Agencies Extend Deadline to Pay COBRA Premiums and Certain Other ERISA and Internal Revenue Codes Due to COVID-19

Posted on April 30th, 2020

The impacts of the COVID-19 National Emergency, as declared by President Trump on March 13, 2020, have been vast.  As a result, many employers and employees are struggling to meet their various filing, notice, election, or other deadlines.  In order to ease this burden on employers, plans and participants, on April 28, 2020, the Department of Labor (DOL), the Internal Revenue Service (IRS), and Department of Health and Human Services (HHS) issued much needed guidance and relief. Notably, the guidance requires employers and plans to suspend the deadline for qualified beneficiaries to elect COBRA or pay COBRA premiums from March 1, 2020 until 60 days after the National Emergency ends (or such other date as specified by the Agencies)

DOL Relief for Group Health Plans and Disability and Other Welfare Plans

EBSA Disaster Relief Notice 2020-01, eases the burden for group health plans, disability plans, and pension plans to provide notices and disclosures required under ERISA and Internal Revenue Code of 1986 (the “Code”) by clarifying, among other things, that:

  • Neither the plan nor the employer will violate ERISA for failing to timely furnish a notice, disclosure, or document that must be furnished between March 1, 2020, and 60 days after the announced end of the COVID-19 National Emergency, if they act in good faith and make the disclosure as soon as administratively practicable under the circumstances.
  • Plans and employers may communicate electronically with plan participants and beneficiaries who they reasonably believe have effective access to electronic means of communication, including email, text messages, and continuous access websites.
  • Filing relief for Form 5500 applies per IRS Notice 2020-23, which was issued earlier this month.  IRS Notice 2020-23 provides that employers with plan years ending September 30, 2019, October 31, 2019, or November 30, 2019 have until July 15, 2020 to file Form 5500.  The deadline for calendar year plans has not been extended, though plans may file a Form 5558 by July 31, 2020 to have the deadline automatically extended an additional 2.5 months, to September 15, 2020.

EBSA Notice 2020-01 also includes general ERISA fiduciary compliance guidance, asking plans to “act reasonably, prudently, and in the interest of the covered workers and their families who rely on their health, retirement, and other employee benefit plans for their physical and economic well-being.”  The DOL requests that plans make reasonable accommodations to prevent the loss of benefits or undue delay in paying benefits.

Finally, the Notice clarifies that relief may be further extended in specific regions of the country if there are different outbreak period end dates for different parts of the country.

Relief for Participants and Beneficiaries

In order to ease the burden on participants and beneficiaries, the DOL, in coordination with the IRS issued a Final Rule extending certain timeframes and deadlines for participants to consider coverage elections and benefits decisions under ERISA and the Code. 

Specifically, Final Rule provides plan participants, beneficiaries, qualified beneficiaries, and claimants with relief from meeting the below referenced periods and dates during the period of March 1, 2020 until 60 days after the announced end of the COVID-19 National Emergency (or such other date announced by the Agencies in a future notice):

  • The 30-day period (or 60-day period, if applicable) to request a special enrollment;
  • The 60-day election period for COBRA continuation coverage;
  • The date/deadline for making COBRA premium payments;
  • The deadline for individuals to notify the plan of a qualifying event or determination of disability;
  • The deadline within which employees can file a benefit claim, or a claimant can appeal an adverse benefit determination, under a group health plan’s or disability plan’s claims procedures;
  • The deadline for claimants to file a request for an external review after receipt of an adverse benefit determination or final internal adverse benefit determination; and
  • The deadline for a claimant to file information to perfect a request for external review upon finding that the request was not complete.

Consistent with the above, the Final Rule provides group health plans with relief from issuing COBRA election notices for any qualifying event that occurred between March 1, 2020, and 60 days after the announced end of the COVID-19 National Emergency (or such other date announced by the Agencies in a future notice).

Neither the Final Rule nor EBSA Notice 2020-01, provide guidance regarding the applicable PCORI fee amount for plan years ending after October 1, 2019, extend the PCORI fee deadline (currently July 31, 2020), or modify permitted cafeteria plan election changes.

Employers are encouraged to familiarize themselves with the relief in the Final Rule and EBSA Notice 2020-01, work with their insurance broker, COBRA administrator or other vendors to ensure compliance with this relief, and continue to work with their employees during this difficult time.

The information provided in this alert is not, is not intended to be, and shall not be construed to be, either the provision of legal advice or an offer to provide legal services, nor does it necessarily reflect the opinions of the agency, our lawyers or our clients.  This is not legal advice.  No client-lawyer relationship between you and our lawyers is or may be created by your use of this information.  Rather, the content is intended as a general overview of the subject matter covered.  This agency and Marathas Barrow Weatherhead Lent LLP are not obligated to provide updates on the information presented herein.  Those reading this alert are encouraged to seek direct counsel on legal questions.

© 2020 Marathas Barrow Weatherhead Lent LLP.  All Rights Reserved.

COVID-19 and Cafeteria Plan Considerations

Posted on April 27th, 2020

This legal alert was updated May 13, 2020.

A cafeteria plan, or Section 125 plan, sometimes referred to as a POP plan, allows employees to pay for certain expenses on a pretax basis. Employees choose between a taxable benefit (cash, typically distributed via payroll) and two or more pre-tax qualified benefits. Just like standing in line at a cafeteria and selecting a salad, a plate of meatloaf, and a carton of milk, employees can “stand in line” and select health insurance, vision insurance, and dental insurance – and more! The IRS limits the benefits that can be offered through a cafeteria plan.

  • Coverage under an accident or health plan (traditional health insurance, self-insured reimbursement plans, dental, vision, etc.)
  • Health care expense reimbursement plans (FSAs)
  • Dependent care assistance benefits
  • Paid time off
  • Adoption assistance benefits
  • Health savings accounts (HSAs)
  • Group term life
  • 401(k) contributions

 

Employees can make elections and select which of the offered benefits they would like to enroll in. Employees can choose to cover other individuals, including spouses and dependents, if the employer’s plan allows. These elections are prospective, with an exception for birth, adoption and placement for adoption as well as new hires, when the employer’s plan does not impose a waiting period for new employees. The IRS considers pretax elections to generally be irrevocable unless a permitted event occurs or there is an exception. These events sometimes overlap and fall into three general categories, HIPAA special enrollment events, change in status events, and other triggering events.

A plan sponsor is not required to recognize any midyear changes to pretax elections. However, for practical purposes, because HIPAA requires group health plans to provide a special enrollment opportunity to an employee upon the occurrence of specific events (e.g. marriage, birth, adoption, etc.)¹ most plan sponsors at a minimum will design their plan to recognize HIPAA special enrollment events, permitting changes to pretax elections midyear. All of the events however are optional, and a plan sponsor must ensure their plan documents affirmatively indicate which of the events are recognized.

QUALIFYING EVENTS

Gain dependent(s) due to marriage

Employee or dependent becomes entitled to Medicare or Medicaid

Employee/dependent status change results in gaining eligibility under the plan (e.g., new job; part-time to full-time)

Plan makes SIGNIFICANT cost change

Plan makes automatics small cost change(s)

Lose spouse (e.g., divorce, legal separation, death of spouse)

Employee or dependent becomes entitled to premium assistance subsidy for Medicaid or CHIP

Employee/dependent employment change results in losing eligibility under employer plan (e.g., full to part-time; unpaid leave)

Plan makes SIGNIFICANT curtailment in coverage

Other employer's plan increases/decreases/ceases coverage

Gain/lose child (e.g., birth adoption or placement for adoption/death)

Employee or dependent loses entitlement for Medicare, Medicaid, or CHIP

Employee hours of reduced to average less than 30 hours a week

Plan eliminates/adds new benefit or coverage option

Other employer's plan offers open enrollment

Dependent loses/gains eligibility (e.g., child reaches age limit/becomes student after age 26)

Change in residence triggers gain/loss eligibility (e.g., move in/out of a plan services area

Employee becomes eligible to enroll in a QHP in the Marketplace

Order requiring plan to add child(ren) to health plan coverage

Order requiring another employer's plan to add child(ren) to health plan coverage

 

The following situations are not cafeteria plan qualifying events:

  • Change in employee’s finances
  • Change in employee’s medical condition (worsens/heals)
  • Provider leaves network, unless it results in a significant reduction of coverage (e.g., the only gastroenterologist in the network leaves)
  • Legal separation, unless it causes the spouse to lose eligibility under the terms of the plan. (Many plans eligibility isn’t lost until divorce is final.)
  • Commencement of domestic partner relationship
  • Dependent or spouse leaves/returns from prison/jail, unless it causes the individual to lose HMO eligibility due to change in residence

On May 12, 2020, the IRS issued Notice 2020-29 which, among other things, allow employees to amend their cafeteria plans to permit employees to make mid-year changes for the following purposes:

  • For employer-sponsored health coverage:
    • Make a new, prospective election if the employee had previously declined coverage;
    • Revoke an existing election and make a new, prospective election to enroll in different health coverage sponsored by the employer; or
    • Prospectively revoke coverage if the employee attests in writing that they are enrolled in, or immediately enroll in, other health coverage not sponsored by the employer. The Notice provides a sample attestation employers can use and may rely on the written attestation unless the employer has actual knowledge the employee is not, or will not be, enrolled in other comprehensive health coverage.
  • For FSA coverage:
    • Prospectively revoke an election, make a new election, or decrease or increase an election to a health FSA (including a limited purpose health FSA) or DCAP.

Notice 2020-29 provides that employers may amend their plans to allow each eligible employee to make prospective election changes or an initial election regardless of whether the election change satisfies one of the permitted election changes under applicable Treasury regulations. The Notice is very clear that this is not a free-for-all. The employer has the discretion to impose parameters for these election changes, including the extent to which the election changes are permitted and applied, and they can limit the period during which election changes may be made.

The relief may be applied retroactively to January 1, 2020; however, as set forth above, all election changes must be prospective. The retroactive application of the relief is to cover any employer who may have allowed an election change that may not have been consistent with Section 125 (but would be consistent with one of the permitted election changes discussed above).

Finally, employers must ensure the election changes do not result in failure to comply with the nondiscrimination rules. The Notice provides strategies an employer may use to ensure there is no adverse selection of health coverage, such as limiting elections to circumstances in which an employee’s coverage will be increased or improved as a result of the election change (ex. switching from self-only to family coverage).

For more COVID-19 legal alerts, please visit our resource center at jmjwebconsulting.com/coronavirus/#legalalerts.

If you have any questions related to this alert, please reach out to your Alera Group advisor or email us at info@aleragroup.com to be connected with your local firm.

 

¹Special Enrollment rights are not required for “HIPAA-excepted benefits” which generally include stand-alone dental, vision and most health care FSAs.

 

The information contained herein should be understood to be general insurance brokerage information only and does not constitute advice for any particular situation or fact pattern and cannot be relied upon as such. Statements concerning financial, regulatory or legal matters are based on general observations as an insurance broker and may not be relied upon as financial, regulatory or legal advice. This document is owned by Alera Group, Inc., and its contents may not be reproduced, in whole or in part, without the written permission of Alera Group, Inc. Reviewed as of 05/13/2020.

Weekly Wrap-up: Wellbeing Resources

Posted on April 27th, 2020

COVID-19 has brought many new challenges to the way we communicate with our coworkers, friends and family.  Never has listening been more important than it is right now.  As we focus on listening fully, listening with focus and listening with the true intent to understand and not just hear, the common threads we are hearing from employees are paving the way for the next developments in your wellbeing programs.  Please continue to keep in touch on the needs and concerns of your teams and we will do our best to work with you on solutions. 

Have a safe and healthy week!

Career Wellbeing

  • How to Stay Focused and Productive When Working From Home – We’ve all seen the basic tips at this point but there are a few new simple tips in here that are worth considering in order to do your best work at home.
  • Coursera – Another great resource which includes a variety of free courses to further develop yourself.

Social & Family Wellbeing

Social

Family

Financial Wellbeing

Physical Wellbeing

  • The Best At-Home Workouts on Instagram – Top influencers in a variety of disciplines are putting out fresh content each week.  Try something new and free this week.
  • A Functional Medicine Approach to COVID-19 – Dr. Mark Hyman, Head of Strategy and Innovation at the Cleveland Clinic Center for Functional Medicine gives functional medicine tips on nutrition and supplements during COVID-19. 

Emotional Wellbeing

  • Headspace for NY’ers (and everyone else) – In partnership with Governor Cuomo (NY), Headspace has released a variety of free meditations.  The good news is, they are still free even if you aren’t a NY’er!
  • 4-7-8 Breathing – Watch this quick video to learn this simple stress antidote.
  • If you or someone you care about feels overwhelmed with emotions like sadness, depression or anxiety, or like you want to harm yourself or others call 911.  You can also contact the Substance Abuse and Mental Health Service Administration’s (SAMHSA) Disaster Distress Helpline at 800-985-5990, the National Suicide Prevention Lifeline at 800-273-8255 or text MHFA to 741741 to talk to a Crisis Text Line counselor.

Community Wellbeing

  • Provide Funds to American Families that Need It Most – GiveDirectly’s Covid-19 cash program. GiveDirectly has partnered with Propel, a company that works on benefit delivery to recipients of the Supplemental Nutrition Assistance Program (SNAP, a.k.a. food stamps), to identify SNAP recipients and direct money to them.  Each household gets $1,000 as a one-time payment. As of this writing, GiveDirectly reports having helped 3,200 families, and given a total of $3.5 million. Google announced a $2 million gift (half from the company itself, half from CEO Sundar Pichai) to GiveDirectly’s efforts.

EMPLOYER FOCUSED RESOURCES

  • The Changing Demands on People Leaders Through COVID-19 – This webinar brings together a panel of top HR Execs to discuss leading through uncertainty.  WEBINAR hosted by CLEO and execs from Affirm, Cleo, Udemy, and Tile on Wednesday, April 29th at 4 PM ET.  RSVP HERE
  • The Future of Wellness in the Workplace – This Webinar features Karen Moseley, President of HERO (Health Enhancement Research Organization) and Chuck Gillespie, CEO of the National Wellness Institute.  Thursday, April 30th at 12 PM ET.  RSVP HERE.

 

About the Author

Andrea Davis, Director of Wellbeing
Andrea joined Alera Group Northeast (formerly CBP) in July 2013, bringing over 15 years of experience in management consulting and strategic solutions. As the Director of Wellbeing, she is responsible for assisting with the development, implementation and evaluation of comprehensive wellness strategies for existing and prospective Alera Group clients. She provides assistance and support to Alera Group clients by developing personalized programs that fit clients’ unique health management needs, wellness program implementation, committee development, promotion and marketing of their programs to encourage participation. In addition, Andrea conducts program analysis and generates reports related to program participation, health assessment and client utilization. 

Alera Group Acquires Barkley Risk Management & Insurance

Posted on April 21st, 2020

Alera Group, a national employee benefits, property and casualty, retirement services and wealth management firm, announced today that it has acquired Barkley Risk Management & Insurance (Barkley), effective April 1, 2020.

Founded in 2000, the Barkley team serves clients throughout California and the surrounding region, providing safety and risk management, claims management, business and insurance risk and more. The firm has unique risk expertise in the agriculture, manufacturing, hospitality and entertainment industries.

“Barkley Risk Management is a strong addition to Alera Group, and we are excited to welcome them as the latest addition our growing firm,” said Alan Levitz, CEO of Alera Group. “The firm, built by Al and Griff Barkley, strengthens our agriculture vertical and helps us expand our presence into coastal California.”

“We are excited to join Alera Group, and look forward to the powerful impact of national resources, expertise and partnership,” said Griffin Barkley, President of Barkley Risk Management & Insurance. “Barkley Risk Management is committed to active partnership with every client, designing comprehensive, innovative solutions for their unique needs. As an Alera Group company, we’ll be able to do that more than ever before.”

The Barkley team will continue serving clients in their existing roles. Terms of the transaction were not disclosed.

###

About Alera Group
Based in Deerfield, IL, Alera Group’s over 2,000 employees serve thousands of clients nationally in employee benefits, property and casualty, retirement services and wealth management. Alera Group is the 15th largest privately held firm in the country. For more information, visit www.jmjwebconsulting.com or follow Alera Group on Twitter: @AleraGroupUS.

M&A Contact
Rob Lieblein, Chief Development Officer
Email: rob.lieblein@aleragroup.com
Phone: 717-329-2451

Weekly Wrap-up: Wellbeing Resources

Posted on April 20th, 2020

As we all adapt to new rhythms of working from home and social distancing, it's important that we stay on top of our wellbeing. Each week we're putting together a fresh list of wellbeing resources that target reach of the six categories of holistic wellbeing: career, social, financial, emotional physical and community. We hope you enjoy this week's list!

Career Wellbeing

  • Career Focused Webinars – this can be a great way to learn more about a specific topic in a short amount of time.  Career Contessa is free during COVID-19 and eLearning Industry offers both free and paid webinars. 
  • Free Online Courses by MIT, Harvard, and More – edX offers a wide variety of courses from business to engineering to humanities by many top universities.  You can audit most of these courses for free. 

Social & Family Wellbeing

Social

  • Calling all Bruce Springsteen Fans – Fans of Bruce and other performers such as Tony Bennett, Jon Bon Jovi, Charlie Puth and more might want to catch the JERSEY 4 JERSEY Benefit Show.
  • 52 Questions to Bring You Closer Together – With extra time to connect with our loved ones, leverage these questions to start meaningful conversations. 

Family

  • Free Tutoring – Students from Harvard, MIT, UC Berkeley Give Free Tutoring to K-12 Students. 
  • How to Discipline During the Pandemic – Some leading psychotherapists weigh in how to discipline in a time where kids need “much more compassion than ever before.”

Financial Wellbeing

  • The Pete the Planner Show – Personal Finance Expert and author Pete the Planner (aka Peter Dunn) welcomes one person on per episode on a quest to make them a millionaire.  In each episode, the entertaining host brings lots of laughs and practical money advice for real people. 

Physical Wellbeing

  • Getting A Good Night’s Sleep During a Pandemic’ WEBINAR hosted by WELCOA and Dr. Michael Breus (aka The Sleep Doctor) on Tuesday, April 21st at 3PM ET. RSVP HERE.
  • TEDTalks Health – From new medical breakthroughs to smart daily health habits, doctors and researchers share their discoveries about medicine and well-being onstage at the TED conference. This is a great podcast to subscribe to. 

Emotional Wellbeing

  • Yale’s Massively Popular ‘Happiness’ Course (choose the free version) – This course has been something of a phenomenon and you can access it for free right now.  Over 1.5 million people have signed up in the wake of COVID-19. 
  • ‘How to be Kind and Gentle with Yourself’ WEBINAR hosted by Modern Health on Thursday, 4/23 at 2pm ET.  This webinar will explore ways to offer yourself more compassion during this difficult time.  RSVP here.
  • If you or someone you care about feels overwhelmed with emotions like sadness, depression or anxiety, or like you want to harm yourself or others call 911.  You can also contact the Substance Abuse and Mental Health Services Administration’s (SAMHSA) Disaster Distress Helpline at 800-985-5990, the National Suicide Prevention Lifeline at 800-273-8255 or text MHFA to 741741 to talk to a Crisis Text Line counselor.

Community Wellbeing

  • Meals on Wheels COVID-19 Response Fund – With seniors being at greatest risk amid COVID-19, Meals on Wheels services are more important than ever.  This organization delivers meals and conducts safety checks for our seniors.  Donate to the national organization or your local program.   
  • The Kindness Podcast – This podcast explores how kindness can be used to solve problems and help others.  Each feel-good episode is 30 minutes. 

EMPLOYER FOCUSED RESOURCES

  • Sustaining Company Culture Through COVID-19 – Culture is so important for our employees and also for our clients or customers.  Gallup talks about how to sustain culture through this unique time.  The webinar was hosted 4/17 but if you register you will get the link for the recording. 

 

About the Author

Andrea Davis, Director of Wellbeing
Andrea joined CBP, an Alera Group company, in July 2013, bringing over 15 years of experience in management consulting and strategic solutions. As the Director of Wellbeing, she is responsible for assisting with the development, implementation and evaluation of comprehensive wellness strategies for existing and prospective CBP clients. She provides assistance and support to CBP clients by developing personalized programs that fit clients’ unique health management needs, wellness program implementation, committee development, promotion and marketing of their programs to encourage participation. In addition, Andrea conducts program analysis and generates reports related to program participation, health assessment and client utilization. She interfaces with CBP’s Chief Medical Officer, Dr. Terrence Fitzgerald, to leverage clinical and analytic data in support of CBP’s health management solutions.

Alera Group Acquires Cambridge Benefit Solutions

Posted on April 20th, 2020

Alera Group, a national employee benefits, property and casualty, retirement services and wealth management firm, announced today that it has acquired Cambridge Benefit Solutions, effective April 1, 2020.

Cambridge Benefit Solutions, located in Chandler, Arizona, was founded in 1998 by current president Don Fechter. Since the beginning, the firm’s mission has been to provide businesses throughout Arizona and the surrounding states with innovative, valuable benefit offerings. Through local partnerships and decades of industry expertise, the firm brings unique expertise and cost-cutting strategies to their clients.

“We are excited to have Cambridge Benefit Solutions join Alera Group and our local firm, Benefit Commerce Group in Scottsdale,” said Alan Levitz, CEO of Alera Group. “Don and Scott have known each other for many years.  I believe their long standing relationship will make for a rapid and seamless integration.”

“As an Alera Group firm, we’ll be able to offer our clients more than ever before,” said Don Fechter, President of Cambridge Benefit Solutions. “The strength of national resources and power of local relationships will allow us to grow as an organization as we continue to serve our clients with excellence.”

Cambridge Benefit Solutions joins Alera Group through Benefit Commerce Group. Terms of the transaction were not disclosed.

###

About Alera Group
Based in Deerfield, IL, Alera Group’s over 2,000 employees serve thousands of clients nationally in employee benefits, property and casualty, retirement services and wealth management. Alera Group is the 15th largest privately held firm in the country. For more information, visit www.jmjwebconsulting.com or follow Alera Group on Twitter: @AleraGroupUS.

NYS Notice: Small Group Blanket Comprehensive Health Insurance Policies

Posted on April 20th, 2020

Notice for Individual, Small Group and Student Blanket Comprehensive Health Insurance Policies

Dear Policyholder,

A recent Executive Order issued by Governor Cuomo, together with recent amendments to the insurance and banking regulations (the “regulations”) issued by the New York State Department of Financial Services (“Department”), extend grace periods and give you other rights under certain health insurance policies if you are a policyholder of an individual, small group or student blanket comprehensive health insurance policy and can demonstrate financial hardship as a result of the novel coronavirus (“COVID‑19”) pandemic. A “small group” means a group of one hundred or fewer employees or members exclusive of spouses and dependents.  These grace periods and rights are currently in effect but are temporary, though they may be extended further.  Please check the Department’s website at https://www.dfs.ny.gov/consumers/coronavirus for updates.

Insurance Payments – Grace Period

If you can demonstrate financial hardship as a result of the COVID-19 pandemic, your insurer must extend to the applicable grace period for the payment of premiums to the later of the expiration of the applicable contractual grace period and 11:59 p.m. on June 1, 2020, for any individual, small group or student blanket comprehensive health insurance policyholder.  Your insurer is responsible for the payment of claims during such period and may not retroactively terminate your policy for non-payment of premium.  In addition, if you do not make a timely premium payment and can demonstrate financial hardship as a result of the COVID-19 pandemic, your insurer may not impose any late fees relating to the premium payment, report you to a credit reporting agency or a debt collection agency regarding such premium payment and provide information to you regarding alternative policies available from such insurer and provide contact information for the NY State of Health.

How to Demonstrate Financial Hardship

If you are unable to make a timely premium payment due to financial hardship as a result of the COVID-19 pandemic, you may submit to your insurer a statement that you swear or affirm in writing under penalty of perjury that you are experiencing financial hardship as a result of the COVID-19 pandemic, which the insurer or premium finance agency, as applicable, shall accept as satisfactory proof.  Such statement is not required to be notarized.

Questions

If you have any questions regarding your rights under the Executive Order or regulations, please contact your insurer, broker, or premium finance agency.

Legal Alert: Notice Requirements When Making Health Plan Design Changes

Posted on April 16th, 2020

This alert was updated on 04/16/20. 

As employers work to stay financially solvent during the COVID-19 pandemic, many are looking to change their health plan designs in order to ensure employees have access to the care they need while balancing the financial impact on the business. For instance, employers may be looking to: 

  • Reduce the number of hours to be eligible for benefits to allow employees who are furloughed or working fewer hours to remain enrolled
  • Permit employees to take advantage of the COVID-19 special enrollment period being offered by their carriers  

Likewise, the CARES Act, signed into law on March 27, 2020 created changes which may impact an employer’s plan design: 

  • Relaxed the provision for health FSAs, HSAs, HRAs and other accident and health plans to require a doctor’s prescription for over the counter (OTC) medications in order to be considered an eligible medical expense reimbursement and also permits menstrual care products to also qualify as medical care for purposes of reimbursement or tax-free distribution.  

  • Permits high deductible health plans (HDHPs) beginning before 1/1/2022 to allow telehealthcare services prior to meeting the deductible without disqualifying their HSA compatibility status. (IRS Notice 2020-15 also allows HDHPs to pay for COVID-19 testing and treatment prior to meeting the deductible.) 

The type of plan change contemplated by the employer dictates: 

  1. When notice must be given to employees 

  2. Whether approval from their carrier (or stop-loss provider if benefits are self-insured) is needed and; 

  3. May require amendments to plan documents.  

Note: although a carrier may permit a COVID-19 special enrollment period, currently, because the IRS has not issued additional guidance, employers should continue to follow the law and regulations set-forth in providing Section 125 benefits which require pre-tax premiums to be irrevocable unless the employee experiences a permitted status change event. 

It is possible the IRS may be less likely to penalize plan sponsors that allow a special open enrollment given the unprecedented circumstances; however, employers need to be aware that there is still risk and should work with qualified legal or tax advisors if they want to permit employees to enroll on a pretax basis. 

The DOL, HHS and IRS announced through a recent Family First Coronavirus Response Act (FFCRA) Frequently Asked Questions (FAQs) that they will not take enforcement action against plans or insurers that adopt modifications to provide greater coverage for COVID-19 diagnosis or treatment. Normally there is a 60-day advance notice to enrollees required for mid-year material modifications to the Summary of Benefits and Coverage (SBC). The agencies have said that distributing a notice is still required but can be made as soon as reasonably practicable, and not required 60-days prior to the change. If the changes will be maintained beyond the federal emergency health declaration period, then the insurance carrier or health plan must comply with all other applicable requirements to updated plan documents or terms of coverage. 

The following chart outlines the normal required notice requirements depending on the type of plan change that is being implemented.

Type of Change

Notice Requirement

Which Plans

Changes to any information found in the Summary of Benefits and Coverage (SBC) which includes deductibles, out of pocket limits, whether or not referrals are needed for specialists, copays, coinsurance, whether or not preauthorization is needed, services the plan does not cover, and what additional services are covered by your plan.

Prior to implementing any change that would require an updated SBC, plan participants must be given 60 days advance notice in the form of an updated SBC. This is a firm requirement.

This notice requirement is for ALL group health plans, regardless of whether or not they are subject to ERISA.

Modifications to a summary plan description (SPD) that constitute a material reduction in covered services or benefits. For example, a decrease in employer contributions, or a material modification to plan terms.

Notice must be provided within 60 days of making the change. Practically speaking, employers should strive to give notice prior to making the change, but under ERISA, they have until 60 days after the change to inform employees. Notice should be provided in the format of a Notice of Material Modification.

This notice requirement is only for group health plans subject to ERISA.

All other changes (not a material reduction in benefits and no impact on the SBC)

Notice must be provided within 210 days after the end of the plan year, in the format of a Summary of Material Modification (SMM).

This notice requirement is only for group health plans subject to ERISA.

Assuming that these changes occur mid-year and that the employer has a Section 125 Plan so that employee contributions are handled on a pre-tax basis, depending on the change being made to the benefits and/or contributions, the employee may be able to:

  • Drop coverage for themselves and any covered dependents.
  • Not change which dependents are being covered, except to delete coverage for themselves and all covered dependents.
  • At the employer’s decision, employees (and covered dependents) could choose a different plan option assuming more than one plan is offered.

Mid-year changes in benefits and/or contributions due to the consistency rulewould not trigger either a full or partial open enrollment.

If an employee’s spouse or dependent child under age 26 was to lose coverage due to a layoff or furlough at their employer, then this would be a change in status event that would allow the employee to add dependents onto their plan.

For the latest updates from the Alera Group team regarding coronavirus (COVID-19), please visit our live dashboard at jmjwebconsulting.com/coronavirus

 

The information contained herein should be understood to be general insurance brokerage information only and does not constitute advice for any particular situation or fact pattern and cannot be relied upon as such.  Statements concerning financial, regulatory or legal matters are based on general observations as an insurance broker and may not be relied upon as financial, regulatory or legal advice. This document is owned by Alera Group, Inc., and its contents may not be reproduced, in whole or in part, without the written permission of Alera Group, Inc.

Alera Group COVID-19 Employer Pulse Survey Results Revealed

Posted on April 16th, 2020

 COVID-19 Leads to Greater Employer Focus on Response Planning, Employee Education and Flexible Work Arrangements, Alera Group Study Finds

COVID-19 is leading many employers to implement or re-evaluate their infectious disease response plans, ramp-up their employee communication efforts, and offer flexible work arrangements to address childcare and remote work challenges, a new Alera Group study finds. The Alera Group COVID-19 Employer Pulse Survey explores the impact of the pandemic and offers insights into how employers throughout the country and in various industries are navigating employee health, benefits and human resources issues in the changing landscape.

The study identified five key findings:

  • Over 50% of employers surveyed with 100 or more employees will implement formal infectious disease policies as a result of COVID-19.
  • Most employers, regardless of size, region, or industry, are educating their employees several times a week about prevention techniques, COVID-19 symptoms and employee benefits.
  • Hiring freezes and social distancing measures are prevalent and layoffs and furloughs are rising as a result of shutdowns.
  • The majority of employers surveyed are allowing employees to use their paid time off and some are assisting with childcare issues. Telemedicine is becoming more of a focus.
  • The impact of COVID-19 varies by industry, with manufacturing, non-profit, healthcare, professional and finance/insurance organizations having a slightly more positive outlook.

“The COVID-19 pandemic is raising questions among employers about employee benefits policies and coverages as a result of remote work arrangements, childcare challenges, and furloughs,” said Sally Prather, National Employee Benefits Leader at Alera Group.

“Despite the severity of the situation, employers are promoting resilience through EAP and wellness resources, and where onboarding can continue, turning to virtual methods,” said Karen English, Senior Vice President at Spring Consulting Group, an Alera Group company.

Continued English, “As employers work to navigate this current crisis, proactive response planning, re-evaluating benefits policies and plans, and leveraging health and benefits technology will be keys to preparing for future wide-spread disruptions.”

The Alera Group survey was conducted online from March 27 to April 6, 2020, and consisted of 831 employers across various sizes, industries and regions. Special thanks to Lai-Sahn Hackett, Consultant and Director of Market Research at Spring Consulting Group, an Alera Group company, for leading the survey design and analysis efforts.  You can view the full report here.

About Alera Group
With over 80 firms across the country and nearly 2,000 teammates, Alera Group works together to deliver solutions in employee benefits, property and casualty, retirement services and wealth management. Built on a unique model of collaboration, Alera Group is now the 17th largest independent insurance agency in the United States. For more information, visit jmjwebconsulting.com.

Alera Group Acquires Georgetown Insurance Service

Posted on April 14th, 2020

Alera Group, a national employee benefits, property and casualty, retirement services and wealth management firm, today announced that it has acquired Georgetown Insurance Service, Inc. (Georgetown Insurance), effective March 1, 2020.

Headquartered in Silver Spring, Maryland, Georgetown Insurance has served clients throughout the state and the surrounding region for decades. Georgetown Insurance works closely with the construction, manufacturing, real estate and transportation industries, in addition to providing their clients with specialty offerings and enhanced services.

“Georgetown Insurance Service, led by Remmie Butchko, is a fantastic addition to Alera Group as we continue to serve clients and enhance their experience with Alera Group,” said Alan Levitz, CEO of Alera Group. “We are excited to welcome Remmie and the entire team as Alera Group’s first P&C firm in the greater Washington, D.C. area.”

“Georgetown Insurance Service has been focused on building lasting local relationships with our clients while serving them with unparalleled service. Becoming an Alera Group company allows us to continue on that path, now with more resources than ever before,” said Remmie Butchko, CEO of Georgetown Insurance. “We are thrilled to join Alera Group and look forward to the collaboration ahead.”

The Georgetown Insurance team will continue serving clients in their current roles. Terms of the transaction were not disclosed.

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About Alera Group
With over 80 firms across the country and nearly 2,000 teammates, Alera Group works together to deliver solutions in employee benefits, property and casualty, retirement services and wealth management. Built on a unique model of collaboration, Alera Group is now the 17th largest independent insurance agency in the United States. For more information, visit jmjwebconsulting.com.

M&A Contact
Rob Lieblein, Chief Development Officer
Email: rob.lieblein@aleragroup.com
Phone: 717-329-2451

Media Contact
Jessica Tiller, Pugh & Tiller PR
Email: jtiller@pughandtillerpr.com
Phone: 443-621-7690

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