Important Information about COVID-19

Member costs associated with COVID-19 testing have been waived. Contact Custom Design Benefits for information about cost sharing for your health plan related to COVID-19 treatment.

Employers Resource Association has created a decision tree to walk through whether or not Families First Coronavirus Response Act benefits are available under a particular situation.

Decision Tree

Under the Families First Coronavirus Response Act (FFCRA), those who work for employers with 500 or fewer employees may be entitled to up to 12 weeks of paid (up to $200/day) childcare leave. While some employees may have exhausted all 12 weeks of eligible leave during the spring, those who still have leave remaining may use it if their child’s school remains closed (or partially closed) to in-person learning this fall. Partially closed may include a hybrid where the child attends some days ‘live’ and other days virtual.

In a recent update to their FAQs, the Department of Labor (DOL) has indicated that an employee’s ability to use FFCRA leave last spring will not necessarily affect whether they can use such leave this fall. Additionally, an employer should not assume that the same child care schedule or arrangement that worked in the spring will work moving forward. As the DOL acknowledges, circumstances may change, including employees realizing they are not able to effectively provide childcare and work remotely at the same time. The DOL’s guidance reminds us this is not a sprint but a marathon and that employers will need to take changes under consideration.

The DOL also clarified that if a childcare provider or school is open to some students but not to an employee’s child (due to capacity or other COVID-related limitations), the school or child care provider is still considered “closed” to the student who is unable to attend. This means that an employee may be entitled to FFCRA leave to care for a child whose school utilizes a fully remote or “hybrid” model of in-person and distance learning. And similar to the regular Family and Medical Leave Act (FMLA), the FFCRA permits parents to use paid childcare leave intermittently in any amount, whether it be days at a time or only a few hours per day.

NEW: Update on Consolidated Appropriations Act of 2021

President Trump signed the Consolidated Appropriations Act of 2021 on December 27, 2020, which includes several provisions that employers can choose to implement that would allow changes to the following benefits without the immediate need for plan document amendments:

• Health Flexible Spending Accounts
• Dependent Care Spending Accounts
• Voluntary Extension Of Emergency Paid Sick Leave (EPSL)
• Voluntary Extension Of Extended FMLA (EFMLA) For Daycare/School Closures

Health Flexible Spending and Dependent Care Spending

Employers with Health Flexible Spending and Dependent Care Spending would be allowed, but not required to permit the following:

• Carryover of unused funds from plan year ending in 2020 to plan year ending in 2021.
• Carryover of unused funds from plan year ending in 2021 to plan year ending in 2022.
• Grace period for plan year ending in 2020 or 2021 may be extended to 12 months after the end of the plan year. (This refers to the Extended grace period some plans elect which is usually 21/2 months).
• Allow an employee who ceases participation in the plan during the calendar year 2020 or 2021 to continue to receive reimbursements from unused benefits or contributions through the end of the plan year their participation ceased.
• Employees may make prospective election changes in 2021 without incurring a Section 125 status event.

Dependent Care Spending Accounts Only

• Allows the substitution of “age 14” for the “age 13” in the definition of “Dependent” for purposes of the Dependent Care Assistance Program (DCAP).
• This applies to employees enrolled in the DCAP where the end of the regular enrollment period was on or before January 31, 2020, has one or more dependents who attain the age of 13 during the plan year and had an unused balance for that plan year.

Plan Amendments must be completed by the end of the first calendar year beginning after the end of the plan year in which the amendment is effective (e.g., calendar 2020 plan amendments must be adopted on or before December 31, 2021) provided the plan operates consistent with the terms of the amendment beginning on its effective date.

How to Make Changes
If you would like to adopt any of these changes, please contact your Account Manager to elect the provision/provisions best suited for your plan. A signed amendment is not required for any plan year ending in 2020 until December 31, 2021. CDB will administer the plan based on the client’s direction prior to the signing of the amendment.

Voluntary Extension of Emergency Paid Sick Leave & Extended FMLA

This Act has also extended the tax credits for the Emergency Paid Sick Leave and Extended FMLA. The mandate effective April 1, 2020 that required the adoption of this paid leave for employers under 500 employees will expire December 31, 2020. There is no obligation for employers to extend paid sick leave under FFCRA. However, employers that voluntarily offer the emergency paid sick leave after December 31, 2020 and emergency FMLA related to school or daycare closures will be eligible to receive the tax credit reimbursements for leave taken prior to March 31, 2021.

There is nothing in the law that provides additional paid leave time to employees. The Families First Coronavirus Response Act offered 10 paid workdays for symptoms, testing and quarantine due to COVIsD-19 and a total of 12 weeks of Extended paid FMLA to care for children effected by daycare or school closures. This leave runs concurrently with traditional FMLA.

If Custom Design Benefits currently provides EPSL or EFMLA administration for your company and you would like to elect to extend our services please contact our FMLA department at 888-661-3652.

The CARES ACT provides for FMLA expansion which may apply to your employer’s benefits. For more information about how this expansion applies to you and your health plan, please contact Custom Design Benefits.

Telehealth (telemedicine) primary care and specialist visits are covered just like other medically necessary office visits. They are for patients who need routine care for chronic or general health conditions, including behavioral health. Visits are primarily scheduled between patients and healthcare providers who already have an established relationship. Telephonic visits, in addition to web or app, will be covered at this time.

The CARES ACT permanently reinstates coverage of OTC (Over the Counter) drugs and medicines as eligible for reimbursement from FSAs, HRAs, HSAs, and Archer MSAs without need for a prescription. It further expands the definition of qualified OTC items to include menstrual care products. This change is effective for expenses incurred on or after January 1, 2020. It may take 4-6 weeks for some merchants to update their systems to accept the debit card at the point of sale; however, CDB is ready to accept manual claims immediately. For a list of eligible OTC products, visit the Healthcare Spending Account FAQ and Healthcare Spending Account Eligible Product links.

The Treasury Department and IRS announced March 21st the federal income tax filing due date was extended to July 15th which includes extensions of 2019 HSA contributions as well. Please let Custom Design Benefits know if you have any questions.

The U.S. Department of Labor’s Employee Benefits Security Administration (EBSA) issued under the Consolidated Omnibus Budget Reconciliation Act (COBRA) and revised COBRA model notices. Plan administrators can use these model notices to notify plan participants and beneficiaries of their rights under COBRA and qualified beneficiaries of their rights to elect COBRA.

In general, COBRA allows employees (and their families) who would otherwise lose their group health coverage due to certain life events to continue their same group health coverage. These events include termination or reduction in hours, death of a covered employee, divorce or legal separation, Medicare entitlement and loss of dependent status. COBRA generally lasts for 18 months but, in some cases, can last up to 36 months.

Under COBRA, group health plans must also provide covered employees and their families with certain notices explaining their COBRA rights. The revised model notices provide additional information to address COBRA’s interaction with Medicare. The model notices explain that there may be advantages to enrolling in Medicare before, or instead of, electing COBRA. It also highlights that if an individual is eligible for both COBRA and Medicare, electing COBRA coverage may impact enrollment into Medicare as well as certain out-of-pocket costs.

These documents will provide important information to COBRA-eligible individuals as they make healthcare choices for themselves and their families while assisting employers that must comply with the notice requirements under COBRA.

Custom Design Benefits has updated the COBRA notice with the additional model notice language. Once again, you can view that notice here.

Information on the COBRA Premium Subsidy for Employers, including FAQs and model forms, can be found here.

Information on the COBRA Premium Subsidy for Employees, including FAQs and model forms, can be found here.

As many of our members take maintenance medications, we are mindful of the desire to have an adequate supply of a prescription. During a declared emergency, KPP and Magellan Rx will be waiving refill limits and refill too soon requirements. Standard copays will still apply for the member.

The IRS has released the 2021 inflation-adjusted amounts for Health Savings Accounts.

• The HSA contribution limit for individual coverage will be $3,600. For family coverage, the limit will be $7,200.
• The minimum deductible for individual coverage will remain the same at $1,400. The minimum deductible for family coverage will remain the same at $2,800.
• The maximum out-of-pocket limit for individual coverage will be $7,000. The maximum out-of-pocket limit for family coverage will be $14,000.

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Extension of Certain Timeframes for Employee Benefit Plans

On May 4, 2020, the IRS and EBSA issued a joint rule extending certain timeframes related employee benefit plans. This rule is applicable to group health plans, disability and other welfare plans, and pension plans subject to ERISA and the Internal Revenue Code. In addition, HHS plans to adopt a similar policy to extend timeframes that would apply to non-Federal governmental group health plans subject to the Public Health Service Act.

The rule requires Plans to disregard the period from March 1, 2020 until 60 days after the end of the current National Emergency (Outbreak Period) when calculating the timeframes listed below:

• The 60-day election period for COBRA continuation coverage under ERISA and the Code.
• The date for mailing COBRA premium payments.
• The date for individuals to notify the plan of a qualifying event or determination of disability under ERISA section 6060(a)(3).
• The date within which individuals may file a benefit claim under the plan’s timely filing period.
• The date within which claimants can file an appeal of an adverse benefit determination.
• The date within which claimants can file a request for an external review after receipt of an adverse benefit determination or final internal adverse benefit determination.
• The date within which a claimant may file additional information for an external review upon finding that the request was not complete.
• With respect to the group health plan (sponsors and administrators), the Outbreak Period shall be disregarded when determining the date for providing a COBRA election notice.

This means that during the Outbreak Period, the clock is not running on any of these timeframes. For an event that occurred prior to March 1, 2020, if the applicable timeframe was not satisfied prior to March 1, the timeframe is effectively stopped as of that date, and will not be picked up again until after the end of the Outbreak Period.

What needs to be done to comply with the change in timeframes?
First of all, CDB does not recommend delaying the issuance of a COBRA election notice—especially for our group health plans covered under a stop loss carrier policy. In this time of uncertainty, it’s recommended that plans follow the processes that can be followed until further clarification is issued.

Secondly, be assured that CDB is working on plan amendments for our group medical clients to reflect these extensions. These amendments will be shared with you for inclusion in your Summary Plan Descriptions. There are no other notice requirements as a result of these extensions.

However, if you are a group self-funded client, we will include an insert in any COBRA Qualifying Event or other QB notices that includes information on the COBRA related extensions. A copy of that notice can be found here.

IRS Issues Notices to Relax Cafeteria Plan Election Rules for COVID-19 & Increase Health FSA Carryover

On May 12, the IRS released two notices providing relief on cafeteria plan election rules and increasing the allowed health FSA carryover. These notices are options for an employer to consider and not a requirement.

IRS Notice 2020-29 & 2020-33

This notice allows cafeteria plans to permit mid-year changes to election under a section 125 cafeteria plan related to employer sponsored health coverage, health care FSAs and dependent care FSAs. It also allows cafeteria plans to provide an extended grace period to pay or reimburse medical or dependent care expenses. And it provides clarification regarding recent COVID-19 related relief for HDHPs.

Here are the highlights:
Election Changes – Employers can amend cafeteria plans to allow the following prospective changes during the calendar year 2020:

1. New elections for employer-sponsored health coverage by employees who initially declined coverage.
2. Elections into different health coverage sponsored by the same employer (including employee coverage to family coverage).
3. Revocation of existing election for employer-sponsored health coverage. This option does require a self-attestation from the employee that he/she will immediately be enrolled in other comprehensive coverage.
4. Changes to health care or dependent care FSAs, including revocation, increase, decrease or new elections.

Employers that choose to amend the plan can determine the extent to which the additional elections will be permitted. Keep in mind that certain changes can create adverse selection and the changes cannot result in a discriminatory plan.

Sample self-attestation language can be found here.

Health Care and Dependent Care FSA Claims – Plans may be amended to allow employees to use any amounts remaining in a health care or dependent care FSA at the end of a plan year or grace period ending in 2020 to pay or reimburse expenses incurred through December 31, 2020.

Increase in Health care FSA maximum carryover – Under Notice 2020-33, the health care FSA maximum carryover is increased for a plan year to an amount equal to 20% of the maximum health care FSA. The 2021 maximum is $550 (20% of $2,750, the indexed 2020 contribution limit).

HDHP Relief – The notice clarifies that the CARES Act* provisions allowing a HDHP to cover telehealth and remote care services before the deductible has been met through the end of the plan year beginning on or before December 31, 2021 can be applied retroactively to January 1, 2020.

What needs to be done if we want to change our FSA/Cafeteria Plan
To take advantage of the relief pertaining to the cafeteria plans from the IRS Notices 2020-29 & 33, you can request a plan amendment(s) from your CDB Account Manager.

You can select from the following amendments:

• Election Changes
• Increase in carryover amounts
• Health care and Dependent Care FSA claim extension

Amendments for the 2020 plan year must be adopted on or before December 31, 2021 and may be effective retroactively to January 1, 2020.