Category: Abentras Blog

IRS Releases Filing and Payment Deadline Questions and Answers

On March 25, 2020, the IRS released a set of questions and answers on the recently-extended federal income tax filing and payment deadline. The release was designed to assist taxpayers and tax professionals in understanding the scope and impact of the extension.

As background, in Notice 2020-18, the IRS announced special federal income tax return filing and payment relief in response to the ongoing coronavirus (COVID-19) emergency. This relief extended the federal income tax filing deadline from April 15, 2020, to July 15, 2020.

The new guidance explains that any type of taxpayer, such as an individual, a trust, an estate, a corporation, or any type of unincorporated business entity, with a return or payment due on April 15, 2020, is eligible for the relief. (The taxpayer does not need to have been impacted by COVID-19 in any particular way.) Additionally, the relief extends to both 2019 federal income tax payments (including payments of tax on self-employment income) and 2020 estimated federal income tax payments due on April 15, 2020. However, normal filing, payment, and deposit due dates continue to apply to both payroll and excise taxes.

As a result of the extended filing deadline, taxpayers now also have until July 15, 2020, to make 2019 contributions to their HSAs and IRAs. Employers with April 15, 2020, filing deadlines may also have additional time to make 2019 contributions to certain workplace retirement plans.

Employers may find these questions and answers helpful in understanding the details and effects of the available tax relief. The IRS has indicated the material will be updated periodically in this changing environment. These questions and answers are accessible at the below link:

Filing and Payment Deadlines Questions and Answers »

Filed under: Abentras Blog

CMS Issues FAQs on Catastrophic Plan Coverage and COVID-19

On March 18, 2020, CMS provided a set of FAQs that discusses the coverage of COVID-19 treatment in catastrophic plans. As background, insurers are generally not permitted to modify the health insurance coverage for a product midyear.

The FAQs address two questions:

  • *Question and Answer 1 confirms that catastrophic plans must cover essential health benefits (EHB), such as the diagnosis and treatment of COVID-19. However, this coverage is subject to certain limitations, and can vary by plan. A catastrophic plan may not provide coverage of EHB before an enrollee meets their catastrophic plan deductible for that applicable plan year, except as follows: 1) a catastrophic plan must provide coverage for at least three primary care visits per year before reaching the deductible, and 2) in accordance with section 2713 of the Public Health Service Act (PHS Act), a catastrophic plan may not impose any cost-sharing requirements (such as a copayment, coinsurance or deductible) for preventive services.
    *Question and Answer 2 confirms that HHS will not take enforcement action against any health insurance issuer that amends its catastrophic plans to provide pre-deductible coverage for services associated with the diagnosis and/or treatment of COVID-19, and encourages states to follow suit.
  • Employers should consider this guidance as they provide coverage to participants who may be diagnosed with and treated for COVID-19.

    FAQs on Catastrophic Plan Coverage and COVID-19 »

    Source: NFP BenefitsPartners

    Filed under: Abentras Blog

    DOL Issues FMLA Guidance for Coronavirus Public Health Emergency

    On March 9, 2020, the DOL issued guidance on the application of the FMLA during a public health emergency. The release was in the form of questions and answers designed to assist employers with preparing workplaces for the coronavirus crisis.

    As background, the FMLA requires covered employers to provide job-protected unpaid leave to employees for specified family and medical reasons. Under the FMLA, employees are entitled to the continuation of group health insurance coverage under the same terms as existed prior to the leave.

    The guidance explains that an employee who is sick or whose family members are sick may be entitled to FMLA leave under certain circumstances. Such circumstances may include a viral illness, where complications arise that create a serious health condition. However, FMLA leave does not apply to employees who stay home from work to avoid exposure to a virus or to care for healthy children who have been dismissed from school as a preventive measure.

    The release further emphasizes the importance of developing a plan of action for the workplace in the event of a pandemic outbreak, and communicating the plan to employees. Such plan may permit employees showing symptoms of pandemic disease to be sent home, or require certifications that inflicted employees are able to resume work. Any such policy would need to comply with applicable non-discrimination laws. Although paid leave is generally not required by the FMLA or other federal laws, an employer would need to take state and local laws and other obligations (e.g., employment contracts) into account.

    Employers may find these questions and answers helpful in addressing various workplace situations and contingencies resulting from the coronavirus pandemic. The complete release is accessible at the below link:

    COVID-19 and Other Pandemics and the FMLA »

    Source: NFP BenefitsPartners

    Filed under: Abentras Blog

    CMS Issues FAQs on Essential Health Benefits and the Coronavirus

    On March 12, 2020, CMS provided a set of FAQs that discusses the designation of COVID-19 treatment as an essential health benefit (EHB). As background, under the ACA, plans may not impose annual or lifetime limits on essential health benefits.

    The FAQs address three questions:

  • *Question and answer 1 confirms that the diagnosis and treatment of COVID-19 would be considered essential health benefits. However, each plan may determine the exact coverage details and any cost-sharing amounts that would apply to those services.

    *Question and answer 2 discusses whether COVID-19-related isolation or quarantine would be treated as EHB. On this issue, CMS confirms that hospitalizations for COVID-19 treatment would be considered an EHB. However, self-imposed isolation or quarantine at home is not considered a medical benefit, and therefore would not be covered as an EHB. Keep in mind, though, that medical benefits provided at home that are required by a medical provider (through home health care or telemedicine) would be covered as EHB.

    *Question and answer 3 provides that when a COVID-19 vaccine becomes available, it would be covered without cost sharing, pursuant to the ACA’s preventive care mandate. While such a vaccine would generally not be required to be provided without cost sharing until 12 months after the Advisory Committee on Immunization Practices of the CDC recommends them, CMS indicates that plans may voluntarily choose to provide the vaccine with or without cost sharing prior to that date. The answer also indicates that a participant with a plan that does not cover the vaccine may use the plan’s drug exceptions process to request that the vaccine be covered under the plan.

  • Employers should consider this guidance as they provide coverage to participants who may be diagnosed with and treated for COVID-19.

    FAQs on Essential Health Benefit Coverage and the Coronavirus »

    Source: NFP BenefitsPartners

    Filed under: Abentras Blog

    Supreme Court will Hear ACA Appeal During Fall Term

    On March 2, 2020, the Supreme Court announced that it will review a ruling by the U.S. Court of Appeals for the Fifth Circuit that found the individual mandate of the ACA – and possibly other provisions of the ACA – are unconstitutional. The Court will take up TX v. US during its October 2020 term. As such, the Court will not likely issue its own decision until after the November 2020 elections.

    The ACA is still in force and plan sponsors should continue to comply with the various mandates imposed by the law. We will continue to follow any developments as this case makes its way through the appeals process.

    Source: NFP BenefitsPartners

    Filed under: Abentras Blog

    Agencies Issue FAQs Regarding 2021 Updates to SBC Template, Calculator, and Narratives

    On February 3, 2020, the DOL, HHS, and the Department of the Treasury issued two FAQs concerning the application of recent updates to SBC materials.

    These agencies are charged with developing standards that group health plans and health insurance issuers can apply when compiling and providing SBCs to plan participants in accordance with the ACA. On November 7, 2019, updates to the SBC template, coverage examples calculator, guide, and narratives for coverage examples were released.

    The first FAQ states that group health plans and health insurance issuers must use these updated materials beginning on the first day of the first open enrollment period for plan years beginning on or after January 1, 2021.

    The second FAQ clarifies that using the calculator is not mandatory. It is a tool to help group health plans and health insurance issuers to generate the estimated out-of-pocket costs that a consumer can expect to pay under the plan for the coverage examples on the SBC. The calculator makes several assumptions that may not apply to particular plans or policy designs, so the agencies allow the plans and issuers to create their own calculators or to modify the calculator as necessary. However, plans and issuers can use the calculator even when they could develop more accurate methods for generating coverage examples, because it retains its status as a safe harbor.

    Employers should be aware of the 2021 updates to SBC materials, their application, and when they must be applied.

    2021 Updates to the SBC Template, Calculator, Guide and Narratives »

    Source: NFP BenefitsPartners

    Filed under: Abentras Blog

    Fifth Circuit Rejects Call to Rehear ACA Appeal

    On January 29, 2020, the United States Court of Appeals for the Fifth Circuit announced that it would not revisit its earlier decision in the TX v. US case. That decision was made by a panel of three judges, and could have been reviewed by the entire Court under certain circumstances. In this case one of the appellate court judges made the request to have the entire Court hear the case. However, as a result of this decision, the case will proceed as originally ordered by the appellate court.

    As background, on December 18, 2019, the Fifth Circuit ruled that the individual mandate was unconstitutional because Congress declined to exercise its constitutional taxing authority to penalize citizens who did not obtain health insurance. Although the District Court that first heard this case also ruled that the loss of the individual mandate meant that the entire ACA was also unconstitutional, the Fifth Circuit was not convinced. Instead, the appellate court remanded the case back to the District Court to examine that question more closely and provide more detail about what provisions in the ACA would fail and rule on whether other provisions could stand.

    On an 8-6 vote, the entire Fifth Circuit decided not to review the case, which means that the case will proceed in a remand to the District Court. Although the defendants in the case asked the Supreme Court to expedite its consideration of this case, the Supreme Court declined to do so.

    The ACA is still in force and plan sponsors should continue to comply with the various mandates imposed by the law. We will continue to follow any developments that come from TX v. US.

    Fifth Circuit Order »

    Source: NFP BenefitsPartners

    Filed under: Abentras Blog

    IRS Publishes Updated Publication 502

    On January 21, 2020, the IRS released the updated version of Publication 502 (Medical and Dental Expenses). The publication has been updated for use in preparing taxpayers’ 2019 federal income tax returns.

    Publication 502 describes which medical expenses are deductible on taxpayers’ federal income tax returns. For employers, Publication 502 provides valuable guidance on which expenses might qualify as IRC Section 213(d) medical expenses, which is helpful in identifying expenses that may be reimbursed or paid by a health FSA, HRA (or other employer-sponsored group health plan), or an HSA. However, employers should understand that Publication 502 does not include all of the rules for reimbursing expenses under those plans.

    The recently released Publication 502 is substantially similar to prior versions. Dollar amounts have been updated where appropriate to account for inflation (e.g. the standard mileage rate for use of an automobile to obtain medical care).

    Publication 502 »

    Source: NFP BenefitsPartners

    Filed under: Abentras Blog

    IRS Information Letter Reminds Employers of Qualifying Event Rules

    The IRS recently released an information letter that reiterates the election change rules under Section 125 of the IRC, which applies if employees are allowed to pay premiums on a pre-tax basis. The IRS letter responds to an inquiry concerning a DCAP participant who wanted to make an election change due to “a disrupted or unforeseeable childcare environment” that occurred outside of the plan’s open enrollment. Although the letter doesn’t go into any greater detail on the inquiry, the IRS does reiterate the Section 125 rules.

    Specifically, they confirm that election changes must be made before the start of the plan year, and participants may not change their election mid-year unless they experience a qualifying event. Additionally, the letter explains that the plan may allow employees to change their election mid-year if the participant experiences a significant change in coverage or a significant increase or decrease in the cost of coverage. However, the plan is not required to do so, and the plan must be operated in accordance with plan terms.

    This letter does not provide any new or updated information, but it does serve as a good reminder to employers that they must follow Section 125’s qualifying event rules. They may choose whether to recognize the IRS’ permissible qualifying events, but it’s important that the events they recognize be reflected in the plan document and that the employer not allow for employees to make mid-year changes without experiencing one of the plan’s permissible events.

    IRS Information Letter »

    Source: NFP BenefitsPartners

    Filed under: Abentras Blog

    DOL Announces 2020 Adjustments to ERISA Penalties

    On January 15, 2020, the DOL published a final rule adjusting civil monetary penalties under ERISA. As background, the annual adjustments relate to a wide range of compliance issues and are based on the percentage increase in the consumer-price index-urban (CPI-U) from October of the preceding year. The DOL last adjusted certain penalties under ERISA in January of 2019.

  • *Highlights of the penalties that may be levied against sponsors of ERISA-covered plans include:
    *Failure to file Form 5500 maximum penalty increases from $2,194 to $2,233 per day that the filing is late
    *Failure to furnish information requested by the DOL penalty increases from $156 to $159 maximum per day
    *Penalties for a failure to comply with GINA and a failure to provide CHIP notices increases from $117 to $119 maximum per day
    *Failure to furnish SBCs penalty increases from $1,156 to $1,176 maximum per failure
    *Failure to file Form M-1 (for MEWAs) penalty increases from $1,597 to $1,625 per day
  • These adjusted amounts are effective for penalties assessed after January 15, 2020, for violations that occurred after November 2, 2015. The DOL will continue to adjust the penalties no later than January 15 of each year and will post any changes to penalties on their website.

    To avoid the imposition of penalties, employers should ensure ERISA compliance for all benefit plans and stay updated on ERISA’s requirements. For more information on the new penalties, including the complete listing of changed penalties, please consult the final rule below.

    Final Rule »

    Source: NFP BenefitsPartners

    Filed under: Abentras Blog