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It has been previously discussed that President Biden announced an end to the COVID-19 Public Health Emergency (PHE) and National Emergency (NE) periods on May 11, 2023, and the practical ramifications for employer group health plan sponsors as they administer COBRA, special enrollment, and other related deadlines tied to the end of the NE. As discussed, this action generally meant that all applicable deadlines were tolled until the end of the NE plus 60 days, or July 10, 2023, with all regular (non-extended) deadlines taking effect for applicable events occurring after that.
A Change in the National Emergency End Date
A new wrinkle recently added a potential complication to calculating these deadlines. President Biden signed H.R. Res. 7 into law on April 10, 2023, after Congress jointly introduced H.R. Res. 7 as a one-line action to end the NE, effective immediately. The consequence is that the applicable end of the transition relief is now June 9, 2023 (60 days following April 10, 2023) instead of July 10, 2023, as previously anticipated. The Department of Labor (DOL), however, has informally announced that despite the statutory end of the NE being 30 days earlier than expected, to avoid potential confusion and changes to administrative processes already in progress, the deadline of July 10, 2023, will remain the relevant date for COBRA, special enrollment, and other related deadlines under previous guidance. Prophetically, updated FAQs, released March 29, 2023, by the DOL, Department of Treasury, and Department of Health and Human Services (the Agencies), provide, “the relief generally continues until 60 days after the announced end of the COVID-19 National Emergency or another date announced by DOL, the Treasury Department, and the IRS (the “Outbreak Period”). [emphasis added]” Further clarification and formal guidance are still expected.
Updated DOL FAQ Guidance
Most employers rely on third-party vendors and consultants to help administer COBRA, special enrollments, claims, appeals, etc. All should be aware of the impact the end of the NE and PHE has on all applicable deadlines. The FAQs provide at Q/A-5 specific examples to help employers, consultants, and administrators apply the end of NE and PHE deadlines and different scenarios related to COBRA elections and payments before and after the end of the Outbreak Period, special enrollment events, Medicaid election changes, etc. The FAQs also make clear that employers are encouraged to consider extending these deadlines for the current plan year. Employers should discuss the impact of this guidance with their vendors and consultants to ensure all parties comply with the upcoming transitional periods.
The FAQs also confirm (at Q/A 1-4) the impact of the end of the PHE on COVID-19-related testing and diagnostic procedures, noting that as of the end of the PHE on May 11, 2023, group health plans are no longer required to provide certain COVID-19 related coverage at 100 percent under the plan, but can revert to previous cost-sharing and deductible limitations that existed before the COVID-19 pandemic. Note that President Biden’s recent action approving the end of the NE on April 10, 2023, has no impact on the previously communicated end to the PHE on May 11, 2023. Employers should review changes in coverage of COVID-19 testing and other related treatment or procedures with their insurance carriers, consultants, and advisors, including any notices that may be required in connection with those changes. The DOL confirmed that while encouraged to do so, employers do not have to provide any separate notification of any changes in current coverage limits before the PHE end date unless the employer had previously disclosed a different level of coverage in its current Summary of Benefits and Coverage (SBC) provided during the most recent open enrollment period.
COVID-19 Testing and Treatment Under High Deductible Health Plan/Health Savings Accounts
Q/A-8 of the FAQs provides interim clarification regarding the impact of the end of the PHE on high-deductible health plans (HDHPs) that are tied to health savings accounts (HSAs) and the ability to provide medical coverage for COVID-19 testing or treatment without requiring an employee to satisfy applicable HDHP deductibles for HSA contribution purposes. Even though IRS Notice 2020-15 provided relief from general deductible limitations under Code Section 223(c)(1) through the end of the PHE, the Agencies have determined this relief will remain in effect after the end of the PHE and until the IRS issues further guidance.
Days before his inauguration, President-elect Joe Biden outlined an agenda for COVID-19 relief and economic recovery that includes federal aid for health care expenses, such as providing subsidized COBRA coverage.
The relief and stimulus proposals in Biden’s $1.9 trillion American Rescue Plan package range from asking Congress for additional $1,400 checks for low- and middle-income wage earners to reimbursing employers with 500 or fewer employees for providing paid leave. Other provisions focus on helping consumers with health care expenses.
According to a Jan. 14 fact sheet from the Biden-Harris transition team, the new administration will immediately ask Congress to:
“Roughly two to three million people lost employer-sponsored health insurance between March and September, and even families who have maintained coverage may struggle to pay premiums and afford care,” according to the transition team’s fact sheet. “Together, these policies would reduce premiums for more than 10 million people and reduce the ranks of the uninsured by millions more.”
Employers may require terminated workers who choose to continue coverage under the employer-sponsored health plan for up to 18 months to pay for COBRA coverage, with premiums limited to the full cost of the coverage plus a 2 percent administration charge. That cost, however, is not affordable for many newly unemployed workers.
During the pandemic, some employers are choosing to pay for the COBRA coverage of former employees who were laid off, or to do so for current employees who lost group health plan coverage when they were furloughed or had their hours reduced.
Last April, the Department of Labor and the IRS issued regulations extending the deadlines for COBRA notices, elections and premium payments from March 1, 2020, until 60 days after the end of the ongoing COVID-19 national emergency. “While the usual statutory penalties for COBRA violations should not apply [for now], failing to notify COBRA-qualified beneficiaries of their rights may increase the likelihood of a breach of fiduciary duty claim,” Emily Meyer, an attorney with Cohen & Buckman in New York City, wrote in November.
Among other health care-related agenda items, the new administration will ask Congress to:
The fate of the health care provisions is uncertain at this time. Congressional Democrats welcomed Biden’s proposals. Rep. Steven Horsford, D-Nev., for instance, issued a statement saying he was “glad to see that the plan provides critical subsidies [for COBRA and ACA plans] to help American families access health care during this critical time.”
Republicans have criticized the extent of the new proposals, estimated to cost an addition $1.9 trillion over existing relief. Efforts by Congress “should be strategic, focusing on families and small businesses in need,” said Sen. Rick Scott, R-Fla.
Federal coronavirus-related paid-leave benefits are set to expire at the end of the year, and if those benefits aren’t extended, some workers may be left without coverage as the pandemic persists through the winter months.
The Families First Coronavirus Response Act (FFCRA), which took effect in April 2020, is a temporary measure that provides COVID-19-related paid-sick-leave and paid-family-leave benefits to certain eligible workers.
Will FFCRA’s emergency benefits be renewed as the coronavirus crisis continues? Will President-elect Joe Biden make expanding paid leave a priority? Here’s what employment attorneys had to say.
Coronavirus cases in the U.S. recently hit record highs with more than 150,000 new cases reported each day since Nov. 16, according to the U.S. Centers for Disease Control and Prevention. FFCRA benefits will end on Dec. 31 unless Congress renews them.
For now, many employers are required to provide up to 80 hours of paid-sick-leave benefits if employees need leave to care for their own or someone else’s coronavirus-related issues. The legislation also updated the Family and Medical Leave Act (FMLA) to provide workers with job-protected, paid leave when they can’t work—either onsite or remotely—because their son’s or daughter’s school or child care service is closed due to the public health emergency.
FFCRA’s emergency paid-leave provisions apply to certain public employers and businesses with fewer than 500 employees, and there are exceptions available for small businesses and companies that employ health care workers.
Will FFCRA leave be extended? With the upcoming change in the presidential administration, employment attorneys are divided in their predictions.
“It will be renewed,” predicted Philip Voluck, an attorney with Kaufman Dolowich & Voluck in Blue Bell, Pa. He said it may be renewed by the Trump administration, noting the Biden administration does not assume office until Jan. 20, 2021. Voluck said new legislation may expand the FFCRA’s reach and clarify employer’s paid-leave obligations.
Employers covered by FFCRA earn refundable tax credits that reimburse them for the cost of providing paid leave related to COVID-19. “These need to be carried over to any new legislation to ease the financial strain on covered employers,” he noted.
Senate Majority Leader Mitch McConnell, R-Ky., said he wants Congress to finalize a new coronavirus economic stimulus bill before the end of the year, but that might be difficult during a lame-duck session, according to Politico.
Sara Jodka, an attorney with Dickinson Wright in Columbus, Ohio, believes that there will be a FFCRA extension or supplemental legislation but not until Biden takes office. Biden’s current COVID-19-related leave plans would expand FFCRA to provide for 100 percent wage coverage up to $1,400 a week, provide for paid leave during a mandatory quarantine or isolation period, and expand coverage to domestic workers, caregivers, gig-economy workers and other independent contractors. Employers would also continue to receive tax deductions and reimbursement for COVID-19-related paid leave.
Charles Thompson, an attorney with Ogletree Deakins in San Francisco, noted that the Biden administration may focus on other coronavirus priorities, such as putting money directly in people’s pockets.
In addition to the FFCRA’s paid-leave provisions, there is the longer-term consideration of whether a lasting nationwide paid-leave law may garner bipartisan support.
In the 116th Congress, Democrats and Republicans put forward several proposals to provide paid leave to new parents. In December 2019, Congress passed paid parental leave for qualifying federal employees. Senate Minority Leader Chuck Schumer, D-N.Y., has said he “will not stop fighting until this benefit is provided to all workers nationwide.”
Biden supports the Family and Medical Insurance Leave Act, which is known as the FAMILY Act. The proposed legislation would provide workers with paid time off to care for a newborn or recently adopted child, take care of themselves or family members with serious health conditions, or care for military family members and help them prepare for deployments.
Jodka noted, however, that the Biden-Harris campaign platform focused on expanding other employee rights, such as making it easier for workers to organize and collectively bargain, increasing the federal minimum wage, and extending overtime pay to more workers.
She thinks any paid-leave law will likely stem from an amendment to the FMLA, like the FFCRA did. “Employers, especially smaller ones, struggled—and continue to struggle—to meet the paid-leave requirements of the FFCRA,” she said, “so it is likely that first attention will be to the COVID-19 response with a discussion of a federal paid-leave law well off into the future.”
Some states and cities already provide paid leave, and their laws operate independently of federal law, Voluck explained. “States will likely become even more generous with paid leave,” he predicted.
SHRM has long advocated for a voluntary federal framework for paid leave, rather than a fragmented patchwork of state and local leave laws, and recently outlined employers’ need for consistency and simplicity in a letter to the U.S. Department of Labor’s Women’s Bureau.
Thompson thinks that states and local jurisdictions “will continue to be at the forefront of requiring that employers provide COVID-related leave.”
Many jurisdictions—including Arizona, California, Colorado, Michigan, New Jersey, New York, Rhode Island, Washington and Washington, D.C.—have enacted their own emergency paid-leave laws in response to the pandemic. Many cities in California and elsewhere have also passed supplemental leave ordinances. Employers should note that state and local COVID-19-related paid-leave laws may have different expiration dates.
“I think state laws will continue to trend upward in favor of paid-leave law mandates,” Jodka said. “The most typical is a paid-sick-leave mandate, and with COVID-19 cases rising, the need to value proper medical care and time away from work without risking losing a paycheck is at an all-time high.”