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“Doesn’t that violate HIPAA?”  This is a question we hear regularly from employers, businesses and individuals who are concerned that asking someone for their COVID-19 vaccination status could raise issues under the Health Insurance Portability and Accountability Act (“HIPAA”) Privacy Rule.  The answer is no – it is not a problem to ask and it is not a problem to require disclosure of COVID-19 vaccinated status.  This is fairly clear on the face of the regulations themselves.  While vaccination information is classified as health information that is generally covered by the HIPAA Privacy Rule, HIPAA generally only provides protections with respect to disclosures by covered entities (such as health care providers and health plans) and their business associates.  HIPAA therefore does not apply to most employers, and does not apply when an individual employee discloses to their employer information about the employee’s own health status, including COVID-19 vaccination status.

The Department of Health and Human Services (“HHS”) has recently provided further reassurance regarding the inapplicability of HIPAA with respect to certain information about vaccination status in the form of lengthy FAQs posted to their website on September 30, 2021.Continue Reading Can Employers Ask for Proof of COVID-19 Vaccination Status Under HIPAA?

On May 18, 2021, the IRS furnished much-needed guidance to employers on how to implement the COBRA premium subsidy provisions under the American Rescue Plan Act (ARPA). Notice 2021-31 includes more than seven dozen Q&As, which cover topics including eligibility requirements, applicable coverage periods and limitations, and notice and election procedures.

As summarized in our prior post, ARPA includes a 100% COBRA premium subsidy for “assistance eligible individuals” who elect (or who previously elected) COBRA continuation coverage for the period from April 1, 2021 through September 30, 2021. “Assistance eligible individuals” are generally those whose terminations occur as a result of an involuntary termination of employment (other than due to gross misconduct, for which COBRA is not available) or due to a reduction of hours.

ARPA provides that, by May 31, 2021, employers are required to distribute a notice regarding the COBRA premium subsidies to “assistance eligible individuals.” Given the May 31 deadline, employers were anxiously awaiting guidance from the IRS on many of the aspects of the COBRA premium subsidies. Pending issuance of guidance by the IRS under ARPA, many looked to the guidance that was issued to implement the 2009 American Recovery and Reinvestment Act (ARRA) COBRA subsidy for some indication of how the IRS might interpret ARPA’s provisions. Fortunately, much of the ARPA guidance—particularly relating to what constitutes an involuntary termination of employment—is consistent with that prior ARRA guidance.Continue Reading IRS Issues Much Needed COBRA Guidance

This is the second of two installments on the American Rescue Plan Act of 2021 (ARPA). Mayer Brown’s first installment describes provisions of ARPA relating to COBRA premium subsidies, changes to the cap on pre-tax dependent care assistance benefits, changes to section 162(m) of the Internal Revenue Code relating to a corporation’s deduction for executive compensation, and updates to the employee retention credit (initially implemented as a part of the Coronavirus Aid, Relief, and Economic Security Act, also known as the CARES Act).

This installment focuses on the provisions of ARPA that provide relief to multiemployer and single employer defined benefit plans.Continue Reading Multiemployer and Single Employer Plan Provisions of the American Rescue Plan Act: Help is on the way!

On March 11, 2021, President Biden signed into law the American Rescue Plan Act of 2021 (ARPA) which contains a variety of employee benefit provisions. ARPA contains both mandatory and discretionary provisions relating to benefits. The following summarizes the provisions of ARPA relating to COBRA premium subsidies (mandatory changes), changes to the cap on pre-tax dependent care assistance benefits (discretionary), changes to section 162(m) of the Internal Revenue Code relating to a corporation’s deduction for executive compensation in excess of certain limitations (mandatory but not effective until 2026), and updates to the employee retention credit (initially implemented as a part of the Coronavirus Aid, Relief, and Economic Security Act, also known as the CARES Act).Continue Reading ARPA to the Rescue: COBRA Subsidies, DCAP Relief and More!

Last year, the Department of Labor (working in concert with other agencies) issued two notices extending a variety of benefit plan deadlines as a result of the COVID-19 national emergency, as discussed in detail in our May 2020 blog. The relief generally provided that, in determining deadlines, the period from March 1, 2020 until 60 days after the end of the COVID-19 national emergency or such other date announced by the agencies (also known as the “Outbreak Period”) would be disregarded. However—and notably—the Outbreak Period was generally subject to the one-year duration limitation set forth in Section 518 of ERISA.

If the “one-year duration limitation” had in all cases begun on March 1, 2020, that one year would have already come and gone, even while the COVID-19 national emergency continues.  But the DOL has now, by way of EBSA Disaster Relief Notice 2021-01, issued further guidance that provides for an individualized application of the one-year duration limitation.Continue Reading After One Year, the Outbreak Period is Ongoing – What’s a Plan Sponsor to Do?

After several delays, the Consolidated Appropriations Act, 2021 (the “Act”) was signed into law on December 27, 2020.  Although the Act primarily addresses coronavirus emergency response and relief and appropriations through September 30, 2021, it also contains several provisions of interest for employers that sponsor benefit plans, including temporary flexibility for health care and dependent care flexible spending accounts (FSAs), changes to retirement plan provisions, and certain health care plan changes related to so-called “surprise billing”.  The following summarizes the provisions of the Act that affect health care and dependent care FSAs.
Continue Reading New Year, Old FSA Money?

On August 8, 2020, President Trump signed a Memorandum on Deferring Payroll Tax Obligations in Light of Ongoing COVID-19 Disaster for the Secretary of the Treasury (the “Payroll Tax Memo”). The Payroll Tax Memo notes that President Trump previously declared the COVID-19 pandemic an emergency and that further action is needed to support working Americans during the pandemic. The Payroll Tax Memo directs the Secretary of the Treasury to use his authority (under Section 7508A of the Internal Revenue Code) to defer withholding, deposit, and payment of certain Federal Insurance Contribution Act or “FICA” taxes owed by certain employees for wages paid between September 1, 2020 and December 31, 2020 (the “Deferral Period”), subject to the following conditions:

  • The deferral is only permitted for employees whose bi-weekly pre-tax compensation is less than $4,000 (or the equivalent amount with respect to other regular pay periods); and
  • Amounts deferred shall be deferred without any penalties, interest, additional amount or addition to the tax.

Continue Reading President Trump Signs Memorandum on Deferring Payroll Tax Obligations

On May 21, 2020, the US Department of Labor (DOL) and the Employee Benefits Security Administration (EBSA) issued final regulations expanding the use of electronic disclosures for retirement plans. The regulations provide a new safe harbor that will substantially ease the use of electronic delivery by retirement plan administrators to satisfy the disclosure requirements of Title I of the Employee Retirement Income Security Act of 1974 (ERISA). The new regulations were published in the Federal Register on May 27, 2020, and they take effect on July 27, 2020 (though the DOL will not take enforcement action against a plan administrator that relies on the regulations’ new safe harbor before that date).
Continue Reading The DOL Embraces Wider Use of Electronic Notices for ERISA Disclosures

The IRS and the Treasury Department, acknowledging the widespread impact of COVID-19, have issued Notice 2020-29 and Notice 2020-33, granting much-sought flexibility for flexible spending accounts (“FSAs”) and health plans.  Though the Section 125 cafeteria plan rules applicable to FSAs and health plans already permitted some limited election changes in the case of changes in status (for example, in the event of significant cost or coverage changes), they did not address the wide array of changes that many participants have wanted to make based on the ripple effects of the COVID-19 crisis.  In addition, the existing Section 125 rules required that any change to the election be consistent with (as determined under the rules) and on account of the applicable change in status.
Continue Reading Flexibility for Flexible Spending Accounts in Light of COVID-19

During the economic downturn associated with the COVID-19 pandemic, some 401(k) plan sponsors may be considering a mid-year reduction or suspension of matching contributions or nonelective contributions to their 401(k) plans as a cost-saving measure. Generally, whether the matching or nonelective contributions may be reduced or suspended will depend on the specific terms of the plan. In addition, in the case of  a plan that is intended to be a safe harbor plan under sections 401(k) or 401(m) of the Internal Revenue Code of 1986 as amended (the “Code”), the Code imposes particularly restrictive rules limiting mid-year changes. The following summarizes steps that a plan sponsor must take to reduce or suspend matching or nonelective contributions to its safe harbor plan during the plan year without jeopardizing the plan’s tax-qualified status.
Continue Reading Reducing or Suspending Matching or Nonelective Contributions Under a Safe Harbor Plan