Human Resources

The Washington Report

August 4, 2021

Note to Subscribers

The Washington Report will not be published on August 11, 2021. Look for your next Aon Washington Report on Wednesday, August 18, 2021.

Executive


President’s Plan to Increase Number of Vaccinated Americans Includes Employment-Related Directives
On July 29, 2021, President Biden announced a plan intended to increase the number of vaccinated Americans and slow the spread of the Delta variant. In a speech from the White House, the President outlined several steps to achieve those goals, including the following employment-related actions:

  • Small- and medium-sized businesses will be reimbursed for offering their employees paid leave to get their family members, including their children, vaccinated. (See “Tax Credits for Paid Leave Expanded to Cover Employees Accompanying Family Members for COVID Vaccinations” in the Other HR/Employment section of the newsletter.) The President also called on employers that have not offered paid time off to their employees for vaccination to do so.
  • Every federal government employee and onsite contractor will be asked to attest to their vaccination status. Those who do not attest to being fully vaccinated will be required to wear a mask, comply with weekly or twice-weekly screening tests, and satisfy certain other requirements. The President also intends to apply similar standards to all federal contractors (not only those who are on site), and the Administration will encourage employers across the private sector to follow this model, according to the Fact Sheet issued in conjunction with the President’s speech.

The Fact Sheet: President Biden to Announce New Actions to Get More Americans Vaccinated and Slow the Spread of the Delta Variant is available here.

Health


IRS Publishes Premium Assistance for COBRA Benefits Under ARP, Part II
On July 26, 2021, the Internal Revenue Service (IRS) published Notice 2021-46, which provides additional guidance on issues relating to the application of Section 9501 of the American Rescue Plan Act of 2021 (ARP), which provides temporary premium assistance for COBRA continuation coverage. This notice expands on guidance in Notice 2021-31, which was released by the IRS on May 18, 2021.

The questions addressed in Notice 2021-46 include availability of the premium assistance to individuals eligible for an extension who had not elected it; whether premium assistance for vision or dental-only coverage ends due to eligibility for other health coverage that does not include vision or dental benefits; availability of premium assistance under a state statute that limits continuation coverage to government employees; and whether employers may claim the premium assistance tax credit if the Small Business Health Options Program exchange requires employers to pay COBRA premiums and which party may claim the premium assistance tax credit in situations involving parties other than an insurer or former common law employer providing the COBRA coverage.

For additional information, see the Aon bulletin titled IRS Issues Additional ARP COBRA Subsidy Guidance in the Publications section of the newsletter.

IRS Notice 2021-46 is available here.

IRS Notice 2021-31 is available here.

HHS, DOJ Release Guidance on “Long COVID” as a Disability
On July 26, 2021, the Department of Health and Human Services (HHS) and the Department of Justice (DOJ) released joint guidance on “long COVID” as a disability. Individuals with long COVID (also known as “long-haulers”) continue to experience symptoms that can last months after first being infected with the virus. The latest guidance explains that long COVID can be a disability under Titles II (state and local government) and III (public accommodations) of the Americans with Disabilities Act (ADA), Section 504 of the Rehabilitation Act of 1973, and Section 1557 of the Affordable Care Act (ACA). Each of these federal laws protects people with disabilities from discrimination. The guidance also provides resources for additional information and best practices. However, HHS and the DOJ stated that the guidance “focuses solely on long COVID, and does not address when COVID-19 may meet the legal definition of disability.”

The guidance specifically addresses the following five questions:

  • What is long COVID and what are its symptoms?
  • Can long COVID be a disability under the ADA, Section 504, and ACA Section 1557?
  • Is long COVID always a disability?
  • What rights do people whose long COVID qualifies as a disability have under the ADA, Section 504, and the ACA Section 1557?
  • What federal resources are there for people with symptoms of long COVID?

The news release is available here.

The HHS and DOJ guidance is available here.

CMS Releases Proposed Rule on CY 2022 Hospital OPPS and ASC Payment Systems and Quality Reporting Programs; Also Addresses Price Transparency, Access to Care, Safety and Health Equity
On July 19, 2021, the Department of Health and Human Services’ Centers for Medicare & Medicaid Services (CMS) released a proposed rule that would revise the Medicare hospital outpatient prospective payment system (OPPS) and the Medicare ambulatory surgical center (ASC) payment system for Calendar Year (CY) 2022. The proposed rule describes the proposed changes to the amounts and factors used to determine the payment rates for Medicare services paid under the OPPS and those paid under the ASC payment system. The proposed rule would update and refine the requirements for the Hospital Outpatient Quality Reporting Program and the ASC Quality Reporting Program, update hospital price transparency requirements, and update and refine the design of the Radiation Oncology Model. Additionally, the proposed rule addresses health equity, access to emergency care in rural areas, COVID-19 lessons, improving patient experience and outcomes, and patient safety. Finally, the proposed rule includes a Request for Information focusing on the health and safety standards, quality measures, and reporting.

Comments on the proposed rule are due by October 4, 2021.

The CMS news release is available here.

The proposed rule is available here.

A Fact Sheet on the CY 2022 OPPS/ASC Payment System proposed rule is available here.

Retirement


IRS Issues ARP Funding Guidance for Single Employer Plans
On July 30, 2021, the Internal Revenue Service (IRS) released Notice 2021-48, which provides guidance on applying the single employer pension funding provisions of the American Rescue Plan Act of 2021 (ARP). The following briefly highlights some of the guidance provided:

  • Flexibility in Initial Application of ARP Provisions: The guidance confirms that the interest rate stabilization provisions of ARP may first be applied in any plan year during 2020–2022 and that the 15-year shortfall amortization provision may first be applied in any plan year during 2019–2022. By default, the interest rate provisions are effective in 2020 and the 15-year amortization provision is effective in 2022. A plan sponsor will need to make an election if they intend to apply different timing. The Notice provides details regarding the required form and timing of specific elections for ARP provisions, and allows for “deemed” elections based on information reported on the Form 5500 Schedule SB.
  • Extension of Usual Deadlines for Funding Balance Elections: The deadline for certain funding balance elections has been extended to December 31, 2021, for situations in which retroactive application of ARP would result in any of the following: (i) excess funding balances being applied to the minimum required contribution for a plan year; (ii) an increase in excess contributions that can be added to the prefunding balance for a plan year; or (iii) a decrease in the amount of funding balance that needs to be waived for a plan year.
  • Form 5500 Filing Implications: If a Form 5500 and Schedule SB have already been filed for a plan year without reflecting ARP, the plan sponsor can retroactively apply ARP for that plan year without needing to amend the Form 5500 filing and Schedule SB, unless contributions originally reported on the Schedule SB are re-designated for a later plan year as permitted by the notice.

See the full text of Notice 2021-48 for further guidance and details.

Notice 2021-48 is available here.

DOL Issues Temporary Implementing FAQs on Lifetime Income Illustrations
On July 26, 2021, the Department of Labor (DOL) issued four frequently asked questions (FAQs) on the lifetime income illustrations required under the Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act). These “temporary implementing” FAQs address questions the DOL received from commenters on the DOL’s 2020 interim final rule, which explained how to calculate the illustrations.

Q1: Earliest statement for which lifetime income illustrations are required for participant-directed defined contribution plans (e.g., 401(k) plans). For plans that issue quarterly statements, the earliest benefit statement for which lifetime income illustrations are required is for a quarter ending within 12 months after September 18, 2021 (the effective date of the interim final rule). This means that such plans have until the quarter ending June 30, 2022, to first incorporate the required lifetime income illustrations.

Q2: Earliest statement for which lifetime income illustrations are required for non-participant-directed defined contribution plans. The lifetime income illustrations must be on the statement for the first plan year ending on or after September 19, 2021. For calendar year plans, this will be the statement for calendar year 2021, which should be provided no later than October 15, 2022.

Q3 and Q4 discuss the use of lifetime income illustrations that are based on the guidance provided earlier in the DOL’s 2013 proposed regulations and whether transition relief will be provided if the DOL’s final regulation differs materially from the interim final rule, respectively.

The Temporary Implementing FAQs are available here.

Other HR/Employment


Tax Credits for Paid Leave Expanded to Cover Employees Accompanying Family Members for COVID Vaccinations
On July 29, 2021, the Internal Revenue Service (IRS) expanded its guidance on the paid sick and family leave credits under the American Rescue Plan Act of 2021 (ARP) to cover employee paid leave for COVID-19 vaccinations for family and household members. Specifically, the IRS updated its frequently asked questions (FAQs) on the paid sick and family leave credits to provide that eligible employers can claim credits for paid leave for:

  • Employees to accompany a family or household member or certain other individuals to obtain immunization relating to COVID-19; and
  • Employees to care for a family or household member or certain other individuals recovering from the immunization.

The news release is available here.

The updated FAQs are available here.

DOL Announces Final Rule to Rescind March 2020 Joint Employer Rule
On July 29, 2021, the Department of Labor (DOL) announced a final rule to rescind an earlier rule, “Joint Employer Status under the Fair Labor Standards Act,” that took effect in March 2020. The rescinded rule included a description of joint employment that the DOL stated was contrary to statutory language and Congressional intent and failed to take into account the DOL’s prior joint employment guidance.

Under the Fair Labor Standards Act, an employee can have more than one employer for the work they perform. Joint employment applies when—for the purposes of minimum wage and overtime requirements—the DOL considers two separate companies to be a worker’s employer for the same work.

The final rule becomes effective September 28, 2021.

The news release is available here.

The final rule rescinding the earlier joint employer rule is available here.

DOL to Offer Virtual Seminars in August to Help Employers, Employees, Stakeholders With Prevailing Wage Requirements
On July 22, 2021, the DOL announced it will help employers, workers, and other stakeholders understand federal standards for prevailing wages on federally funded construction and service contracts by offering virtual compliance seminars in August. The seminars are meant to assist contracting agencies, contractors, unions, workers, and other stakeholders.

The seminars will include video training on a variety of Davis-Bacon Act and Service Contract Act topics that participants can view on demand, followed by live question and answer sessions on several dates to accommodate participants’ schedules. Attendance is free, but registration is required by August 11, 2021.

The news release, including registration information, is available here.

IRS Issues Proposed Rule on Electronic-Filing Requirements for Specified Returns and Other Documents; Withdrawal of Previous Proposed Rule
On July 21, 2021, the IRS issued a proposed rule that would amend the rules for filing electronically and affect persons required to file partnership returns, corporate income tax returns, unrelated business income tax returns, withholding tax returns, and certain information returns, registration statements, disclosure statements, notifications, actuarial reports, and certain excise tax returns. The proposed amendments reflect changes made by the Taxpayer First Act of 2019 (TFA) and are consistent with the TFA’s emphasis on increasing electronic filing. This document would also withdraw proposed regulations published in the Federal Register on May 31, 2018, amending the rules for determining whether information returns must be filed electronically.

Comments on the proposed rule are due by September 21, 2021. The public hearing is being held by teleconference on September 22, 2021. Requests to speak and outlines of topics to be discussed at the public hearing must be received by September 21, 2021.

The proposed rule is available here.

DOL Announces Proposed Rule Implementing EO Increasing Wages for Federal Contractors
On July 19, 2021, the DOL announced a proposed rule to establish standards and procedures to implement and enforce Executive Order (EO) 14026 (“Increasing the Minimum Wage for Federal Contractors”), signed by President Biden on April 27, 2021. The EO will:

  • Increase the minimum wage for workers performing work on or in connection with covered federal contracts to $15 per hour beginning January 30, 2022.
  • Continue to index the federal contract minimum wage in future years to an inflation measure.
  • Eliminate the tipped minimum wage for federal contract workers by 2024.
  • Ensure a $15 minimum wage for workers with disabilities performing work on or in connection with covered contracts.
  • Restore minimum wage protections to outfitters and guides operating on federal lands.

Comments on the proposed rule are due by August 23, 2021.

The DOL news release is available here.

The proposed rule is available here.

EO 14026 is available here.

Aon Publications


IRS Issues Additional ARP COBRA Subsidy Guidance
The Internal Revenue Service (IRS) has issued a new set of COBRA frequently asked questions (FAQs) regarding COBRA premium assistance for COBRA coverage under the American Rescue Plan Act of 2021 (ARP). The new FAQs provide additional guidance regarding eligibility for COBRA premium assistance and how employers may claim the COBRA premium assistance tax credit. The 12 new FAQs supplement earlier guidance (Notice 2021-31) issued by the IRS in May 2021, which contained 86 FAQs.

The Aon bulletin is available here.

Now Available: Legal Consulting & Compliance Quarterly Update
The Retirement Legal Consulting & Compliance practice is pleased to present its Quarterly Update of recent legal developments for the third quarter of 2021. In this issue you will find the following articles:

  • Modernizing Section 127 for Today's Education Benefits
  • Excessive DC Plan Fee Litigation: Mitigation Strategies
  • Achieving Tax Certainty in an Era of IRS 'No Ruling' Policies
  • DOL Continues to Focus on Cybersecurity-Renewed Audit Efforts
  • What Did I Hear You Say? New Guidance Regarding Audio Recordings Involving Plan Information
  • Terminated DB Plan Excess Assets Can Fund DC Plan Match
  • Actuarial Equivalence Lawsuits—Current State of Play
  • Quarterly Roundup of Other New Developments
  • Recent Publications

The third quarter 2021 issue of the Retirement Legal Consulting & Compliance Aon Quarterly Update is available here.

ACA Requires Employers to Provide HIV PrEP-Related Services Without Cost-Sharing
On July 19, 2021, the Departments of Labor, Health and Human Services, and the Treasury issued a new set of Affordable Care Act (ACA) implementation FAQs that clarify the scope of HIV pre-exposure prophylaxis (PrEP) benefits that must be provided without cost-sharing under the ACA’s preventive services coverage mandate.

The Aon bulletin is available here.

HHS Again Renews COVID-19 Public Health Emergency Declaration
On July 19, 2021, Secretary of Health and Human Services (HHS) Xavier Becerra again renewed the public health emergency (PHE) declaration, extending the PHE for another 90 days through mid-October. The Secretary has the right to terminate the declaration prior to its expiration date.

The Aon bulletin on the renewal of the PHE is available here.



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