Benefits News Highlights
July 24, 2020
- The IRS reported in Notice 2020 – 23 that ERISA Plans with 5500 Filing due dates or extended due dates falling on or after April 1, 2020, and before July 15, 2020 now have until July 15, 2020, to file their information reports.
- Because the due date for filing Federal income tax returns is now July 15, 2020, individuals may make contributions to their HSA (Health Savings Accounts) for 2019 at any time up to July 15, 2020. (See Question and Answer #27.)
- Click here for a SHRM article which provides details about several state insurance commissioners ordering “insurance companies to let employers continue covering employees under group policies, even if employees would normally lose eligibility due to layoffs or reduced hours.
- Last year, the Supreme Court agreed to hear Maine Community Health Options v. United States, a case to decide whether health insurance companies that offered plans on the exchange are entitled to compensation for losses they suffered as a result of the federal government’s declining to make “risk-corridor payments,” as was originally intended when the ACA was enacted. On April 27, 2020, the Court decided in favor of the insurers, concluding that by “establishing the temporary Risk Corridors program, Congress created a rare money-mandating obligation requiring the Federal Government to make payments…” Further, the Court found that Congress “neither repealed nor discharged” this obligation, and therefore “petitioners may seek to collect payment through a damages action in the Court of Federal Claims.”
- Groom Law Firm reports on recent ERISA litigation activity regarding violations of COBRA’s election notice requirements. The lawsuits allege deficiencies, even in notices based on the Department of Labor’s (DOL’s) Model Election Notice, that caused former employees to not elect COBRA when they could have.
- On June 2nd, the American Benefits Council released a list of its legislative and regulatory priorities related to stabilizing employee benefits for employers to help make re-opening easier during the Covid-19 pandemic. Among other things, the proposal included recommendations for the federal government to subsidize COBRA premiums; increase affordability of individual market insurance; implement risk adjustment and risk corridors to stabilize premiums; and encourage the use of on-site clinics and telehealth programs.
- On June 10th, the Treasury Inspector General for Tax Administration (TIGTA) released a report finding that IRS collection of employer shared responsibility payments under Section 4980H fell far short of original projections. Originally, the IRS expected to collect $17 billion in penalties for 2015–2016 and $167 billion between 2016 and 2026. However, only $749 million was collected for 2015–2016, and now the projection through 2026 is just $8 billion.
- On June 19th, the DOL’s Employee Benefits Security Administration (EBSA) issued proposed updates for 2020, including additional guidance and examples, to the existing mental health parity self-compliance tool. The tool is designed to help plans and issuers gauge compliance with mental health and substance use disorder coverage requirements. Public comments on the proposed 2020 version are due by July 24, 2020.
- The 2017 Tax Cut and Jobs Act amended section 274 of the Internal Revenue Code effective for taxable years beginning after December 31, 2017, to eliminate the employer deduction for expenses related to qualified transportation and commuting fringe benefits. Our original compliance alert on these changes can be viewed here. On June 20th, the IRS and the Treasury Department released proposed regulations that clarify the requirements and provide simplified methods for calculating the cost of such disallowed benefits.
- On June 23rd, the IRS, the Treasury Department, and the DOL released a joint FAQ. It addressed some common questions related to coverage for COVID-19 testing and diagnosis, along with other issues related to provision of these services and compliance with the ACA.
- Also on June 23rd, the Commonwealth Fund released survey findings highlighting the effects of the COVID-19 pandemic on health insurance coverage, including implications for employer-sponsored insurance.