Category: COVID-19 Resource Center

New Jersey now requires workers in certain key industries, including healthcare, education and public service, to be vaccinated or to undergo regular COVID testing if they are not yet vaccinated. This Update provides information on the recently released NJ Executive Order 253 (Vaccine or Testing Requirements) requiring workers in preK-12 settings to submit proof of full vaccination or submit to COVID testing at least once or twice a week, effective October 18, 2021. This Order will apply to all education workers, including full and part time employees, contractors, regular volunteers, and others working in the covered preK-12 settings school grounds. It applies to public, private, and parochial schools, including charter and renaissance schools.

Helpful NJEA Guidance
The New Jersey Education Association (NJEA) has posted a helpful set of Q&As related to the Order based on information made publicly available by the State of NJ, the NJ Department of Health (DOH), the Centers for Disease Control and Prevention (CDC), and the Equal Employment Opportunity Commission (EEOC). According to the Q&As:

• Those who do not submit proof of vaccination by October 18, 2021 will be required to be tested at least once or twice weekly.
• Employers can require testing more often than twice weekly if they chose. The test can either be antigen or molecular; rapid tests will not be accepted.
• Tests can be taken on-site by the employer or proof uploaded by the worker.
• Test results must be stored according to the confidentiality provisions of the Americans with Disabilities Act (ADA) and other applicable privacy laws.
• Employers must have a policy for tracking test results and report results to local health departments.

Screening Testing
The NJ DOH has issued a recommendations document indicating (at page 14) that schools should use screening testing as a strategy to identify cases and prevent secondary transmission. Screening testing involves using SARS-CoV-2 viral tests (diagnostic tests used for screening purposes) intended to identify occurrence at the individual level even if there is no reason to suspect infection— i.e., there is no known exposure. This includes, but is not limited to, screening testing of asymptomatic individuals without known exposure with the intent of making decisions based on the test results. Further information on screening testing is available in NJ DOH screening testing guidelines. The US Department of Health and Human Services (HHS) and the CDC have made available a grant program to assist schools with implementing screening testing. Participation in this program is voluntary but strongly encouraged. More information can be found in the memo to schools. Schools interested in participating in this program can obtain additional information by contacting their local health department.

COVID Testing Costs
Diagnostic COVID testing of symptomatic individuals and asymptomatic individuals who were exposed to someone with COVID-19 are generally covered by health insurance. But health insurance and the NJ State Plan will generally not cover mandated regular workplace and school testing.

NJ Free Program for Districts
NJ’s Governor Murphy announced that the NJ DOH will offer a free program for school districts to conduct the required testing, funding by a combination of federal Elementary and Secondary School Emergency Relief (ESSER) funds and state Governor’s Emergency Education Relief (GEER) money. According to the NJEA Q&As, more information will be forthcoming once the DOH provides more detail on this program. The State has promised to continue to work closely with these preK-12 settings to successfully implement the requirements of the Order. Apparently, according to Murphy, NJ school districts will have a choice between using state-contracted vendors to provide testing on-site at schools or using grant money to fund in-house testing programs already in place as long as they are consistent with the DOH guidelines. Murphy said during a recent COVID briefing that he suspects more federal funds may be on the way.

Please contact your Conner Strong & Buckelew account representative toll-free at 1-877-861-3220 with any questions. For a complete list of Legislative Updates issued by Conner Strong & Buckelew, visit our online Resource Center.

On June 10, 2021, the Occupational Safety and Health Administration (OSHA) updated its guidance on mitigating and preventing the spread of COVID-19 in the workplace. The guidance now focuses on protections for unvaccinated and otherwise at-risk employees. OSHA’s update to the guidance reflects the U.S. Centers for Disease Control and Prevention (CDC) guidance for fully vaccinated people. This guidance emphasizes industries noted for prolonged close-contacts like meat processing, manufacturing, seafood, grocery and high-volume retail.

The original guidance issued on Jan. 29, 2021, provided requirements employers should take to implement a workplace COVID-19 prevention program and did not include information about the COVID-19 vaccine.

The guidance also provides an appendix with measures for high-risk workplaces with mixed-vaccination status workers. It provides that employers take additional steps for high-risk situations due to the following factors: close contact, duration of contact, type of contact and other distinctive factors.

Employer Next Steps
Employers should continue to take steps to protect at-risk or unvaccinated workers in their workplace. Employers can do this by implementing multilayered interventions to protect these workers and mitigate the spread of COVID-19.

This Legal Update is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice. © 2021 Zywave, Inc. All rights reserved.

NOTE: THE RESOURCES PROVIDED ON THIS PAGE SHOULD NOT BE INTERPRETED AS LEGAL ADVICE. IF YOU HAVE ANY QUESTIONS, PLEASE CONSULT YOUR LEGAL COUNSEL

During the height of the COVID-19 pandemic, New Jersey changed the standard of compensability under workers compensation statute for “essential employees.” The law created a rebutable presumption that the exposure took place at work, which would trigger the compensability of benefits under workers compensation. This change in the law is only effective while the public health emergency remains in effect.

The Declared State of Emergency in New Jersey is set to expire on July 3, 3021, and, as a result, the burden of proof for establishing compensability for a COVID-19 infection will revert back to the higher standard of establishing “work-related.”

For a state-by-state tracker on COVID-19 Workers’ Compensation legislation enacted in 2021 click here. For a state-by-state tracker on COVID-19 Workers’ Compensation legislation enacted in 2020 click here.

Click here for a printable download.

NOTE: THE RESOURCES PROVIDED ON THIS PAGE SHOULD NOT BE INTERPRETED AS LEGAL ADVICE. IF YOU HAVE ANY QUESTIONS, PLEASE CONSULT YOUR LEGAL COUNSEL

Beginning in April 2020, employers were entitled to payroll tax credits for paid leave required in response to the Coronavirus Disease 2019 (COVID-19) pandemic. The Families First Coronavirus Response Act (FFCRA) required covered employers to provide paid sick and family leave, but this paid leave mandate requirement expired on December 31, 2020. Thereafter, the availability of the leave was continued, but converted to a voluntary leave left to the discretion of the employer. The Consolidated Appropriations Act (CAA), signed into law on December 27, 2020, permitted employers to continue receiving the federal tax credit for voluntarily allowing employees to take unused FFCRA paid sick and family leave through March 31, 2021. The American Rescue Plan Act (ARPA) extended these optional payroll tax credits until September 30, 2021. The IRS has now published a fact sheet and a snapshot document explaining the tax credits.

FFCRA Mandatory Paid Leave
The FFCRA required covered employers to provide paid sick and family leave, but this requirement expired on December 31, 2020. The paid leave mandate in FFCRA was not comprehensive. The legislation expanded access to paid sick and family leave for employees at many small and mid-sized businesses. Employees of large businesses and certain worker groups, however, did not have guaranteed access to paid sick or family leave under FFCRA. Similarly, the tax credits provided in FFCRA were not available to all employers, nor to all employers required to provide leave. State and local government employers, including school districts and public colleges and universities, were required to provide leave but not allowed tax credits to offset FFCRA leave mandate compliance costs.

CAA Voluntary Leave Through March 31, 2021
Employees were eligible for paid sick and family leave after December 31, 2020 only if their employer decided to voluntarily offer it. Under the CAA, the availability of the leave was continued, but converted to a voluntary leave left to the discretion of the employer. The CAA permitted employers to continue receiving the federal tax credit for voluntarily allowing employees to take unused FFCRA paid sick and family leave through March 31, 2021. This legislation did not modify the overall caps on the paid leave amounts for which tax credits could be claimed. Thus, tax credits were limited to a total of 80 hours of paid COVID-19-related sick leave and 10 weeks of paid family leave for certain COVID-related childcare purposes from April 1, 2020, to March 31, 2021.

ARPA Voluntary Leave Through September 30, 2021
The ARPA extended these optional payroll tax credits until September 30, 2021. Under the ARPA, eligible employers may take a tax credit (within set limits) against their share of the Medicare tax to fund the cost of paid employee leave taken for specific COVID-19-related reasons, including to receive and recover from vaccinations. The APRA provides paid leave tax credits for paid leave provided April 1, 2021 through September 30, 2021. The paid leave tax credits in ARPA were similar to those provided in FFCRA and CAA, with a few notable modifications, including the following:

• The 10-day limit on paid sick leave is reset for leave taken after March 31, 2021.
• The per-employee limit on qualified family leave wages is increased to $12,000 (or 60 days for self-employed individuals).
• Paid leave credits are allowed for sick leave taken to obtain a COVID-19 vaccine or illness related to immunization, or for leave taken while waiting for COVID-19 test results.
• State and local governments, as well as 501(c)(1) tax-exempt federal government entities, can claim the credit.
• The payroll tax credit is claimed against the employer’s portion of the Medicare (HI) tax (the Medicare HI trust fund is not affected).
• Anti-discrimination rules require that leave must be provided to all employees.

Claiming the Credit
The IRS has released new resources explaining the tax credits available for employers who opt to provide paid family leave and paid sick leave under the FFCRA and the ARPA through September 30, 2021. The new resources consist of a fact sheet and a snapshot document published on April 21, 2021. In anticipation of claiming the credits on Form 941, Employer’s Quarterly Federal Tax Return, employers can keep all employees’ federal income tax withholdings and the employees’ and employer’s share of Social Security and Medicare taxes—which they otherwise would have deposited—up to the amount of credit for which they are eligible. If this does not cover the amount of the anticipated credits, the employer may request an advance by filing Form 7200, Advance Payment of Employer Credits Due to COVID-19.

Employers are encouraged to contact their leave/employment law and tax advisors for assistance with the FFCRA and ARPA paid leave and tax credit guidance. Please contact your Conner Strong & Buckelew account representative toll-free at 1-877-861-3220 with any questions on health and group benefits related matters For a complete list of Legislative Updates issued by Conner Strong & Buckelew, visit our online Resource Center.

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NOTE: THE RESOURCES PROVIDED ON THIS PAGE SHOULD NOT BE INTERPRETED AS LEGAL ADVICE. IF YOU HAVE ANY QUESTIONS, PLEASE CONSULT YOUR LEGAL COUNSEL

At the onset of a WC policy, employers provide payroll projections to their insurance company to classify their payroll exposure. Payroll projections are a key component in determining Workers’ Compensation premium.

COVID-19 required many employers to have their employees working from home or in a different classification code than originally projected. As a result, if your employees were working from home or performing different roles than initially expected, we recommend you review your current payrolls & classification codes as there may be premium savings.

Below is an example of potential payroll audit considerations:

How to Treat Payroll during COVID-19 for a WC Audit

The most important take away is for insureds to maintain detailed records of class code changes for auditors

• This re-classification can potentially reduce your costs and can either be done at your year-end Workers’ Compensation audit or before the inception of your new policy period.
• The above chart is a guideline to assist you in re-evaluating any potential changes needed to your Workers’ Compensation Class Codes.   Insurance carriers are taking guidance from the Workers’ Compensation Bureaus at audit

If you have any questions, your Conner Strong & Buckelew Account Service Team is available to assist.

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NOTE: THE RESOURCES PROVIDED ON THIS PAGE SHOULD NOT BE INTERPRETED AS LEGAL ADVICE. IF YOU HAVE ANY QUESTIONS, PLEASE CONSULT YOUR LEGAL COUNSEL

On April 7, 2021, the U.S. Department of Labor (DOL) issued FAQs and model notices for the COBRA premium assistance (subsidy) provisions of the American Rescue Plan Act (ARPA). The notices and the FAQs appear on a new DOL COBRA Premium Subsidy webpage dedicated to the ARPA COBRA subsidy. ARPA requires that full COBRA premiums be subsidized for “Assistance Eligible Individuals” for periods of coverage between April 1 and September 30, 2021. See our update for background on these rules.

Subsidy Creates New Notice Requirements
This new COBRA subsidy creates new notice requirements (different from the basic COBRA general notice rule). For example, new notices must now be provided to all individuals who will lose coverage due to any COBRA qualifying event between April 1 and September 30, 2021, and a separate notice must be provided to anyone who may be eligible for the subsidy due to involuntary termination or reduction in hours occurring before April 1, 2021 (i.e., generally involuntary terminations or reductions in hours occurring back to October 2019, where the 18 month period would begin November 1, 2019).

Model Notices
The new model notices released by the DOL are the following:

• Model ARP General Notice and COBRA Continuation Coverage Election Notice: MS Word | PDF: for any qualified beneficiary who loses coverage due to a reduction in hours or involuntary termination of employment with COBRA beginning at some point between April 1 – September 30, 2021 (may be provided as a supplement to a standard COBRA election notice or its terms may be incorporated into a COBRA election notice)
• Model Notice in Connection with Extended Election Period: MS Word | PDF: for all Assistance Eligible Individuals who are still in their 18-month COBRA window in April 2021
• Model Alternative Notice: MS Word | PDF: for plans subject to state continuation coverage
• Model Notice of Expiration of Premium Assistance: MS Word | PDF: to let Assistance Eligible Individuals know that their subsidy will expire and that the individual may be eligible for unsubsidized COBRA, Medicaid or the Health Insurance Marketplace
• Summary of COBRA Premium Assistance Provisions under the American Rescue Plan Act of 2021: MS Word | PDF: includes the forms necessary for establishing eligibility for the subsidy

The guidance package confirms that employers have until May 31, 2021, to provide the extended elections notices and notify “Assistance Eligible Individuals” of the opportunity to elect subsidized coverage. Individuals will then have 60 days following the date that notice is provided to elect subsidized coverage. Individuals can begin subsidized coverage on the date of their election, or April 1, 2021, as long as the involuntary termination or reduction in hours supporting the election right occurred before April 1, 2021. The Model Notices are available, but are not mandated and can be modified as long as the final notices include the required detail. Plans are encouraged to use these new DOL model notices to meet their notice obligations under the COBRA subsidy provisions of the ARPA.

FAQs
The DOL guidance contains 21 FAQs largely directed at individuals and focused on subsidy eligibility and duration and how subsidized coverage fits with other types of health coverage that may be available (such as Marketplace, Medicaid, and individual coverage). The FAQs address that employees must certify on election forms that they are not eligible for other employer coverage or Medicare and will notify the employer if they subsequently become eligible for such coverage. Failure to do so will subject the individual to a tax penalty of $250, or if the failure is fraudulent, the greater of $250 or 110% of the premium subsidy. The availability of other coverage will not, however, impact the employer’s initial obligation to identify potential Assistance Eligible Individuals and provide the required notices and election forms. The FAQs also remind employers that the DOL will ensure ARPA benefits are received by eligible individuals and employers will face an excise tax for failing to comply for each day the employer is in violation of the COBRA rules.

More Guidance Needed
Since ARPA was enacted, employers have been struggling to understand the rules and their application to several open questions. So while the Notices and FAQs do answer important questions on the administration of the subsidies, they do not address many other open issues, such as what is an “involuntary termination”, how does an existing separation agreement with employer subsidized COBRA affect the federal subsidy, or details on how the corresponding payroll tax credit will work. Therefore, we are hopeful that employer directed guidance will be issued shortly to address these open issues.

COBRA Vendors Essential
In the meantime, employers and COBRA administrators now have the notice language to begin administering this new election right and they will want to be sure to timely provide notices to the right group of individuals. Employers should coordinate with their COBRA administrators to ensure compliance related to managing the election changes, notice requirements, and billing. Employers ultimately remain responsible for compliance, so vendors will depend on employers to report affected qualified beneficiaries and those who may be newly eligible for the special election and subsidy.

Conner Strong & Buckelew will continue to monitor further developments on these rules and we will provide ongoing alerts and updates as new information becomes available. Please contact your Conner Strong & Buckelew account representative toll-free at 1-877-861-3220 with any questions. For a complete list of Legislative Updates issued by Conner Strong & Buckelew, visit our online Resource Center.

Click here for a printable download.

NOTE: THE RESOURCES PROVIDED ON THIS PAGE SHOULD NOT BE INTERPRETED AS LEGAL ADVICE. IF YOU HAVE ANY QUESTIONS, PLEASE CONSULT YOUR LEGAL COUNSEL

As published by the International Foundation of Employee Benefit Plans, March 30, 2021

Most employers are encouraging, rather than mandating, employees to get a COVID-19 vaccination. Organizations are taking a variety of actions to encourage vaccination. According to the Littler COVID-19 Vaccine Employer Survey Report, 11% of employers plan to provide cash awards to employees who receive the vaccine, through a company wellness program or otherwise. Thirty-three percent of employers are planning to offer paid time off to employees who get a COVID-19 vaccine once available. Regardless of what they choose, employers want clarity on the rules surrounding vaccination incentives. Last month, over forty business groups and associations sent a letter to the Equal Employment Opportunity Commission (EEOC) seeking guidance on what is and is not allowed when offering incentives to employees who receive the COVID-19 vaccination. The groups wanted EEOC guidance in two areas:

1. A definition of what qualifies as a permissible incentive. Employers want the definition to be as broad as possible to ensure the process is efficient and effective.
2. An explanation that allows COVID-19 vaccine incentives to be distinguished from wellness programs. The groups thought by removing vaccine incentives from wellness program standards, employers would be more likely to participate in this type of plan.

At this time, there has been no guidance issued by the EEOC or any other governmental agency on vaccine incentives. As employers have been left to navigate this on their own, some are choosing to follow wellness program rules, which have become less clear too. The latest proposed rules by the EEOC related to wellness programs under the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act of 2008 (GINA) included guidance on the level of wellness incentives that could be offered. The proposed rules targeted participation-only wellness programs, limiting incentives offered in connection with such programs to a “de minimis” standard. Examples of de minimis incentives generally include items such as a water bottle or a gift card of modest value. However, in light of the Biden administration’s memorandum freezing new and pending regulations, the EEOC withdrew the proposed wellness rules until the new administration has time to review and approve them. For now, we must wait to see whether the EEOC will issue new rules.

Here are some examples of what some employers are offering as COVID-19 vaccine incentives:

Cash Incentive or Gift Card

• Bridgestone: $100 support payment (i.e., missing work, childcare, transportation costs) to make it easier for employees to get vaccinated without requiring vaccination
• Publix: $125 gift card to the store if they get a COVID-19 vaccine
• Kroger: $100 payment for getting full manufacturer-recommended doses of a COVID-19 vaccine. Workers unable to get vaccinated for health or religious reasons can get the payment if they take an educational health and safety course.
• Lidl supermarket chain: $200 to all U.S. employees who get vaccinated
• Instacart: $25 stipend to get vaccinated
• AutoZone: $100 for completing vaccinations

Paid Time Off (PTO) to Get Vaccinated

• New York state-wide mandate for public and private employers: Four hours per vaccine injection unless a longer timeframe has been agreed to pursuant to a collective bargaining agreement
• Wells Fargo: Up to eight hours PTO
• Target: Up to four hours of pay (two hours for each vaccine dose) to hourly employees to get vaccines
• Chobani: Up to six hours of time for employees to get vaccinated—three hours for each of the two COVID-19 vaccine doses
• Bank of America: Option to use two half days, for up to four hours each, for vaccination appointments
• JPMorgan Chase: Up to eight hours of time off to accommodate a COVID-19 vaccine appointment
• Citigroup: Whatever paid time away from work is reasonably necessary to travel to and get the vaccine
• Tyson Foods: Up to four hours of regular pay for employees who wish to be vaccinated off site
• Starbucks: Up to two hours of paid time off to receive each dose of the vaccine, up to two doses
• Krispy Kreme: Up to four hours of paid time off to get vaccinated

Payment Incentive for Getting Vaccinated

• Aldi: Two hours of pay for hourly workers for each dose they receive, totaling up to four hours. Aldi will work with salaried employees who want to receive the vaccine and will cover any costs associated with the administration of the shot.
• Trader Joe’s: Two hours of pay per dose for getting the vaccine
• McDonald’s: Four hours of paid time to corporate employees and workers at its corporate-owned restaurants
• Dollar General: Four hours’ regular pay to front-line, hourly employees
• Marriott International: Equivalent of four hours pay upon completion of the vaccination
• Darden Restaurants (Olive Garden, Long Horn Steakhouse, Cheddar’s Scratch Kitchen, and more): Two hours of pay for each dose of the vaccine—up to four hours of total pay for complete vaccination
• Amtrak: Two hours of pay for each vaccine with proof of vaccine record

Other Incentives for Vaccination

• Best Buy: Four hours PTO for part-time employees, eight hours for full-time employees as a “thank you” for getting vaccinated. The PTO is to use how employees want after vaccination. If employees experience side effects after vaccination, they will receive additional sick time: four hours for part-time employees and eight hours for full-time employees.
• Target: In addition to the PTO incentive above, Target is providing all U.S. employees with free Lyft rides (up to $15 each way) to get to and from their appointments if they need it.
• Amtrak: In addition to the payment incentive above, Amtrak employees who miss work due to vaccine side effects will have their absence excused and pay protected for up to 48 hours after vaccination. Pay will also be protected for employees who are unable to work more than 48 hours after vaccination with medical documentation.

Next Steps for Employers and COVID-19 Vaccine Incentives

Use caution before offering significant financial incentives to encourage worker vaccination due to the lack of clarity in regulatory and agency guidance on what is permissible. Consult with your legal counsel before implementation if considering offering vaccination incentives as part of a wellness program.

NOTE: THE RESOURCES PROVIDED ON THIS PAGE SHOULD NOT BE INTERPRETED AS LEGAL ADVICE. IF YOU HAVE ANY QUESTIONS, PLEASE CONSULT YOUR LEGAL COUNSEL

On March 11, 2020 President Biden signed into law the American Rescue Plan Act of 2021 (ARPA, HR 1319). This mammoth relief and stimulus package includes several provisions that expand certain employee welfare benefit programs to aid certain workers both currently employed and temporarily out of work due to the coronavirus (COVID-19) pandemic. Among other things, the Act provides for an employer to optionally allow a one-year increase to the dependent care flexible spending account (DCFSA) exclusion limit. More significantly the Act provides for a 100% federally financed COBRA subsidy for April 1st through September 2021 for certain employees and family members who lost coverage because of involuntary termination of employment or reduction of hours.

Below are the significant provisions for employers and plan sponsors:

• Expansion of dependent care assistance exclusion. The Act increases the taxable wage exclusion for dependent care benefits from $5,000 to $10,500 for married couples filing jointly. The amount of excludable wages for married couples filing separately is increased from $2,500 to $5,250. This increase applies for 2021 only. Employers who sponsor a DCFSA can voluntarily choose to adopt this provision (it is not required) and increase the available election amount for 2021 under the DCFSA. Employers who want to offer an increased DCFSA election limit for 2021 should work with their FSA administrators to adjust contribution limits and reimbursements, communicate the ability to increase elections to employees as soon as possible, and ensure they amend their DCFSA by the end of the 2021 plan year to allow for this increased amount.
• New COBRA premium subsidy. The Act provides that “Assistance Eligible Individuals” (AEIs) may receive a 100% subsidy for COBRA premiums paid during any period of COBRA coverage during a six-month period beginning April 1, 2021 and ending September 30, 2021 (the subsidy period). These subsidy rules will present administrative challenges to employers and COBRA administrators, and it is expected that many individuals will take advantage of this opportunity to acquire health insurance during the subsidy period at no cost. The pertinent details are below:
  • Who is an AEI? An AEI is any COBRA qualified beneficiary (QB) – employees and their families – who elects COBRA during the subsidy period due to a qualifying event of involuntary termination of employment or reduction in hours. The subsidy is not available for other qualifying events, including for employees who lose coverage due to voluntarily ending employment.
  • Premium Payments and Subsidy Coverage. The QB will pay zero during the subsidy period and the employer/carrier will pay the full premium (100%) or the employer will cover QBs at no cost under a self-insured plan. Employers will then recover the premiums through a payroll tax credit (similar to how employers recovered mandatory Families First Coronavirus Response Act (FFCRA) paid leave costs). The subsidy will cover the full COBRA cost for medical, dental, and vision (but not health FSAs), at any coverage level (e.g., single or family) for employees and former employees, and their spouses or dependents who are QBs following an involuntary termination or reduction in hours. The subsidy also applies to state continuation when due to an involuntary termination or reduction in hours.
  • Subsidy Period and Expiration. The subsidy is available from April 1, 2021 through September 30, 2021, or sooner if the QB’s maximum period of coverage ends before September 30, or if the QB becomes eligible for coverage under another group health plan or Medicare before that date. A QB receiving the subsidy is required to notify the employer/administrator upon becoming eligible for other coverage and employers should notify QBs that they could face a $250 penalty for failure to provide notification (or in the case of intentional failure to notify, the greater of $250 or 110% of the premium assistance provided after loss of eligibility). In no case is an individual eligible for more than the COBRA maximum coverage period measured from the original COBRA event date.
  • Enrollment Period. A QB who is eligible for assistance and who hasn’t elected COBRA coverage by April 1, or who elected COBRA coverage but then discontinued it, may elect COBRA during an enrollment period starting April 1 and ending 60 days after the date on which the COBRA notification was delivered. Apparently those individuals who are eligible for Outbreak Period delays will also be covered by the COBRA subsidy if they meet the eligibility requirements.
    • QBs who become eligible for COBRA due to involuntary termination or a reduction in hours during the subsidy period are eligible for the subsidy.
    • QBs who previously became eligible for COBRA due to involuntary termination or a reduction in hours and are still within their maximum coverage period but who do not have a COBRA election in effect on April 1 (e.g., waived coverage), have a second chance to enroll in COBRA and are eligible for the subsidy.
    • QBs who previously became eligible for COBRA due to involuntary termination or a reduction in hours and elected, but then discontinued, COBRA coverage before April 1, 2021, have a second chance to enroll in COBRA and are eligible if they are still within their maximum period of coverage.
    • Individuals meeting these criteria may make a COBRA election during the period beginning on April 1, 2021, and ending 60 days after they are provided required notification of the extended election period.
    • If such individuals elect COBRA coverage within 60 days of being notified of the subsidy opportunity, coverage would be provided prospectively from the second election date, not retroactively to the original COBRA event date.
    • If there is a lapse in coverage between the original COBRA event and the new special second election, employers cannot force the QB to pay back premiums to take advantage of this second election opportunity.
    • COBRA coverage elected during the extended election period will commence with the first period of coverage beginning on or after April 1, 2021, and may not extend beyond the AEI’s original maximum period of coverage.
  • Optional Different Medical Option Election. The Act creates a “plan enrollment option,” under which a plan may (but is not required to) permit AEIs to enroll in a different—but not more expensive—medical plan option than the one in which they were enrolled when coverage was lost. An AEI would have 90 days after notice of the enrollment option is provided to make the election. The different coverage cannot have a premium that is higher than the premium for the individual’s existing coverage and must also be offered to active employees. Different coverage that offers only excepted benefits is excluded, as are QSEHRAs and health FSAs. Plan sponsors would need to include the availability of the alternative option in the notices they send out.
  • Notice Requirements. Employers will be required to timely notify AEIs who become entitled to elect COBRA during the subsidy period of the subsidy’s availability and the option to enroll in different coverage (if permitted by the plan). This notice obligation can be met by amending existing notices or by providing the required notices in a separate document.
    • Employers must send notice to any individuals who experienced a COBRA event due to an involuntary termination or reduction in hours and who are still within their 18-month maximum COBRA period. This notice informs these individuals of their right for a second chance at electing COBRA coverage. The special notice must be sent to eligible individuals no later than May 31, 2021 (60 days after the date the subsidy goes into effect).
    • Employers must also notify AEIs of their subsidy’s expiration between 45 and 15 days before the expiration date, although this notice will not be required if their subsidy is ending due to the individual’s eligibility for other coverage.
  • Specific notice content requirements apply, and the DOL is required to issue model notices for initial subsidy notifications within 30 days of enactment (or by April 10th) and a model expiration notice within 45 days of enactment. These model COBRA notices should ease the burden on employers of revising current notices.

Employers should coordinate with their COBRA administrators to ensure compliance related to managing the election changes, notice requirements, and billing. Employers ultimately remain responsible for compliance, so vendors will depend on employers to report affected QBs and those who may be newly eligible for the special election and subsidy.

Comment on federal subsidies for Marketplace plans. Through 2022, the Act expands access to federal Marketplace subsidies by eliminating the ACA subsidy cutoff if a purchaser earns more than 400% of the federal poverty level (FPL), about $51,520. Instead, for those earning more than 400% of the FPL, these subsidies will gradually decrease as income rises, limiting the cost of ACA plan premium contributions for silver (midlevel) health plans to no more than 8.5% of an individual or family’s income. Until its expiration in September, the 100% COBRA subsidy is likely to keep terminated employees enrolled in their employer-sponsored plan, But beginning in October, those who have not exhausted their 18 months of COBRA coverage (or 29 months for people with disabilities) may want to compare the cost of maintaining COBRA with the cost of purchasing an ACA Marketplace plan with enhanced subsidies. Note that in general, active employees who are offered insurance through work are not eligible for ACA premium subsidies if their employer-sponsored coverage is considered affordable and meets the ACA’s minimum-value requirement.

Summary. Employers should coordinate immediately with their COBRA and FSA vendors to ensure compliance with these new rules. On the COBRA subsidies, employers need to implement the rules on very short notice as subsidies are to be available beginning April 1, 2021. Employers should prepare now to gather the names of QBs who lost coverage due to involuntary termination or reduction in hours (as far back as November 2019) so they can be sure that anybody who is eligible for COBRA during the subsidy period gets a notice and ability to elect COBRA. Employers should also plan to send out notices and inform individuals about the subsidy, and they will have to send out a notice when the subsidy terminates.

Next Steps. Conner Strong & Buckelew is actively developing tools, resources and service solutions to assist plan sponsors in meeting these requirements. To keep you up to date on the new rules, Conner Strong hosts educational webinars for employers. You are invited to join us on March 22 from 2pm – 3pm for our next webinar “American Rescue Act and What Employers and Plan Sponsors Need to Know”. Click here to register.

Contact your Conner Strong & Buckelew account representative toll free at 1-877-861-3220 for more information.

The U.S. Equal Employment Opportunity Commission (EEOC) has announced that it is withdrawing its January 2021 proposed rules regarding the incentives employers can provide their employees as part of a wellness program without violating the Americans with Disabilities Act (ADA) or Genetic Information Nondiscrimination Act (GINA). Below is key information on this important decision.

Proposed Wellness Rules Withdrawn

As we reported in our January 2021 update, the January 2021 proposed rules had stated that for certain programs employers could offer only “de minimis” incentives for employees participating in a wellness program. The proposed rule generally required most incentives to have no more than de minimis value (e.g., a water bottle or small gift card). With the withdrawal of the January 2021 proposed rules, employers offering wellness programs with disability-related inquiries and/or medical exams should continue complying with the ADA and GINA wellness incentive rules that have been in place since 2018. See our December 2018 update for an overview of those rules.

Vaccine Incentives

Wellness programs, particularly those programs that offer incentives for participation, may be subject to nondiscrimination rules. Concerns about these rules led the EEOC to release the January 2021 proposed nondiscrimination regulations. With the removal of the rules, there continues to be uncertainty with regard to the ability of employers to offer incentives in wellness programs subject to the ADA and GINA. At least for now, although certain nondiscrimination requirements still apply to certain wellness programs, employers should also carefully consider the existing EEOC guidance under the ADA generally when determining the level of incentives they use with their wellness programs that collect medical information. There are existing EEOC considerations for employers that may differ depending on whether the employer will be encouraging employees to seek vaccinations or if they will be involved in the vaccine administration.

The EEOC released updated guidance on the responsibilities and rights of employers and employees related to the COVID-19 vaccine, including in cases where employers require employees to be vaccinated. The publication, “What You Should Know About COVID-19 and the ADA, the Rehabilitation Act, and Other EEO Laws”, includes a section providing information to employers and employees about how a COVID-19 vaccination interacts with other federal guidelines and laws related to anti-discrimination.

• An incentive tied to vaccination without employer involvement (encouraging employees to get vaccinated) should not implicate the ADA limits on incentives because any pre-vaccination medical questions would not tie back to the employer. According to the EEOC’s guidance (see Section K), requiring proof of vaccination is also not a medical inquiry under the ADA, so an employer would be free to ask for proof of vaccination in order to provide the incentive.
• For an employer involved with the vaccine administration, it is likely ADA restrictions would apply, even if the employer has contracted with a third-party to administer the vaccine. So in this case the incentive likely must be limited in order for it to be considered a “voluntary” program under the ADA. According to the EEOC’s guidance (see Section K), the administration of a vaccine alone does not constitute a medical examination, but the questions an employee must answer before receiving the vaccine will almost certainly qualify as a disability-related inquiry under the ADA.

Employers should watch for any developments related to the EEOC’s wellness rules and review their vaccine programs with labor counsel as these programs could open them up to discrimination claims.

Conner Strong & Buckelew continues to monitor developments and will provide additional information as it becomes available. Please contact your Conner Strong & Buckelew account representative toll free at 1-877-861-3220 with any questions. For a complete list of Legislative Updates issued by Conner Strong & Buckelew, visit our online Resource Center.

Last year, federal agencies announced timing extensions for a host of deadlines for plans and participants that apply during the COVID-19 “Outbreak Period”. The defined Outbreak Period was intended to help plans, participants and service providers by extending deadlines affecting COBRA coverage, HIPAA special enrollment periods, claims and appeals for benefits, and for certain notices and disclosures required under the Employee Retirement Income Security Act (ERISA). See our May 2020 update for a detailed summary of the 2020 Outbreak Period guidance.

Under the 2020 Outbreak Period guidance, the special “Outbreak Period” began on March 1, 2020, and was intended to last until 60 days after the announced end of the “National Emergency”. By law the extended period was not to exceed one year, which means unless additional guidance was issued, the Outbreak Period deadline was set to expire on February 28, 2021. But as it became clear that the National Emergency would continue for a substantial period of time (note that President Biden just extended it), questions arose as to how the agencies would interpret the one-year outer limit.

New Guidance
The federal agencies have now issued new guidance (Notice 2021-01) on the extension of the Outbreak Period. Unfortunately, this guidance will significantly increase burdens and complexity for plan sponsors and cause further confusion for participants. The new guidance indicates that individuals and plans with timeframes subject to the relief will have the applicable periods disregarded until the earlier of one year from the date they were first eligible for relief, or 60 days after the announced end of the National Emergency (the end of the Outbreak Period). This means the Outbreak Period remains ongoing, and instead of applying the one year period to the March 1, 2020 start date of the Outbreak Period for everyone, it applies it on an individual-by-individual basis resulting in an individual “tolling” concept.

Examples
The new guidance requires plan sponsors to determine the duration of the relief on a person-by-person basis. The following are examples of how the guidance would apply to different circumstances.

COBRA

• COBRA election period started 2/1/20 (before the 3/1/20 start of the Outbreak Period). The normal 60 day timeline had already begun to run, but then is tolled starting 3/1/20. The one-year suspension period would end 2/28/21, so the election period would start again as of 3/1/21, and the qualified beneficiary would have the balance of the 60-day election period.
• COBRA election period started 3/1/20. The election deadline is tolled starting 3/1/20. The one-year tolling period would end 2/28/21, so the 60-day election period would start 3/1/21.
• COBRA election period started 6/1/20. The election deadline is tolled as of 6/1/20. The one-year tolling period would end 5/31/21, so the 60-day election period would start 6/1/21.
• COBRA election period started 11/1/20. The election deadline is tolled as of 11/1/20. The one-year tolling period would end 10/31/21 (as long as National Emergency continues), so the 60-day election period would start 11/1/21.
• COBRA election period starts 4/1/21. The election deadline is tolled as of 4/1/21. The one-year tolling period would end 3/31/22 (as long as National Emergency continues), so the 60-day election period would start 4/1/22.
• COBRA qualified beneficiary enrolls in COBRA coverage and makes several payments but fails to make the COBRA payment for November 2020 coverage by the normal grace period of 11/30/20. The payment deadline is tolled as of 11/30/20. The one-year tolling period would end 11/30/21 (as long as National Emergency continues), so the payment deadline would be 11/30/21.

HIPAA Special Enrollment

• Employee has a baby on 11/1/20. The election deadline is tolled as of 11/1/20. The normal 30 day timeline to notify the employer is by 12/1/20. The one-year tolling period would end 10/31/21 (as long as National Emergency continues), so the 30-day election period (for coverage retroactive to the date of birth) would start 11/1/21.
• Employee gets married on 4/1/21. The election deadline is tolled as of 4/1/21. The normal 30 day timeline to notify the employer is by 5/1/21. The one-year tolling period would end 3/31/22 (as long as National Emergency continues), so the 30-day election period (for prospective coverage after the date of the election) would start 4/1/22.

Claim Filing Deadlines

• Health FSA plan normal claim filing deadline requires that participants submit all claims incurred during the 2020 calendar year plan year within 3 months after the end of the plan year (or by 3/31/21). The claim filing deadline is tolled as of 12/31/20. The one-year tolling period would end 12/31/21 (as long as National Emergency continues), so the 3 month claim filing period would end 3/31/22.

Next Steps
Employers and plan sponsors will need to ensure their COBRA vendors and third party administrators have adopted the necessary measures to comply with and administer the new changes. It is essential to be in immediate contact with vendors in this area to ensure their readiness and adherence to the changes and the new deadlines. Also, employers will need to consider how, if and when to communicate revised deadlines for elections, payments, and losses of coverage. The guidance seems to suggest that plans may need to notify each individual when his or her one-year extension is about to be up and plans may need to update prior communications that did not anticipate this new guidance.

• Consider whether new notices should be issued with updated coverage and rate options, and current election and payment deadlines for individuals who have deferred making a COBRA election for any periods on or after March 1, 2020.
• Consider providing notice regarding payment for all prior month premiums that may be owing for those who are already enrolled in COBRA but who have been deferring payment for coverage.
• Consider communications to let participants know of other coverage options and the recently announced COVID-19 special enrollment period via healthcare.gov (which may offer a less expensive option for many and does not require retroactive enrollment to the date coverage was lost as required under COBRA.)

While the new guidance finally provides some answers, the individual-by-individual nature of the relief and the fact that it appears the Outbreak Period could last for a significant period of time imposes increased burdens and administrative complexity on plan sponsors. This will cause confusion for individuals and the entire matter raises a number of questions as to how the new guidance will interact with any COBRA subsidies (if they become law).

Please contact your Conner Strong & Buckelew account representative toll-free at 1-877-861-3220 with any questions. For a complete list of Legislative Updates issued by Conner Strong & Buckelew, visit our online Resource Center.

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