The Washington Report
May 13, 2020
Note to subscribers: Due to the current environment, information is changing at a rapid rate. While we do our best to provide timely updates, it is possible that the information shared in the newsletter may change or be revised after our publication deadline. Stay healthy and safe! ~The Washington Report team
CRS Updates ACA Report in Response to Pandemic
On May 5, 2020, the Congressional Research Service (CRS) updated its Patient Protection and Affordable Care Act (ACA): Resources for Frequently Asked Questions document in response to the COVID-19 pandemic. The report provides resources to help congressional staff respond to constituents’ frequently asked questions about the ACA. It lists selected resources regarding consumers, employers, and other stakeholders, with a focus on federal sources. It also lists CRS reports that summarize the ACA’s provisions. The CRS states that “the COVID-19 pandemic has raised questions among some constituents about how to obtain and use health coverage.”
The CRS report is available here.
IRS Releases Guidance on Section 125 Cafeteria Plans; Offering Increased Flexibility for Taxpayers
On May 12, 2020, the Internal Revenue Service (IRS) released guidance to allow temporary changes to Section 125 cafeteria plans. These changes extend the claims period for health flexible spending arrangements (FSAs) and dependent care assistance programs and allow taxpayers to make mid-year changes. According to the IRS, the guidance “addresses unanticipated changes in expenses because of the 2019 Novel Coronavirus (COVID-19) pandemic and provides that previously provided temporary relief for high-deductible health plans may be applied retroactively to January 1, 2020, and it also increases for inflation the $500 permitted carryover amount for health FSAs to $550.” The guidance was published in two Notices, briefly summarized below. Please refer to the Notices for specific information.
Notice 2020-29: This guidance provides greater flexibility for taxpayers by:
- Extending claims periods for taxpayers to apply unused amounts remaining in a health FSA or dependent care assistance program for expenses incurred for those same qualified benefits through December 31, 2020.
- Expanding the ability of taxpayers to make mid-year elections for health coverage, health FSAs, and dependent care assistance programs, allowing them to respond to changes in needs as a result of the COVID-19 pandemic.
- Applying earlier relief for high-deductible health plans to cover expenses related to COVID-19, and a temporary exemption for telehealth services retroactively to January 1, 2020.
This Notice responds to Executive Order 13877, which directs the Secretary of the Treasury to "issue guidance to increase the amount of funds that can carry over without penalty at the end of the year for flexible spending arrangements." The Notice increases the limit for unused health FSA carryover amounts from $500, to a maximum of $550, as adjusted annually for inflation.
The news release is available here.
IRS Notice 2020-29 is available here.
IRS Notice 2020-33 is available here.
CMS Releases Final 2021 Notice of Benefit and Payment Parameters Rule; Issues Letter to Issuers and 2020 Key Dates Chart
On May 7, 2020, the Centers for Medicare and Medicaid Services (CMS) released a final rule on the 2021 Notice of Benefits and Payment Parameters. The final rule establishes the payment parameters and provisions related to the risk adjustment and risk-adjustment data validation programs; cost-sharing parameters and cost-sharing reductions; and user fees for federally facilitated Exchanges and state-based Exchanges on the federal platform. The rule also finalizes changes related to essential health benefits and will provide states with additional flexibility in the operation and establishment of the Exchanges. The rule includes changes related to cost-sharing for prescription drugs; notice requirements for excepted benefit health reimbursement arrangements offered by non-federal governmental plan sponsors; Exchange eligibility and enrollment; exemptions from the requirement to maintain coverage; quality rating information display standards for Exchanges; and other related topics. The guidance also repeals regulations relating to the Early Retiree Reinsurance Program. The final rule becomes effective on July 13, 2020.
On the same day, CMS also issued the Final 2021 Annual Letter to Issuers which provides guidance to issuers that want to offer qualified health plans (QHPs) on a Federally facilitated Exchange (FFE) and the final Key Dates Chart for the 2020 Calendar Year.
The final rule is temporarily available here.
(The final rule will be published in the May 14, 2020, Federal Register.)
The news release is available here.
A fact sheet is available here.
Final key dates for Calendar Year 2020 for QHP Certification in the FFEs are available here.
The Final 2021 Letter to Issuers in the FFEs is available here.
A revised rate review timeline in light of COVID-19 is available here.
IRS Updates FAQs on Employee Retention Credit and Paycheck Protection Program
On May 8, 2020, the Internal Revenue Service (IRS) announced it updated frequently asked questions (FAQs) Numbers 64 and 65 regarding the COVID-19 Employee Retention Credit for how eligible employers treat health care expenses. Additionally, the IRS added a new FAQ (number 79) regarding businesses that repay their Paycheck Protection Program loan by May 14, 2020. The questions are listed below:
- Question 64: May an Eligible Employer that averaged 100 or fewer full-time employees in 2019 treat its health plan expenses as qualified wages for purposes of the Employee Retention Credit?
- Question 65: May an Eligible Employer that averaged more than 100 full-time employees in 2019 treat its health plan expenses as qualified wages for purposes of the Employee Retention Credit?
- Question 79: Is an employer that repays its Paycheck Protection Program loan by May 14, 2020, eligible for the Employee Retention Credit?
The FAQs on the employee retention credit are available here.
The FAQ on the Paycheck Protection Program is available here.
EEO Data Collections Delayed Due to Pandemic
On May 7, 2020, the Equal Employment Opportunity Commission (EEOC) announced in a Federal Register Notice that it will delay the anticipated opening of the 2019 EEO-1 Component 1 data collection and the 2020 EEO-3 and EEO-5 data collections because of the COVID-19 public health emergency. The equal employment opportunity (EEO) surveys collect data from employers in different sectors of the workforce. The EEOC was planning to open the following EEO surveys in 2020: the 2019 EEO-1 Component 1 (Employer Information Report); the 2020 EEO-3 (Local Report); and the 2020 EEO-5 (Elementary-Secondary Staff Information Report).
The EEOC stated that it “recognizes the impact that the current public health emergency is having on workplaces across America and the challenges that both employers and employees alike are now facing. Filers of the EEO-1, EEO-3, and EEO-5, which include private sector employers, local referral unions, and public elementary and secondary school districts, are dealing with unique and urgent issues. Delaying the collections until 2021 will ensure that EEO filers are better positioned to provide accurate, valid, and reliable data in a timely manner.” EEO-1, EEO-3, and EEO-5 filers should begin preparing to submit data in 2021. Pending approval from the Office of Management and Budget, the EEOC would expect to begin collecting the 2019 and 2020 EEO-1 Component 1 in March 2021 and will notify filers of the precise date the surveys will open as soon as it is available. The EEOC would expect to begin collecting the 2020 EEO-3 and the 2020 EEO-5 in January 2021 and will notify filers of the precise date the surveys will open as soon as it is available. In addition to updates to the agency website, the EEOC will be reaching out directly to EEO-1, -3, and -5 filers regarding the delayed opening of the surveys. Please refer to the EEOC website for additional information and updates.
The Federal Register Notice is available here.
Information on the EEO Reports and Surveys is available here.
EEOC Updates Technical Assistance Questions and Answers on Returning to Work During Pandemic
On May 5, 2020, the EEOC again updated its technical assistance questions and answers (What You Should Know About COVID-19 and the ADA, the Rehabilitation Act, and Other EEO Laws). The questions address: disability-related inquiries and medical exams; confidentiality of medical information; hiring and onboarding; reasonable accommodation; pandemic-related harassment; furloughs and layoffs; and returning to work. The latest update provides guidance on returning to work, as noted in the following questions:
- What does an employee need to do in order to request reasonable accommodation from her employer because she has one of the medical conditions that the Centers for Disease Control and Prevention (CDC) says may put her at higher risk for severe illness from COVID-19?
- The CDC identifies a number of medical conditions that might place individuals at “higher risk for severe illness” if they get COVID-19. An employer knows that an employee has one of these conditions and is concerned that his health will be jeopardized upon returning to the workplace, but the employee has not requested accommodation. How does the Americans with Disabilities Act (ADA) apply to this situation?
- What are examples of accommodation that, absent undue hardship, may eliminate (or reduce to an acceptable level) a direct threat to self?
The updated technical questions and answers are available here.
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