I’m Just Waiting on an… End to the Extended ERISA Deadline Periods

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by Brenda Berg

Early in the pandemic, the IRS and DOL issued a temporary rule (published May 4, 2020) extending certain deadlines applicable to retirement plans and health and welfare plans. (See Deadlines and Commitments: DOL and IRS Temporary Rule for COVID for more information about that extension.) Under that temporary rule, the deadlines were generally extended until 60 days after the announced end of the National Emergency due to COVID-19, which was referred to as the “Outbreak Period.” The deadlines are essentially “tolled” during the Outbreak Period. The National Emergency began on March 1, 2020, as declared by President Trump’s Proclamation.

The examples in the temporary rule assumed an end date of April 30, 2020 for the National Emergency, which would have extended the Outbreak Period through June 29, 2020. As we all now know, this National Emergency did not end on April 30, and in fact it is still in place. So we are still waiting for the National Emergency period to end and trigger the normal deadlines.

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Well The Leaves Have Come to Turning… And It’s Notice Time Again

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by Lyn Domenick

October brings with it the approach of year-end notices and open enrollment for 2021 health & welfare benefits. While open enrollment for your organization may be a month or so away, October 15 is the deadline for distribution of the Medicare Part D Notice which certifies whether a group health plan’s prescription drug coverage pays out at least as much as the standard coverage under a Medicare prescription drug plan. Most employer sponsored group health plans that provide prescription drug benefits are subject to the notice requirement mandated by the Centers for Medicare and Medicaid Services (CMS). Rather than trying to identify the Medicare Part D eligible individuals who must receive the required notice, many employers choose to simply distribute the Medicare Part D Notice to all of its employees who are enrolled in or eligible for the employer’s prescription drug coverage. CMS has model notices on its website which have not changed substantially since inception of the notice requirement.

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If a Tree Falls in the Forest – Employee Benefits in Mergers and Acquisitions Workforce Integration

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by John Ludlum

We are aware of several business studies that conclude that a high percentage, between 70-90%, of corporate acquisitions fail to meet their business objectives. When looking at why the time, effort, and expense invested in a corporate acquisition turn out not to achieve the business synergies and value creation that were expected, it is apparent that workforce integration and commitment after the transaction closes often is a contributing factor to why these acquisitions fail.

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Wait a Minute Mr. Postman . . . COBRA Litigation Update

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by Kevin Selzer

We have been monitoring an increase in litigation relating to COBRA election notices in recent months.  The plaintiffs in these cases allege that COBRA election notices are deficient, and as a result, the plaintiffs, on a class basis, should be awarded a $110/per day per participant penalty (among other relief).  Many of these cases allege deficiencies on notices that are substantially similar to the Department of Labor’s model notice. 

While none of these cases have fully worked through the courts, a number have settled for significant sums.  The settlement success has predictably spurred more complaints and suits.

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Governor Polis Signs New Paid Sick Leave Law for All Colorado Employees

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By Bradford Williams

On July 14, 2020, Colorado Governor Jared Polis signed into law the Healthy Family and Workplaces Act passed by the Colorado General Assembly during its recently concluded legislative session in June 2020. The new law mandates that nearly all employees working for public and private employers in Colorado must begin accruing at least one hour of paid sick leave for every 30 hours worked, up to 48 hours total, which balance shall carryover year-to-year subject to the limit. This requirement goes into effect for covered employers with 16 or more employees on January 1, 2021, and for all other covered employers (regardless of how many employees they employ) on January 1, 2022.

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Into the Mystic . . . Employee Benefit Considerations for Returning Workers

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by Kevin Selzer

Many employers are venturing into uncharted waters as significant numbers of employees are being rehired or returning from extended leaves of absence (e.g., furloughed employees). In this environment, it can be easy to overlook the employee benefit plan implications of this workforce shift. Below are some best practices for employers faced with employees returning to work.

Ensure that retirement plans are crediting service for returning employees correctly. In most cases, employers will not be able to treat a rehired employee as a new employee for retirement plan purposes. This means that the employer will have to consider the employee’s prior service for purposes of determining proper eligibility and vesting credit. This is a good time for employers to check and confirm that any systems that track service (e.g., payroll systems and the retirement plan administrator’s systems) are configured correctly to credit prior service.

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I Will Be Here When You Are Ready, To Roll With The Changes . . . IRS Releases Section 125 Cafeteria Plan Tax Relief

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by Rebecca Hudson and Lyn Domenick

In response to the global novel coronavirus pandemic, the Internal Revenue Service released guidance to allow temporary changes to section 125 cafeteria plans.  These changes provide increased flexibility to employees to make mid-year election changes and take advantage of grace period extensions.  It also increases the amount of carry-over allowed for health flexible spending arrangements (FSAs).  Plan sponsors may elect to implement some or all of these optional changes which would apply to all employees, not only those who are directly impacted by the pandemic.

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Relief . . . Just a Little Bit – IRS Notice 2020-23: Limited Extensions of Form 5500

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By Kevin Selzer and Lyn Domenick

In the midst of everything going on, we wanted to point out a few “under the radar” implications of IRS Notice 2020-23.  The Notice, issued on April 9th, provides that tax-related deadlines that fall between April 1, 2020 and July 14, 2020 (the “delay period”) are automatically extended to July 15, 2020. 

Delayed 5500s.  Most plan sponsors hoping for Form 5500 relief will have to wait for additional guidance since only a small group of plans have Form 5500 deadlines fall during the delay period.  For example, the regular Form 5500 due date for calendar year plans (July 31st) falls just outside of the delay period.  We note that the DOL has authority under the CARES Act to provide additional Form 5500 relief.

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COVID-19: Developments in Employee Benefits

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By Kevin Selzer

Health Plan Coverage of COVID-19. Colorado has become the latest state to instruct insured health plans to cover COVID-19 testing and benefits (such as office visits) at no cost to the member. The Colorado guidance is available here. The directive also encourages promotion of telemedicine programs and easing restrictions on prescription refills. Other states that have similar directives include California, Oregon, Washington, and New York. Employers sponsoring insured health plans in these states and Colorado should work with their insurer to confirm that these requirements are being met.

The IRS also clarified in Notice 2020-15 that the cost of testing for or treatment of COVID-19 will not be disqualifying coverage with respect to health savings account (HSA) eligibility for individuals covered by a high deductible health plan (HDHP).

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You’ve Got Another PCORI Fee Coming!: Congress revives the PCORI fee and filing obligations

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by Bret Busacker

In the wee hours of December 2019, Congress revived the PCORI fee and filing obligations of employer sponsors of self-insured group health plans.

In accordance with the requirements of the Affordable Care Act, employer sponsors of self-insured group health plans were required to file an IRS Form 720 and pay the Patient-Centered Outcomes Research Institute fee (PCORI) by July 31st of the year following last day of the plan year end (e.g., December 31, 2018 Plan Year End; employers should have filed the Form 720 by July 31, 2019). 

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