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
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.
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:
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:
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.
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