DOL Updates Revised FMLA Forms and Requests Information Regarding Future Enhancements

Revised FMLA Forms

The DOL recently released updated FMLA Forms. The new forms released by the Wage and Hour Division (WHD) are simpler and designed for electronic use. The information gathered and presented is essentially the same, but the forms now feature more check boxes versus blank spaces for free form answers. For example:

*The Notice of Eligibility & Rights and Responsibilities contains a section regarding Substitution of Paid Leave. The employer has the following options available and would select the appropriate option by marking the checkbox: “Some or all of your FMLA leave will not be paid,” “You have requested to use some or all of your available paid leave,” “We are requiring you to use some or all of your available paid leave,” or “Other” for short/long-term disability, workers compensation, or state leave laws.
*On the revised Heath Care Provider Certification, the health care provider would select one qualifying condition from: inpatient care, incapacity plus treatment, pregnancy, chronic conditions, permanent or long term conditions, or conditions requiring multiple treatments. There is a section with relevant definitions. Also, the form clarifies that specific medical details such as diagnosis and symptoms are not required information as some state laws prohibit such.

WHD believes the changes will reduce the time users spend providing information, improve communications between leave applicants and administrators, and reduce the likelihood of violations.

The forms have a revision date of June 2020 with an expiration date of June 30, 2023. Employers who utilize the model FMLA forms for administration should begin using the revised forms as soon as possible.

WHD Request for Information

On July 17, 2020, the WHD requested information from the public concerning the effectiveness of the current FMLA regulations and related compliance resources. Specifically, the WHD would like to know:

*What changes would help employees better understand and effectuate their rights and obligations under FMLA?
*What challenges if any have employers and employees had in applying the definition of a serious health condition, administering leave on an intermittent basis or reduced leave schedule, and processing medical certifications?
*Should additional guidance on topics addressed in recent opinion letters be addressed through regulatory action? Those topics include individualized education plans, organ donation and compensability of frequent 15-minute breaks.

The WHD hopes to obtain feedback on challenges and best practices in the use and administration of FMLA. Information collected will help the DOL identify areas for additional compliance assistance to ensure that FMLA is understood by both employers and employees.

Comments are due on or before September 15, 2020.

Women’s Bureau Request for Information

On July 16, 2020, the DOL’s Women’s Bureau issued a Request for Information related to paid leave. As background, the Women’s Bureau’s stated mission is to formulate standards and policies that promote the welfare of wage-earning women, improve their working conditions, increase their efficiency and advance their opportunities for profitable employment.

The request included reference to the findings of several studies (both by the DOL and outside parties) indicating that access to paid leave increases a new mother’s likelihood of being employed after childbirth, and that paid leave is offered by more employers in the private sector with higher paid earners versus low-income workers.

The bureau acknowledges that some states and localities have enacted paid family and medical leave laws that provide covered workers with the right to partial wage replacement through a state-run insurance program when they are not working due to their own or a family member’s serious health needs or bonding with a new child. Also, effective October 1, 2020, eligible federal workers will be entitled to 12 weeks of paid parental leave for the birth, adoption or fostering of a new child. This provision was part of the 2020 National Defense Authorization Act. The Families First Coronavirus Response Act (FFCRA), enacted earlier this year, requires certain employers to provide employees with paid sick leave or expanded FMLA for specific reasons related to COVID-19.

The bureau is seeking input from a variety of stakeholders to determine what state, local, private employer, or FFCRA leave provisions could serve as best practices when developing a paid leave program. These stakeholders include state and local officials, employers, unions, workers, individuals who are not currently employed, faith-based and other community organizations, universities and other institutions of higher education, foundations, chambers of commerce and other interested parties with experience or expertise in paid leave.

For the purposes of this information collection, paid leave means absence from work, during which an employee receives compensation, to care for a spouse, parent, child, or his or her own health.

The bureau is specifically requesting information based on 23 questions, including:

*Who benefits from paid leave and who bears the costs?
*What could be done to improve the existing patchwork of programs, which include state and employer-sponsored paid options? What are the impediments, cost and otherwise, faced in implementing those improvements?
*Do employer-provided paid leave programs offer more generous benefits than state paid leave programs?
*What is the ideal leave duration and how much pay should be replaced?
*If you do not have access to paid leave, have you experienced individual or family circumstances for which you would have taken paid leave if it had been available? How might paid leave have affected those particular situations or outcomes?

Comments are due on or before September 14, 2020.

These documents make it clear that the DOL is looking to possibly make changes to FMLA rights and responsibilities. Employers should comment if interested. We will continue to follow developments that come out of this process.

DOL Press Release »
Revised FMLA Forms »
WHD Request for Information »
Women’s Bureau Request for Information »

Source: NFP BenefitsPartners

Filed under: Abentras Blog

President Issues Executive Order on Drug Pricing

On July 24, 2020, President Trump issued Executive Order 13939, which seeks to lower drug prices by eliminating or discouraging rebates paid to pharmacy benefit managers (PBMs) and other middlemen involved in purchasing drugs on behalf of Medicare Part D insurance plans. According to the order, PBMs negotiate prices with drug manufacturers at amounts lower than the list prices that a Medicare patient would pay for drugs. The difference between the amount paid by the patient and the amount the PBM negotiated is kept by the PBM as a rebate.

Federal kickback statutes have a safe harbor that protects these rebates, and the order seeks to eliminate or narrow this safe harbor in an effort to discourage or prevent PBMs from contributing to higher drug prices paid by Medicare patients. Accordingly, the order instructs the Secretary of Health and Human Services to begin the rulemaking process to both deny safe harbor protection for these rebates and to create new safe harbor protections for patient discounts while allowing for bona fide PBM service fees. However, the secretary must first determine that these new rules would not add to the federal debt, increase Medicare premiums or patient out-of-pocket costs.

Although the order specifically targets Medicare Part D drug plans, the elimination or narrowing of the federal kickback safe harbor could affect employer plan sponsors. We will continue to follow and report on any potential developments concerning these requirements.

Executive Order 13939 »

Source: NFP BenefitsPartners

Filed under: Abentras Blog

Agencies Propose Rule to Increase Flexibility for Grandfathered Group Health Plans

On July 10, 2020, the DOL, HHS and IRS released a proposed rule to amend certain requirements for grandfathered group health plans seeking to maintain their grandfathered status. The proposal is designed to provide such plans greater flexibility to make changes with respect to fixed-amount cost-sharing increases, including those necessary to maintain HDHP status.

As background, the ACA permits certain group health plans that existed as of the law’s enactment on March 23, 2010, to be treated as grandfathered health plans. By such treatment, the plans are exempt from some of the ACA’s mandates. However, to preserve such status, these plans are limited in their ability to alter the plan design or increase cost sharing.

The proposal follows a public request for information by the agencies on February 25, 2019. This request was designed to gather feedback as to whether the existing 2015 grandfathered plan rules could be modified to better assist plan sponsors responding to rising healthcare costs, while maintaining affordability for employees.

Under the current regulations, increases for fixed-amount cost sharing other than copayments (e.g., deductibles and out-of-pocket maximums) cannot exceed thresholds determined by the Consumer Price Index (CPI) measure of medical inflation. However, this component of the CPI index includes not only prices for private insurance, but also self-pay patients and Medicare, which would not be reflected in group health plan costs.

Accordingly, the proposed rule provides the alternative method of measuring permitted increases in such fixed-amount cost sharing by using the premium adjustment percentage published each year by HHS in the annual notice of benefit and payment parameters. The premium adjustment percentage reflects the cumulative historic growth from 2013 through the preceding calendar year in premiums for private health insurance. Therefore, this measure is viewed as more accurately reflecting the cost increases for grandfathered group health plans than the CPI measure.

The proposal does not eliminate use of the CPI index, but rather allows an employer to use the method that yields the greater result. Therefore, the increases to non-copay fixed-amount cost-sharing for grandfathered group health plans could not exceed the greater of the CPI measure of medical inflation percentage or the applicable premium adjustment percentage, plus 15 percentage points.

In addition, the proposal clarifies that a grandfathered group HDHP may increase fixed-amount cost-sharing requirements, such as deductibles, to the extent necessary to maintain their HDHP status without losing grandfathered status. This change was initiated to ensure that participants enrolled in that coverage remain eligible to contribute to an HSA.

Employers who sponsor grandfathered plans should be aware of these developments. The agencies are accepting public comments on the proposal through August 14, 2020. The proposed changes would become effective 30 days following the publication of a final rule and would not have retroactive effect.

Grandfathered Group Health Plans and Health Insurance Coverage Proposed Rule »
Agency FAQs »

Source: NFP BenefitsPartners

Filed under: Abentras Blog

IRS Extends July 15 Tax and Other Deadlines for People and Businesses Affected by Recent Tornados, Storms and Floods

On June 23, 2020, the IRS announced in a press release that it will extend the deadline for tax filings for persons and businesses affected by tornados, storms and floods in parts of Mississippi, Tennessee and South Carolina. As of the date of the press release, this relief is extended to people living in the following counties: Clarke, Covington, Grenada, Jasper, Jefferson Davis, Jones, Lawrence, Panola and Walthall counties in Mississippi; Bradley and Hamilton counties in Tennessee; and Aiken, Barnwell, Berkeley, Colleton, Hampton, Marlboro, Oconee, Orangeburg and Pickens counties in South Carolina. This relief automatically extends to people and businesses in others areas designated by the Federal Emergency Management Agency (FEMA) as qualifying for such assistance. The deadline to file personal and business tax returns, and to pay taxes, will be extended from July 15, 2020, to October 15, 2020.>

In addition to the tax deadlines, the extension applies to 2019 IRA contributions, estimated tax payments for the first two quarters of 2020, and the third quarter estimated tax payment normally due on September 15. It also includes the quarterly payroll and excise tax returns normally due on April 30 and July 31.

In addition, penalties on payroll and excise tax deposits due on or after April 12 and before April 27 will be abated as long as the deposits were made by April 27.

This extension will apply to various employee benefit filing requirements. For example, the Form 5500 due date for calendar-year plans could likely be extended. Employers in affected areas should be aware of these deadline extensions, and work with service providers to take advantage of the extension. Other employers should keep an eye on FEMA announcements in the event that their county is included in the list in the future.

IRS Press Release »

Source: NFP BenefitsPartners

Filed under: Abentras Blog

DOL Clarifies Guidance for FFCRA Leave when Summer Camps Are Closed

On June 26, 2020, the DOL issued Field Assistance Bulletin No. 2020-04 for its investigators. The bulletin provides guidance for those investigators looking into cases in which an employer allegedly improperly denies an employee FFCRA leave when summer camps, summer enrichment programs or other summer programs are closed. It reiterates previous guidance regarding summer camps and FFCRA leave and adds a discussion of what investigators should look at when determining whether an employer appropriately denied FFCRA leave to an employee seeking it because a summer camp was unavailable for the child.

FFCRA provides up to 80 hours of emergency paid sick leave, and up to twelve weeks of expanded family and medical leave (10 of which may be paid), if an employee is unable to work or telework due to a need to care for their child because that child’s “place of care” is closed due to COVID-19 related reasons. In order to obtain this leave, the requesting employee must provide their employer with information to support this need for leave. This information includes an explanation of the reason for the leave, a statement that the employee cannot work due to that reason, the name of the affected child, the name of the place of care, and a statement that no other suitable person is available to care for the child.

The question is whether summer camps, summer enrichment programs and other summer programs count as places of care for this purpose. The bulletin focuses on whether a particular summer camp or program would have served as a place of care had it not closed for COVID-19 related reasons. Evidence of the employee’s intent to use the camp or program for this purpose should be considered. The bulletin suggests that the matter seems clear enough that summer camps or programs are places of care for this purpose when the employee actually enrolled their child in the camp or program before the camp opted to close due to COVID-19.

However, there are cases where the employee had not enrolled their child in the camp or program. The bulletin applies a preponderance of the evidence standard, under which it must appear that the employee would have more likely than not enrolled their child in the camp in question, when evaluating those cases. Steps taken by the employee short of actual enrollment may indicate that intent, such as paying a deposit, prior attendance in the camp or program or submitting an application to enroll. A mere statement of intent is likely not enough. Similarly, a camp or program that is available for 12-year-old children would not be appropriate for the 13-year-old child of an employee, so such a camp or program would not qualify as a place of care for that child.

Although the bulletin is intended for DOL investigators, it could be helpful for employers to keep this in mind when evaluating an employee request for FFCRA leave for this reason.

Field Assistance Bulletin No. 2020-04 »

Source: NFP BenefitsPartners

Filed under: Abentras Blog

DOL Proposes Updates to Mental Health Parity Compliance Tool

On June 19, 2020, the DOL proposed changes to its Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) self-compliance tool. As background, MHPAEA requires that the financial requirements and treatment limitations imposed on mental health and substance use disorder benefits cannot be more restrictive than the predominant financial requirements and treatment limitations that apply to substantially all medical and surgical benefits. The self-compliance tool was created by the DOL to help group health plan sponsors determine whether their group health plan complies with MHPAEA.

The 2020 version of the self-compliance tool mostly adds additional illustrative examples of when a plan is or is not compliant with MHPAEA. It also adds a new section (Section H) and a new appendix (Appendix II). Section H discusses how employers can establish an internal MHPAEA compliance plan and Appendix II provides a tool for comparing plan reimbursement rates to Medicare.

The DOL is requesting public comments on the revisions to the self-compliance tool by July 24, 2020. Ultimately, this tool does not add any new compliance obligations. Instead, it provides assistance in evaluating compliance with MHPAEA’s requirements. Plan sponsors should review the self-compliance tool to ensure their compliance.

Proposed Updates to 2020 MHPAEA Self-Compliance Tool »
Press Release »

Source: NFP BenefitsPartners

Filed under: Abentras Blog

DOL Penalizes Employer for Failure to Forward Health Plan Premiums

The DOL’s Employee Benefits Security Administration (EBSA) investigated a Las Vegas, Nevada, employer who failed to forward employee contributions to the carrier providing the employer sponsored employee health insurance plan. The employer continued to deduct the employee contributions from employee paychecks. The employer did not timely forward those contributions to the insurance carrier; nor did the employer make any payment to the carrier. This resulted in a retroactive termination of the group health insurance plan.

As background, ERISA requires private employer plan sponsors, as an ERISA fiduciary, to operate the group health plan in the best interest of participants and beneficiaries. Plan assets, including employee contributions, must be used exclusively to provide plan benefits. The employer cannot profit from the plan.

The US District Court for the District of Nevada approved a default judgement against the employer requiring them to pay $99,807 to former participants and beneficiaries. This amount included outstanding medical claims and the employee contributions. Further, the employer’s former president is permanently barred from serving as a fiduciary to any ERISA health benefits plan.

DOL Press Release, ERISA Fiduciary Violation »

Source: NFP BenefitsPartners

Filed under: Abentras Blog

IRS Proposes Rule on Direct Primary Care and Healthcare Sharing Ministries

On June 8, 2020, the IRS proposed regulations regarding the tax treatment of amounts paid for certain medical care arrangements, including direct primary care arrangements and healthcare sharing ministries. The proposal would allow individuals who pay for these arrangements to deduct the amounts paid as medical expenses.

As background, on June 24, 2019, President Trump issued Executive Order 13877, “Improving Price and Quality Transparency in American Healthcare to put Patients First.” As part of this transparency effort, the order directed the IRS to propose regulations to treat expenses related to certain medical arrangements as eligible medical expenses under Code Section 213(d). Code Section 213(d) defines medical care broadly to include amounts paid for “the diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting any structure or function of the body,” as well as insurance covering such medical care.

The proposed regulations define a direct primary care arrangement as a contract between an individual and one or more primary care physicians who agree to provide medical care for a fixed annual or periodic fee without billing a third party. Although this definition currently encompasses contracts only with medical doctors specializing in family medicine, internal medicine, geriatric medicine or pediatric medicine, comments are requested as to whether to expand the definition to include other professionals such as nurse practitioners and physician assistants.

A healthcare sharing ministry is defined as a nonprofit organization under Code Section 501(c)(3) that is tax exempt under Section 501(a) in which members share medical expenses in accordance with a common set of ethical or religious beliefs without regard to state residency or employment. Such a ministry must have been in existence since December 31, 1999 (to be grandfathered from health reform requirements), and conduct an annual audit by an independent certified public accounting firm.

Upon analysis, the IRS concludes that payments for direct primary care arrangements could qualify as medical care (for example, for an annual exam or specified treatments) or medical insurance (i.e., similar to a premium to cover such exams or treatments) depending upon the structure of the particular arrangement. Regardless of the classification, the expense would qualify as a deductible medical expense under Code Section 213(d). By contrast, payments for membership in a healthcare sharing ministry would only be considered medical insurance as the ministry is not providing the medical care, but instead receiving and paying claims for such care.

Furthermore, the regulations clarify that amounts paid for coverage under certain government-sponsored healthcare programs are treated as amounts paid for medical insurance. These include Medicare, Medicaid, the Children’s Health Insurance Program (CHIP), TRICARE and certain veterans’ insurance programs. Therefore, amounts paid for enrollment fees or premiums under these programs would be eligible for deduction as a medical expense.

Generally, HRAs can reimburse expenses for medical care as defined under Section 213(d). Accordingly, the proposal indicates that an HRA integrated with a traditional group health plan, an individual health insurance coverage or Medicare (i.e., an ICHRA), an excepted benefit HRA, or a qualified small employer health reimbursement arrangement (QSEHRA) could provide reimbursements for direct primary care arrangement or healthcare sharing ministry fees.

With respect to HSAs, eligibility to contribute is conditioned upon an individual being covered by a high deductible health plan (HDHP) and having no other impermissible coverage that would pay medical expenses prior to satisfaction of the statutory HDHP deductible. Certain types of other coverage can be disregarded for this purpose, such as accident, dental, vision and preventive care. Direct primary care arrangements typically provide a variety of services such as physical exams, vaccination, urgent care and laboratory testing and, therefore, would be providing impermissible coverage before the HDHP statutory deductible is met. As a result, an individual covered by a direct primary care arrangement or healthcare sharing ministry would generally be ineligible to contribute to an HSA. However, there may be exceptions for arrangements that provide limited coverage, such as preventive care only.

Additionally, if an employer pays direct primary care arrangement fees, whether directly or through payroll deductions, the payment arrangement would be a group health plan that would disqualify an individual from contributing to an HSA.

Employers should be aware of the proposed regulations, for which the IRS is currently accepting public comments. Although the guidance clarifies that direct primary care fees can qualify as deductible medical care expenses, questions remain as to how employers can incorporate direct primary care arrangements in a compliant health benefits program. Hopefully, these concerns will be addressed in the final regulations, once issued. Please stay tuned to Compliance Corner for further updates.

Final Rule on Certain Medical Care Arrangements »

Source: NFP BenefitsPartners

Filed under: Abentras Blog

PCOR Fee Increased for 2019-2020 Plan Years

On June 8, 2020, the IRS released Notice 2020-44, which announces that the adjusted applicable dollar amount for PCOR fees for plan and policy years ending on or after October 1, 2019, and before October 1, 2020, is $2.54. This is a $.09 increase from the $2.45 amount in effect for plan and policy years ending on or after October 1, 2018, but before October 1, 2019.

As a reminder, PCOR fees are payable by insurers and sponsors of self-insured plans (including sponsors of HRAs). The fee doesn’t apply to excepted benefits such as stand-alone dental and vision plans or most health FSAs. The fee, however, is required of retiree-only plans. The fee is calculated by multiplying the applicable dollar amount for the year by the average number of lives and is reported and paid on IRS Form 720 (which hasn’t yet been updated to reflect the increased fee). It’s expected that the form and instructions will be updated prior to July 31, 2020, since that’s the first deadline to pay the increased fee amount for plan years ending between October and December 2019. The PCOR fee is generally due by July 31 of the calendar year following the close of the plan year.

The PCOR fee requirement is in place until the plan years ending after September 30, 2029.

IRS Notice 2020-44 »

Source: NFP BenefitsPartners

Filed under: Abentras Blog

CMS Issues 2021 Notice of Benefit and Payment Parameters

On May 14, 2020, CMS released the Final Benefit and Payment Parameters for 2021, along with an accompanying fact sheet. The regulations are primarily directed at health insurers and the marketplace, but include important information that also affects large employers and self-insured group health plans. The effective date is July 13, 2020.

As background, these annual parameters specify the uniform standards for health plans subject to the ACA. Related regulatory and reporting issues are also prescribed. Accordingly, the guidance can serve as a useful planning tool for insurers and employers.

Overall, the 2021 regulations minimize regulatory changes in an effort to promote a more stable and predictable regulatory market. The guidance provides the updated plan cost-sharing limits and addresses the application of prescription drug coupons towards such limits. There are new annual reporting requirements with respect to state mandates for benchmark plans. Other highlights include amendments to the medical loss ratio (MLR) calculation and new notice obligations for non-federal government sponsors of excepted benefit health reimbursement arrangements (EBHRAs).

For 2021, the out-of-pocket maximum applicable to insured and self-funded plans is $8,550 for self-only coverage and $17,100 for family coverage. This limit is distinct from the 2021 IRS out-of-pocket maximum applicable to HSA-compatible high deductible health plans (HDHPs), which is $7,000 for self-only coverage and $14,000 for family coverage.

The guidance also clarifies that, to the extent consistent with state law, plans will be permitted, but not required, to count drug manufacturer coupons or discounts towards enrollees’ annual out-of-pocket limits. (The prior 2020 rule permitted the exclusion of coupons towards the cost-sharing limits only if the drug has a generic equivalent available.) However, the 2021 parameters do not address concerns regarding the applicability of drug coupons to an HSA-compatible HDHP. Accordingly, absent new guidance, these plans should continue to disregard the discounts in determining whether the HDHP statutory deductible has been satisfied.

The ACA requires non-grandfathered health plans in the individual and small group health plans to cover 10 essential health benefits (EHBs). States may require benefits in addition to the EHBs that are incorporated in the state benchmark plans. Beginning in 2021, states will be required to annually notify HHS of any such additional state-required benefits in a form and manner specified by HHS. The change is intended to ensure states are defraying the costs of additional required benefits for those advanced premium tax credits.

In an effort to lower premium amounts, the guidance amends the MLR regulations to require issuers to deduct prescription drug rebates and any other price discounts received by the issuer (or any entity providing pharmacy benefit management services to the issuer) from the incurred claim amount. This change is effective for the 2022 MLR reporting year. Additionally, issuers must report expenses for outsourced services in the same manner as expenses for non-outsourced services, to ensure that the full benefit of prescription drug rebates is reflected in premiums and not offset by outsourcing expenses.

For the benefit of employees, non-federal governmental plan sponsors that offer EBHRAs will now be required to provide a notice that includes the eligibility requirements, annual or lifetime benefit limits, and a summary of benefits generally consistent with ERISA requirements. The notice requirement was designed to ensure that employees received clear information about their excepted benefit offer regardless of whether the arrangement was subject to ERISA.

Employers may find this annual guidance helpful in designing their plan benefit offerings.

HHS Benefit and Payment Parameters Final Rule »
Final Benefit and Payment Parameters Fact Sheet »

Source: NFP BenefitsPartners

Filed under: Abentras Blog