA subsidies provided through the American Rescue Plan Act of 2021 (ARPA) allow 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. (We first discussed this provision in the March 18, 2021, edition of Compliance Corner.) The extension of certain timeframes for employee benefit plans, participants and beneficiaries required plans to disregard the period from March 1, 2020, until 60 days after the end of the National Emergency (known as the “Outbreak Period”) for certain deadlines, including the deadlines applicable to COBRA notices and payment. (We first discussed this provision in the May 14, 2020, edition of Compliance Corner.)
Employees who were due an offer of COBRA under the extensions of certain timeframes continue to have the opportunity to elect COBRA based on the date of their termination or reduction in hours. Specifically, the most recent guidance on this subject indicated that the relief under these extensions will continue until the earlier of a) one year from the date an individual or plan is first eligible for relief or b) 60 days after the announced end of the national emergency (the end of the outbreak period). Since the national emergency has yet to end, some individuals will be entitled to this relief at the same time that they are entitled to elect COBRA under the ARPA.
There are a few distinctions to be made, though. First, the extensions of certain timeframes applies to all COBRA-qualified beneficiaries, while the ARPA COBRA subsidies only apply to those who were involuntarily terminated or experienced a reduction in hours. So while individuals whose COBRA was triggered by divorce, death or aging off of the plan continue to have an extended time period by which they can elect COBRA, they are not eligible for the COBRA election and subsidies provided by the ARPA.
Second, the election of COBRA under the two provisions takes effect differently. Under the ARPA, individuals who were involuntarily terminated or had their hours reduced going back as far as October 2019 may now elect COBRA (even if they waived it, or elected and dropped it before). As long as they are not eligible for Medicare or other group health plan coverage, the relief provided through ARPA will allow for them to elect that COBRA prospectively, and receive a subsidy from April 1, 2021, through September 30, 2021, as long as there are still months left in their 18-month COBRA maximum duration period.
On the other hand, individuals who are eligible for relief under the extension of certain timeframes could potentially elect COBRA, but would need to elect and pay for the coverage retroactively back to the date of their COBRA-triggering event. In other words, the relief provided under that guidance allows employers to require that the coverage be instated retroactively. Individuals who are eligible for this relief also can likely elect COBRA through the end of the outbreak period even if they are eligible for Medicare or other group health coverage.
Third, the DOL’s most recent guidance on the ARPA COBRA subsidies makes it clear that the extensions of timeframes guidance does not affect the COBRA notice requirements under the ARPA. As discussed in an article in this edition of Compliance Corner, employers only have until May 31, 2021, to notify assistance-eligible individuals (AEIs) of their right to elect COBRA and receive subsidies under the ARPA. That time is not extended by the extensions of timeframes. Likewise, AEIs only have 60 days to elect COBRA under the ARPA; if they do not do so, they waive their opportunity to elect COBRA and receive subsidies.
So while it is possible for both pieces of guidance to apply to certain individuals, their effect and application will be different. Consider the following example of an employee who was terminated in December 2020:
Amy was involuntarily terminated in December 2020 and would have the right to elect COBRA, effective beginning January 2021. She does not elect COBRA.
Under the extension of certain timeframes, Amy would have until the earlier of the end of the outbreak period or one year from the date she was first granted relief (January 2022) to elect COBRA. If she chose to do so, she would have to pay for COBRA going back to January 2021.
Under the ARPA, Amy should receive a notice from her previous employer by May 31, 2021, notifying her of the right to elect COBRA and receive a subsidy from April 1, 2021, through September 30, 2021. As long as Amy is not eligible for Medicare or other group health plan coverage, she could elect COBRA prospectively and receive 100% subsidized COBRA for the entirety of the subsidy period (since her COBRA maximum duration period would not be over until June 30, 2022).
State Updates
California
April 13, 2021
COVID-19 Supplemental Paid Sick Leave
On March 9, 2021, Gov. Newsome signed SB 95 into law, requiring employers to provide supplemental paid sick leave to eligible employees. The law applies to employers with 26 or more employees. Unfortunately, neither the new law nor subsequent guidance clarified which employees have to be counted toward the 26-employee threshold. If we look conservatively to how California administers their other laws, all employees working for the employer nationwide would be counted.
Employees are eligible for paid leave for the number of hours they typically work in a two-week period up to 80 hours. The leave allotment is in addition to any normal PTO, paid leave, or mandated safe and sick leave.
The reasons for leave are:
- The covered employee is subject to a quarantine or isolation period related to COVID-19 as defined by an order or guidelines of the State Department of Public Health, the federal Centers for Disease Control and Prevention, or a local health officer who has jurisdiction over the workplace.
- The covered employee has been advised by a healthcare provider to self-quarantine due to concerns related to COVID-19.
- The covered employee is attending an appointment to receive a vaccine for protection against contracting COVID-19.
- The covered employee is experiencing symptoms related to a COVID-19 vaccine that prevent the employee from being able to work or telework.
- The covered employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis.
- The covered employee is caring for a family member, who is subject to an order or guidelines described in subparagraph A or who has been advised to self-quarantine, as described in subparagraph B. Family member for this purpose is defined as: child (biological, adopted, foster, stepchild, legal ward or a child to whom the employee stands in loco parentis); parent (biological, adoptive, foster, stepparent or legal guardian of an employee or the employee's spouse or registered domestic partner, or a person who stood in loco parentis when the employee was a child); spouse; registered domestic partner; grandparent; grandchild; and sibling.
- The covered employee is caring for a child whose school or place of care is closed or otherwise unavailable for reasons related to COVID-19 on the premises.
Employees should be paid their normal rate of pay while on leave up to a maximum of $511 per day.
The law is effective retroactively back to January 1, 2021, and is in effect through September 30, 2021. Many counties and cities across the state of California have enacted their own COVID-19-related leave laws, which means that employers will need to make sure that their policies comply with both state and local laws. Remember, federal FFCRA emergency paid sick leave and expanded FMLA are currently optional for an employer. If an employee's leave qualifies under both state/local and federal, the employer would be able to receive a federal payroll tax credit.
Employers should update their leave policies, make adjustments to their payroll systems, post the required notice and communicate to employees as soon as possible.
California SB 95 »
Required Poster »
2021 COVID-19 Supplemental Paid Sick Leave FAQs »
Colorado
April 13, 2021
State Insurance Exchange Special Enrollment Period Extended
In response to the extension of the special enrollment period (SEP) in the federal marketplace exchange, the state’s health insurance marketplace (Connect for Health Colorado) has extended its special open enrollment period to August 15, 2021.
While the creation of the SEP will affect individuals that will enroll on the marketplace, employers should be mindful of this extension in case there are employees who seek to drop coverage under their plans to take advantage of the SEP. Specifically, the permissible qualifying event for a revocation due to enrollment in a qualified plan will allow an employee to drop their employer’s plan mid-year if they intend to enroll in the marketplace. Unless future legislation or guidance indicates otherwise, applicable large employers are still required to offer full-time employees minimum value coverage satisfying one of the affordability safe harbors.
Idaho
April 13, 2021
Extension of Exchange Special Enrollment Period
On March 30, 2021, Director Cameron released Bulletin No. 21-02, extending the special enrollment period (SEP) on the state exchange as a part of Idaho’s ongoing response to the COVID-19 pandemic and following the passage of the American Rescue Plan Act of 2021. The SEP will now be in effect through April 30, 2021. As background, individuals may usually only elect coverage through the state exchange (Your Health Idaho) during open enrollment or special enrollment periods.
During this SEP, individuals can apply for coverage through the exchange or directly through carriers. The state also requests that carriers allow the SEP in off-exchange individual health benefit plans. The SEP does not allow currently enrolled individuals to change carriers or metal levels unless they have another qualifying event. Coverage selections made between April 1, 2021, and April 30, 2021, will be effective on May 1, 2021.
Although this change affects the individual market, employers should keep this in mind as it would likely create a qualifying event that would allow for an employee to potentially drop employer coverage (for themselves or their dependents) to go on the Idaho exchange.
Indiana
April 13, 2021
Extended Relief for Non-ACA-Compliant Small Group and Individual Policies and Plans
On March 31, 2021, Insurance Commissioner Robertson released Bulletin 258, extending the ability of health insurance carriers in the individual and small group market to continue transitional health insurance plans that renew for a policy year starting on or before October 1, 2022, as long as the transitional policy ends by December 31, 2022.
As background, on January 19, 2021, CMS provided guidance for a transition policy extension that allows insurers the option to renew non-grandfathered non-ACA-compliant plans, if the state allows for such an extension. Such transition policies are not required to comply with certain ACA mandates including community rating, coverage of essential health benefits, prohibition on pre-existing condition exclusions and the annual out-of-pocket maximum limit. This bulletin applies this most recent federal extension to Indiana and allows the issuer to renew these non-ACA compliant plans.
Small employers that are interested in renewing their non-ACA-compliant plan should work with their advisors and insurers.
Kansas
April 13, 2021
Expanded Use of Telemedicine
Effective April 1, 2021, Senate Bill 283 (S.B. 283) continues the state's response to the ongoing COVID-19 public health emergency by extending the expanded use of telemedicine, among other items. Of note, physicians are now able to issue a prescription for a controlled substance without conducting an in-person examination. In addition, a physician under quarantine may practice telemedicine, as can out-of-state physicians without having a Kansas license (meeting certain requirements).
This new law is not directed at employers, but it does provide additional support for the use of telemedicine by plan participants.
Michigan
April 13, 2021
Update to Special Enrollment Period for Issuers Offering Individual Coverage
On March 29, 2021, the Department of Insurance and Financial Services (DIFS) issued Bulletin 2021-18 reminding issuers that DIFS will allow issuers offering ACA-compliant individual health coverage outside of the marketplace to participate in the Special Enrollment Period (SEP) to the same extent as issuers offering ACA-compliant individual coverage on the marketplace. This is not new guidance; rather, Bulletin 2021-18 supersedes Bulletin 2021-08 (previously reported on in the February 17, 2021, edition of Compliance Corner).
This information may continue to be of use to employees who have not been able to enroll in other coverage. As a reminder, this SEP for non-exchange coverage would likely not give rise to a qualifying event that would allow employees to terminate their employer group health plan coverage. It’s also important to note that these private health plans often meet ACA requirements, but consumers would not qualify for premium tax credits in order to help pay for them.
Minnesota
April 13, 2021
State Insurance Exchange Special Enrollment Period Extended
In response to the changes made to the premium tax credits by the American Rescue Plan Act, the state’s health insurance marketplace (MNsure) has extended its special open enrollment period (SEP) to July 16, 2021. This extension is occurring since premium tax credits have lowered premiums for a greater number of people; the state anticipates that the demand to enroll on the marketplace will rise.
While the creation of the SEP will affect individuals that will enroll on the marketplace, employers should be mindful of this extension in case there are employees who seek to drop coverage under their plans to take advantage of the SEP. Specifically, the permissible qualifying event for a revocation due to enrollment in a qualified plan will allow an employee to drop their employer’s plan mid-year if they intend to enroll in the marketplace. Unless future legislation or guidance indicates otherwise, applicable large employers are still required to offer full-time employees minimum value coverage satisfying one of the affordability safe harbors.
Nevada
April 13, 2021
State Insurance Exchange Special Enrollment Period Extended
In response to the changes made to the premium tax credits by the American Rescue Plan Act, the state’s health insurance marketplace (Nevada Health Link) has extended its special open enrollment period (SEP) to August 15, 2021. This extension is occurring since premium tax credits have lowered premiums for a greater number of people; the state anticipates that the demand to enroll on the marketplace will rise.
While the creation of the SEP will affect individuals that will enroll on the marketplace, employers should be mindful of this extension in case there are employees who seek to drop coverage under their plans to take advantage of the SEP. Specifically, the permissible qualifying event for a revocation due to enrollment in a qualified plan will allow an employee to drop their employer’s plan mid-year if they intend to enroll in the marketplace. Unless future legislation or guidance indicates otherwise, applicable large employers are still required to offer full-time employees minimum value coverage satisfying one of the affordability safe harbors.
New Mexico
April 13, 2021
State Insurance Exchange Special Enrollment Period Extended
On March 24, 2021, Superintendent Toal announced that the state’s insurance exchange extended the special enrollment period (SEP) for enrolling in health plans to August 15, 2021. The original SEP was discussed in the March 4, 2021, edition of Compliance Corner.
While the creation of the SEP will affect individuals that will enroll on the marketplace, employers should be mindful of this extension in case there are employees who seek to drop coverage under their plans to take advantage of the SEP. Specifically, the permissible qualifying event for a revocation due to enrollment in a qualified plan will allow an employee to drop their employer’s plan mid-year if they intend to enroll in the marketplace.
Washington
April 13, 2021
COVID-19 Testing and Telehealth Rules Extended
On April 2, 2021, Commissioner Kreidler extended Emergency Order No. 20-02 until May 2, 2021, requiring that COVID-19 testing be provided without cost sharing or preauthorization and that insurers provide increased flexibility regarding the use of telemedicine.
Employers can notify their plan participants that may still need to receive testing that the testing will continue to be provided without cost sharing and that telemedicine will still be available.
Wisconsin
April 13, 2021
Commissioner Encourages Insurers to Open Special Enrollment Periods Parallel to Federal Marketplace
On April 2, 2021, Commissioner Afable issued a bulletin noting the announcement that the federal health exchange’s three-month special enrollment period from February 15, 2021, through May 15, 2021, is extended to August 15, 2021. In this bulletin, the commissioner encouraged insurers to extend any special enrollment periods for health insurance products opened outside the marketplace to August 15, 2021, as well.
This information may be of use to employees who have not been able to enroll in other coverage. However, this SEP for non-exchange coverage would likely not give rise to a qualifying event that would allow employees to terminate their employer group health plan coverage. It’s also important to note that these private health plans often meet ACA requirements, but consumers would not qualify for premium tax credits in order to help pay for them.
Employers with employees in the state should be aware of this development.
This material was created by PPI Benefit Solutions to provide accurate and reliable information on the subjects covered but should not be regarded as a complete analysis of these subjects. It is not intended to provide specific legal, tax or other professional advice. The service of an appropriate professional should be sought regarding your individual situation. PPI does not offer tax or legal advice. "PPI®" is a service mark of Professional Pensions, Inc., a subsidiary of NFP Corp. (NFP). All rights reserved.
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How do the ARPA COBRA subsidies interact with the extension of certain timeframes relief?
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