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New COVID-19 Relief Legislation: What Employers Need to Know

Written by MichaelKelly

On Sunday, December 27, 2020, President Trump signed the long-anticipated and wide-sweeping COVID-19 relief bill that includes several provisions that will significantly impact employee benefits plans. 

Below is a short summary of some of the key provisions. You can read the bill in full here

LIMITING SURPRISE MEDICAL BILLING
The legislation puts new rules in place to attempt to limit surprise out-of-network medical bills, which have become more common. The rules require payers (i.e., insurance companies and health plans) to agree to an out-of-network payment (the “qualifying payment amount”) for certain kinds of medical services. If the parties cannot agree on the payment amount, the dispute will go to a pre-defined arbitration arrangement. Importantly, the plan will be required to cover services subject to the rules on an in-network cost-sharing level and participants will be protected from balance billing.

What Employers Need to Know

  • The new requirements are scheduled to go into effect 1/1/2022. There will be significant regulatory guidance developed during 2021 prior to the effective date.
  • The participant balance billing protections apply to some, but not all, medical services, including: most emergency services provided out-of-network, air ambulance services, and non-emergency services (such as radiology services) performed by an out-of-network provider at an in-network facility.
  • States may impose more strict restrictions on surprise billing.
  • There will be some employee notification requirements. However, employers will not typically have direct access to much of the payment information contained in an employee disclosure, so they will need to rely on their carriers or plan administrators to provide, or assist with, required notifications.

 

TEMPORARY SPECIAL RULES FOR ADDITIONAL SECTION 125 AND 129 REIMBURSEMENT AND ELECTION CHANGE FLEXIBILITY
Previous legislation and regulatory guidance had provided significant flexibility regarding reimbursements and election changes in Section 125 Cafeteria plans, HFSAs and Section 129 DCAPs. The latest COVID-19 legislation gives employers the option to offer even more flexibility to HFSA and DCAP participants.

  • Carryovers Allowed for HFSA and DCAP – For plan years ending in 2020 or 2021, an employer may allow participants to carry over unused HFSA or DCAP balances to the next plan year.
  • Extended Grace Periods Allowed – An employer may implement a HFSA or DCAP grace period of up to 12 months for plan years ending in 2020 or 2021.
  • Election Changes – Employers may now allow employees to make prospective changes to HFSA or DCAP elections for any plan years ending in 2021, even if the employee has not experienced a recognized election change event.
  • Special Rule for DCAP Participants with Dependents Who Age Out – The legislation contains a temporary rule that allows a plan to reimburse expenses for dependents who have not attained age 14 under certain circumstances.
  • HFSA Post-Termination Reimbursements – An employer may reimburse HFSA expenses incurred after termination by an employee who terminates from the plan during calendar years 2020 or 2021.

What Employers Need to Know
Employers have the option to implement some or all of the flexibility provided or could chose not to change their plans at all. Plans may be amended retroactively to implement any of all of these provisions. The plan amendment must be made no later than the last day of the first calendar year beginning after the end of the plan year in which the amendment is effective. For example, for changes made to a plan with the plan year ending 12/31/2020, the amendment must be made by 12/31/2021.

 

NEW HEALTH PLAN REPORTING RULES
The legislation also includes significant new health plan reporting requirements regarding prescription and other health plan cost information. These requirements go into effect beginning in 2022. Plans will be required to report the following information:

  • Plan year dates.
  • The number of participants and beneficiaries.
  • Each state in which the plan is offered.
  • Information on the 50 brand prescription drugs most frequently dispensed for claims paid by the plan.
  • Information on the 50 most costly prescription drugs with respect to the plan by total annual spending.
  • The 50 prescription drugs with the greatest increase in plan expenditures.
  • Total spending on health care services broken down by— hospital costs; health care provider and clinical service costs, for primary care and specialty care separately; costs for prescription drugs; and other medical costs, including wellness services, and spending on prescription drugs by the participants.
  • The average monthly premium— paid by employers on behalf of participants and beneficiaries; and paid by participants and beneficiaries.
  • Information about the impact on premiums from rebates, fees, and any other remuneration paid by drug manufacturers to the plan or its administrators or service providers.

​​​​​​What Employers Need to Know
Employer plan sponsors will be responsible to ensure that required reporting is completed for their plans, but again, much of the information required will need to be provided by carriers and plan administration vendors. We expect significant regulatory guidance on this reporting requirement to be released during 2021, which will help employers better understand exactly what needs to be reported.

 

FFCRA PAID LEAVE TAX CREDIT EXTENSION WITHOUT MANDATE EXTENSION
The legislations does NOT extend the paid leave provisions of the Families First Coronavirus Relief Act (FFCRA) beyond December 31, 2020. However, employers may voluntarily allow employees to take any remaining FFCRA leave through March 31, 2021 and continue to receive the applicable tax credits for such leave if they were previously eligible for such tax credits. Note that the Act does NOT provide additional amounts of paid leave under the FFCRA if employees have already exhausted their leave, nor mandate an employer provide additional time regardless of when FMLA timeframes reset (i.e. calendar year resets).

 

What Employers Need to Know
If previously offering FFCRA related leave, employers have the option to continue to offer into 2021 to take advantage of tax credit offering through March 31st.  This is a voluntary option for employers, however, decisions should be communicated with employees regardless of the direction chosen.  This is especially important if employees are currently on FFCRA leave currently and will not return before 1/1/2021.


 
UNEMPLOYMENT BENEFITS FUNDING AND EXTENSION
The legislation expands unemployment assistance, including the amount of time that unemployed workers can collect unemployment insurance benefits by an extra 11 weeks. The CARES Act had extended the unemployment benefit period by 13 weeks for individuals receiving unemployment benefits through their state programs, as well as those eligible to receive benefits through the Pandemic Unemployment Assistance Program. The additional 11 weeks of benefits extends to 24 weeks the extended unemployment eligibility period.

Additionally, it restores the supplemental federal unemployment benefit provided under the CARES Act, though at a lower weekly rate of $300 per week to unemployed workers who are eligible for benefits under their state’s unemployment programs and/or the Pandemic Unemployment Assistance Program. The supplemental federal unemployment benefits are set to expire on March 14, 2021.

 
PPP AID FOR BUSINESSES
The legislation includes approximately $325 billion in funding to the Small Business Administration (SBA) to assist U.S. businesses that have been affected by the COVID-19 pandemic. Specifically, the bill allocates $284 billion in funding to replenish the Paycheck Protection Program (PPP), which provides forgivable small business loans to eligible applicants.

Under the bill, certain companies that had already applied for, received and exhausted PPP funds will be eligible to apply for another PPP loan. To be eligible for a second PPP loan, a small business must have less than 300 employees and have sustained at least a 30% loss in revenue during any quarter of 2020. Additionally, small 501(c)(6) organizations with 150 or fewer employees that are not lobbying organizations would be eligible for a PPP loan with this round of funding.

The bill also provides the following with regard to the PPP:

  • Expansion of expenses eligible for loan forgiveness to include supplier costs and investment costs related to modifying facilities and obtaining personal protective equipment for safety.
  • Simplified loan forgiveness process for businesses that have borrowed $150,000 or less in PPP loans.
  • Confirmation that business expenses paid for with PPP loan funds are tax deductible.

What Employers Need to Know
Businesses interested in applying for a PPP loan should contact their lender for more information.


CONTACT US IF YOU HAVE QUESTIONS

HealthCheck360 will continue to monitor developments and provide assistance as needed. If you have any questions, please contact your HealthCheck360 representative. 

Please be advised that HealthCheck360 does not engage in the practice of law and that information provided is not intended to be construed as legal or tax advice.

To see all of our COVID-19 Workplace Solutions, click here.

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Topics: Wellness Regulation, COVID-19

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