The Washington Report
December 9, 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
House Approves Bill Decriminalizing Marijuana; Senate Passage Unlikely
On December 4, 2020, the House passed with a 228–164 vote the Marijuana Opportunity Reinvestment and Expungement Act (MORE Act – H.R. 3884), which would decriminalize marijuana. Specifically, it would remove marijuana from the list of scheduled substances under the Controlled Substances Act and eliminate criminal penalties for an individual who manufactures, distributes, or possesses marijuana. Senate passage is unlikely.
The full text of H.R. 3884 is available here.
CMS Releases Proposed Rule on 2022 Notice of Benefit and Payment Parameters
On November 25, 2020, the Centers for Medicare and Medicaid Services (CMS) released a proposed rule on the annual Notice of Benefit and Payment Parameters for the 2022 benefit year. In the rule, CMS proposed standards for states, issuers, Exchanges, pharmacy benefit managers, direct enrollment entities, and the administrative appeals processes with respect to health insurance issuers and non-federal governmental plan sponsors. This proposed rule sets forth payment parameters and provisions related to the risk-adjustment program; cost-sharing parameters and cost-sharing reductions; and user fees for federally facilitated Exchanges and state-based Exchanges on the federal platform. It includes proposed changes related to special enrollment periods; Navigator program standards; direct enrollment entities; the administrative appeals processes with respect to health insurance issuers and non-federal governmental group health plans; the medical loss ratio program; acceptance of payments by issuers of individual market qualified health plans; and other related topics. It proposes clarifications to the regulation imposing network adequacy standards with regard to qualified health plans that do not use provider networks. It proposes changes to the regulation requiring the reporting of certain prescription drug information by qualified health plans or their pharmacy benefit managers. It also proposes a new direct enrollment option for federally facilitated Exchanges and state Exchanges. This proposed rule also proposes changes related to Section 1332 State Innovation Waivers.
Comments on the proposed rule are due 30 days after publication in the Federal Register (date unknown at this time).
The press release is available here.
The proposed rule is temporarily available here.
(Federal Register Disclaimer: This Department of Health and Human Services (HHS)-approved document has been submitted to the Office of the Federal Register (OFR) for publication and has not yet been placed on public display or published in the Federal Register. The document may vary slightly from the published document if minor editorial changes have been made during the OFR review process. The document published in the Federal Register is the official HHS-approved document.)
A Fact Sheet is available here.
IRS Updates FAQs on Qualified Health Plan Expenses for Purposes of COVID Impact Payments
On November 25, 2020, the Internal Revenue Service (IRS) updated its Frequently Asked Questions (FAQs) on “Determining the Amount of Allocable Qualified Health Plan Expenses for Purposes of Coronavirus Economic Impact Payments.” Qualified health plan expenses are amounts paid or incurred by the Eligible Employer to provide and maintain a group health plan (as defined in Section 5000(b)(1) of the Internal Revenue Code (the Code)), but only to the extent that those amounts are excluded from the gross income of employees by reason of Section 106(a) of the Code. Generally, the tax credits for qualified sick leave wages and qualified family leave wages are increased by the qualified health plan expenses allocable to each type of qualified leave wages. Qualified health plan expenses are properly allocated to the qualified sick or family leave wages if the allocation is made on a pro rata basis among covered employees (for example, the average premium for all employees covered by a policy) and pro rata on the basis of periods of coverage (relative to the time periods of leave to which such wages relate). Questions 31–36 were updated as listed below:
- Does the amount of qualified health plan expenses include both the portion of the cost paid by the Eligible Employer and the portion of the cost paid by the employee?
- For an Eligible Employer that sponsors more than one plan for its employees (for example, both a group health plan and a health flexible spending arrangement (health FSA)), or more than one plan covering different employees, how are the qualified health plan expenses for each employee determined?
- For an Eligible Employer that sponsors a fully insured group health plan, how are the qualified health plan expenses of that plan allocated to the qualified sick or family leave wages on a pro rata basis?
- For an Eligible Employer who sponsors a self-insured group health plan, how are the qualified health plan expenses of that plan allocated to the qualified leave wages on a pro rata basis?
- For an Eligible Employer who sponsors a health savings account (HSA), or Archer Medical Saving Account (Archer MSA) and a high-deductible health plan, are contributions to the HSA or Archer MSA included in the qualified health plan expenses?
- For an Eligible Employer who sponsors a health reimbursement arrangement (HRA), a health FSA, or a qualified small employer health reimbursement arrangement (QSEHRA), are contributions to the HRA, health FSA, or QSEHRA included in the qualified health plan expenses?
The updated FAQs are available here.
IRS Releases Adjusted Applicable Dollar Amount for PCORTF Fee for Insured and Self-Insured Health Plans
On November 24, 2020, the IRS released Notice 2020-84, which provides that the adjusted applicable dollar amount that applies for determining the Patient-Centered Outcomes Research Trust Fund (PCORTF) fee for policy years and plan years ending on or after October 1, 2020, and before October 1, 2021, is equal to $2.66. This adjusted applicable dollar amount has been determined using the percentage increase in the projected per capita amount of the National Health Expenditures published by the HHS in March 2020. Sections 4375 and 4376, added to the Code by the Affordable Care Act, impose a fee on issuers of specified health insurance policies and plan sponsors of applicable self-insured health plans to help fund the PCORTF. The fee originally expired on October 1, 2019, but was extended by the Further Consolidated Appropriations Act, 2020.
IRS Notice 2020-84 is available here.
HHS/CMS Announce Prescription Drug Payment Model for Medicare Part B Drugs
On November 20, 2020, HHS announced an interim final rule which details the drug payment model through the Center for Medicare and Medicaid Innovation at the CMS that will lower Medicare Part B payments for certain drugs to the lowest price for similar countries. According to the news release, beginning in January 2021, the model, known as the Most Favored Nation (MFN) Model, will “test an innovative way for Medicare to pay no more for high-cost, physician-administered Medicare Part B drugs than the lowest price charged in other similar countries. Following the President's recent Executive Orders to lower drug prices and improve access to life-saving medications, the MFN Model will protect current beneficiary access to Medicare Part B drugs, make them more affordable, and address the disparity of drug costs between the U.S. and other countries.” The interim final rule becomes effective when published in the Federal Register (date unknown). Comments on the interim final rule are due 60 days after publication in the Federal Register.
The news release “Trump Administration Announces Prescription Drug Payment Model to Put American Patients First” is available here.
A CMS Fact Sheet on the “Most Favored Nation Model for Medicare Part B Drugs and Biologicals Interim Final Rule with Comment Period” is available here.
The interim final rule is temporarily available here.
(Federal Register Disclaimer: This HHS-approved document will be submitted to the OFR for publication and has not yet been placed on public display or published in the Federal Register. The document may vary slightly from the published document if minor editorial changes have been made during the OFR review process. The document published in the Federal Register is the official HHS-approved document. Public comments on the rule can be submitted through www.regulations.gov and must be received no later than 60 days after publication in the Federal Register.)
HHS Finalizes Rule on Eliminating Medicare Part D Drug Rebates
On November 20, 2020, HHS finalized a rule to eliminate the current system of drug rebates in Medicare Part D, in order to “create incentives to lower list prices and reduce out-of-pocket spending on prescription drugs by delivering discounts directly at the pharmacy counter.” The release of this final regulation is in response to President Trump’s July 24, 2020, Executive Order on “Lowering Prices for Patients by Eliminating Kickbacks to Middlemen.” The final rule becomes effective 60 days after publication in the Federal Register (date unknown). Several amendments to the rule are effective on January 1, 2022. Please refer to final rule for details.
The news release “HHS Finalizes Rule to Bring Drug Discounts Directly to Seniors at the Pharmacy Counter” is available here.
The July 24, 2020, Executive Order on “Lowering Prices for Patients by Eliminating Kickbacks to Middlemen,” is available here.
The HHS Fact Sheet is available here.
The final rule is temporarily available here.
(Federal Register Disclaimer: This HHS-approved document has been submitted to the OFR for publication and has not yet been placed on public display or published in the Federal Register. The document may vary slightly from the published document if minor editorial changes have been made during the OFR review process. The document published in the Federal Register is the official HHS-approved document.)
Advance Copies of 2020 Form 5500 Series Annual Return/Report Now Available
On December 2, 2020, the Department of Labor’s Employee Benefits Security Administration (EBSA), the Internal Revenue Service (IRS), and the Pension Benefit Guaranty Corporation released advance informational copies of the 2020 Form 5500 Annual Return/Report and related instructions, including the Form 5500-SF and the IRS-released Form 5500-EZ, which now also appear on the EBSA website. Modifications have been made to the following areas:
- Electronic Filing of the Form 5500-EZ;
- Administrative Penalties;
- Schedule H Part III- Accountant’s Opinion;
- Schedules H and I, Line 4l and Form 5500-SF, Line 10f;
- Schedules H and I, Line 5c; and
- Schedule R, Line 14 (multiemployer plans).
Please refer to the news release and the EBSA Form 5500 website for specific details.
The EBSA news release is available here.
Informational copies of the forms, schedules, and instructions are available on the EBSA Form 5500 website here.
EEOC Launches EEOC Explore, a New Data Tool Tracking Employment Trends
On December 2, 2020, the Equal Employment Opportunity Commission (EEOC) launched EEOC Explore, a new interactive data query and mapping tool that gives users access to the “most current, granular, and privacy-protected aggregate EEO-1 data publicly available.” EEOC Explore allows users to analyze aggregate data associated with more than 56 million employees and 73,000 employers nationwide. The tool enables users to explore and compare data trends across a number of categories, including location, sex, race, ethnicity, and industry sector without the need for experience in computer programming or statistical analysis.
EEOC Explore uses aggregate information from employer EEO-1 reports which include data such as employee demographics, which are collected annually from private employers with 100 or more employees and federal contractors with 50 or more employees.
The press release is available here.
The new EEOC Explore tool is available here.
EEOC Revises Three Documents Addressing Employment of Veterans With Disabilities
On November 27, 2020, the EEOC issued three revised documents that address the employment of veterans with disabilities. The documents discuss how the Americans with Disabilities Act and the Uniformed Services Employment and Reemployment Rights Act apply to veteran employees and those who employ them.
The revised publications are:
- EEOC Efforts for Veterans with Disabilities
- Understanding Your Employment Rights Under the Americans with Disabilities Act: A Guide for Veterans
- Veterans and the Americans with Disabilities Act: A Guide for Employers
The “EEOC Efforts for Veterans with Disabilities” publication is available here.
The “Understanding Your Employment Rights Under the Americans with Disabilities Act: A Guide for Veterans” publication is available here.
The “Veterans and the Americans with Disabilities Act: A Guide for Employers” publication is available here.
IRS Updates FAQs Determining the Amount of the FFCRA Tax Credit for Qualified Family Leave Wages
On November 25, 2020, the IRS updated its Frequently Asked Questions (FAQs) on Determining the Amount of the Families First Coronavirus Response Act (FFCRA) Tax Credit for qualified family leave wages. The Family and Medical Leave Act (FMLA) generally entitles eligible employees of covered employers to unpaid, job-protected leave for specified family and medical reasons. The FFCRA amended the FMLA to require an Eligible Employer to provide qualified family leave wages when an employee is unable to work or telework due to a need for leave to care for a child of the employee if the child’s school or place of care has been closed, or because the child care provider of the child is unavailable, for reasons related to COVID-19. Questions 25–30 were updated as listed below:
- What is included in “qualified family leave wages”? Do “qualified family leave wages” include taxes imposed or withheld from the wages?
- How much credit may an Eligible Employer receive for qualified family leave wages?
- How does an Eligible Employer determine the amounts of the qualified family leave wages it is required to pay?
- What is the rate of pay for qualified family leave wages?
- Are amounts other than qualified family leave wages included in the tax credit for required paid family leave?
- Is a similar tax credit available to self-employed individuals?
The updated FAQs are available here.
DOL Updates FAQs Addressing Cloth Face Coverings as Personal Protective Equipment
On November 19, 2020, the Department of Labor’s (DOL’s) Occupational Safety and Health Administration (OSHA) published an update to its FAQs to address whether OSHA considers cloth face coverings to be personal protective equipment. The agency is addressing the topic after the Centers for Disease Control and Prevention recently determined that some cloth face coverings may serve as source control while also providing the wearer with some personal protection.
The FAQ states that OSHA “does not believe enough information is currently available to determine if a particular cloth face covering provides sufficient protection from the coronavirus hazard to be personal protective equipment under OSHA’s standard... OSHA continues to encourage workers strongly to wear face coverings when in close contact with others to reduce the risk of spreading the coronavirus, if it is appropriate for the work environment.”
The news release is available here.
The COVID-19 FAQs are available here.
OSHA’s COVID-19 website is available here.
EEOC Requests Public Comment on Revised Enforcement Guidance on Religious Discrimination
On November 17, 2020, the EEOC announced that it is seeking public input on its updated Compliance Manual Section on Religious Discrimination (Manual). The updated guidance describes in what ways Title VII of the Civil Rights Act of 1964 protects individuals from religious discrimination in the workplace and sets forth the legal protections available to religious employers. During a public meeting on November 9, 2020, the EEOC voted to publish its proposed changes to the Manual.
According to the EEOC, the current version of the Manual, last updated in 2008, does “not reflect recent legal developments and emerging issues. Since 2008, several Supreme Court decisions, as well as the lower courts, have altered the legal landscape. The revisions to the guidance include important updates to the discussion of protections for employees from religious discrimination in the context of reasonable accommodations and harassment. It also expands the discussion of defenses that may be available to religious employers.”
After reviewing the public commentary, the EEOC will consider appropriate revisions to the draft guidance before finalizing it and replacing the 2008 version. The 30-day input period ends on December 17, 2020.
The news release is available here.
The EEOC draft guidance is available for review here.
Implications of a Mandatory Employee COVID-19 Vaccination Program
As a vaccine against the novel coronavirus moves closer to reality, employers are starting to ask about the impact of a COVID-19 vaccine on reopening their workplaces and permitting employees to return to work in 2021. This Aon bulletin discusses factors employers should consider in deciding whether to require employees to be vaccinated against COVID-19 before returning to the workplace.
These factors include:
- Implementing a Mandatory COVID-19 Employee Vaccination Program
- Administering Exemptions From an Employee Vaccination Program
- Access to the COVID-19 Vaccine
- Communicating the Mandatory COVID-19 Vaccination Program to Employees
- Obtaining Evidence of a COVID-19 Vaccination
- Dealing With Reluctant Employees
- Risks of Employee Lawsuits
- Paying for the COVID-19 Vaccine
This Aon bulletin will be supplemented as legislatures, government agencies, and courts provide additional guidance for employers in this area.
This bulletin is available here.
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