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Legal Alert: How Does FMLA and EFMLEA Apply to Leaves?

Posted on March 31st, 2020

This alert was revised on April 10, 2020. 

The Department of Labor (DOL) has released several updates to their Families First Coronavirus Response Act Questions and Answers. Clarification was provided on how FMLA and EFMLEA apply to leaves and the 12-month period. A link to the Q&A is provided here and below.  While these issues are addressed throughout, this topic is specifically addressed starting with question #44.

Do I qualify for leave for a COVID-19 related reason even if I have already used some or all of my leave under the Family and Medical Leave Act (FMLA)?

If an employer was covered by FMLA prior to April 1, 2020, the amount of Emergency Family and Medical Leave Expansion Act (EFMLEA) available is 12 weeks total in a 12-month period. If you have already taken 12 weeks of FMLA in the 12-month period, you are not eligible for additional time under EFMLEA.

It is important to note that the Emergency Family and Medical Leave Expansion Act only applies when you are on leave to care for a child whose school or daycare is closed due to COVID-19 related reasons. This would fall to the EFMLEA and not under paid sick leave.

If you have already taken a portion of the 12 weeks that are available under FMLA, you may take the additional EFMLEA up to a maximum of 12 weeks in a 12-month period.

For example, if your employer is covered under the FMLA on April 1,2020, and you were eligible for a preexisting FMLA and you took two weeks of leave in January 2020 you would have 10 weeks available FMLA leave remaining. EFMLEA is a type of FMLA leave so you would have 10 weeks of EFMLA and not 12-weeks.

If you are entitled to paid sick leave under the Emergency Paid Sick Leave Act, you are entitled to it regardless of how much leave you have taken under FMLA, as paid sick leave is not a form of FMLA and does not count toward the 12 weeks in the 12 month period. If you take paid sick leave concurrently with the first two weeks of EFMLEA, which may be otherwise unpaid, then those two weeks do count toward the 12 weeks in the 12-month period.

Overlapping Leave Laws and Employer Paid Time Off

The Families First Coronavirus Response Act (FFCRA) prohibits employers from requiring an employee to exhaust accrued paid time off such as sick or vacation time or state/local paid sick leave. Employees are entitled to utilize federal emergency paid sick leave before using state or local paid sick leave or accrued employer offered PTO.

You should review any state-specific leaves that may have been implemented in response to COVID-19. The DOLs Q&A document can be found on their website and here.

New Certification/Paperwork Requirements

Traditional FMLA certification requirements remain in effect.

As noted above, the new Emergency Family and Medical Leave Extension Act (EFMLEA) coverage is only available if your child’s school or place of care is closed or your childcare provider is unavailable.  To request leave to care for your child, employees must provide to their employer the following:

  • The name of your child;
  • The name of the school, place of care, or childcare provider that has closed or become unavailable; and
  • A statement that no other suitable person is available to care for your child.

The IRS assumes that children older than age 14 can care for themselves during daylight hours. If that is not the case, employees must provide a statement explaining the special circumstances that exist requiring them to care for the child.

Employers should maintain all records regarding EFMLEA leave for at least 4 years.

Not All Paid Leave Under FMLA Is Paid Leave

The only type of family and medical leave that is paid leave, is the EFMLEA. Regular FMLA leaves are still not paid leave unless the employee chooses to use accumulated sick leave or PTO.

 

The information contained herein should be understood to be general insurance brokerage information only and does not constitute advice for any particular situation or fact pattern and cannot be relied upon as such.  Statements concerning financial, regulatory or legal matters are based on general observations as an insurance broker and may not be relied upon as financial, regulatory or legal advice.  This document is owned by Alera Group, Inc., and its contents may not be reproduced, in whole or in part, without the written permission of Alera Group, Inc.

Legal Alert: What Employers are Subject to the Families First Coronavirus Response Act (FFCRA)?

Posted on March 31st, 2020

Updated 04/01/20

Which Employers Are Subject To The Act?
The Families First Coronavirus Response Act (FFCRA) was signed into law on March 18, 2020. That law includes the new Emergency Paid Sick Leave Act (EPSL) and the Emergency Family and Medical Leave Expansion Act (EFMLA). The benefits and eligibility of those Acts are discussed in a separate document.

The effective date of FFCRA is April 1, 2020. Over the past week, the Department of Labor (DOL) has issued a series of Questions and Answers to explain how they plan to administer the new EPSL and EFMLA.

On March 31, the IRS issued the first of what will likely be a series of Questions and Answers on the FFCRA. These Q&As provide some detail on how to receive tax credits for providing EPSL and EFMLA plus substantiation needed from employees filing for claims and recording keeping needed by employers.

Which Employers Are Subject to EPSL and EFMLA?
Generally, private employers with fewer than 500 employees and public sector employers of any size are subject to these laws. Some employers with fewer than 50 employees may be exempt for the Act, see below.

Public sector employers include States, Cities, Municipalities, Townships, Counties, Parishes, the District of Columbia, a Territory or possession of the United States government, school districts, or similar entities. 

Most federal employees are not entitled to benefits under EFMLA, since the Act amended Title I of the FMLA and most federal employees are covered instead by Title II of the FMLA. 

Counting Employees
The 500-employee threshold is determined at the time your employee requests to take EPSL or EFMLA. If an employee files for leave on April 3rd, then the employer would look at the employee count on April 3. There is no averaging over the past 30 days, it is based on the employee count on the day that the employee requests leave. It is possible that an employer could have more than 500 employees on one day, fewer than 500 the next day, and then be back over the 500-employee threshold on the third day.

Both the EPSL and EFMLA use the employee definition provided in the Fair Labor Standards Act (FLSA). The employee count includes: 

  • Full-time and part-time employees working in the U.S. and its Territories.
  • Employees on leave.
  • Temporary employees who are jointly employed by two employers (regardless of whether the jointly employed employees are maintained on only one of the employer’s payroll).
  • Day laborers supplied by a temporary agency (regardless of whether it is the temporary agency or the client firm if there is a continuing employment relationship).

Independent contractors as defined under the FLSA, are not considered employees for purposes of the 500-employee threshold.

A corporation (including its separate establishments or divisions) is a single employer and all its employees are included in establishing the 500-employee threshold. If a corporation has an ownership interest in another corporation, the two corporations are separate employers unless they are joint employers under the FLSA.  If two entities are joint employers, all of their common employees must be counted in determining whether EPSL and EFMLA must be provided. 

If an employee performs work for an employer that also benefits another individual or entity, the FLSA has a four-factor balancing test to determine whether the employer is directly or indirectly controlling the employee: 

  1. Who hires or fires the employee;
  2. Who supervised and controls the employee’s work schedule or conditions of employment to a substantial degree;
  3. Who determines the employee’s rate and method of payment; and
  4. Who maintains the employee’s employment records.

Determining whether employers are joint or separate, is based on fact and circumstances tests as outlined by the FLSA. Employers who don’t know how they are categorized under the FMLA integrated employer rules or still have questions need to discuss these issues with their legal counsel. 

Small Employer Exemption
Small employers with fewer than 50 employees may be exempted from providing EPSL and EFMLA benefits if doing so would jeopardize the viability of the business as an ongoing concern. Small employers can claim an exemption if an authorized officer of the business has determined that:

  1. Providing EPSL or EFMLA benefits would result in the small business’s expenses and financial obligations exceeding business revenues and cause the business to cease operating at a minimal capacity;
  2. The absence of the employee or employees would entail a substantial risk to the financial health or operational capabilities of the small business because of their specialized skills, knowledge or the business or responsibilities; or
  3. There are not sufficient workers who are able, willing, and qualified, and who will be available at the time and place needed, to perform the labor or services provided by the employee or employees requesting EPSL or EMLA, and these labor or services are needed for the business to operate at a minimal capacity.

Healthcare Workers Are Exempted From EPSL and EFMLA Benefits
FFCRA also stated that employers could exclude healthcare providers and emergency responders from being able to receive leave under EPSL and EFMLA. 

A healthcare provider is anyone employed at any doctor’s office, hospital, healthcare center, clinic, post-secondary educational institution offering healthcare instruction, medical school, local health department or agency, nursing facility, retirement facility, nursing home, home healthcare provider, any facility that performs laboratory or medical testing, pharmacy or any similar institution employer or entity.  

This definition includes any individual employed by an entity that contracts with any of the above employers to provide services or to maintain the operation of the facility. Included in this list is anyone who provides medical services, produces medical products, or is otherwise involved in the making of COVID-19 related medical equipment, tests, drugs, vaccines, diagnostic vehicles, or treatments.  The list was not intended to be all inclusive. It also includes anything that the highest state or territory official determines to be a health care provider necessary to responding to COVID-19. 

An emergency responder is an employee necessary for the transport, care, healthcare, comfort, and nutrition of patients with COVID-19 or whose services are needed to limit the spread of COVID-19. The list includes but is not limited to military or national guard, law enforcement officers, correctional institution personnel, fire fighters, emergency medical services personnel, physicians, nurses, public health personnel, emergency medical technicians, paramedics, emergency management personnel, 911 operators, public works personnel, and persons with skills or training in operating specialized equipment or other skills needed to provide aid in a declared emergency as well as individuals who work for such facilities employing these individuals and whose work is necessary to maintain the operation of the facility.

Recordkeeping

Private-sector employers are eligible for reimbursement of the costs of EPSL and EFMLA leave through refundable tax credits. Only leave provided between April 1, 2020 and December 31, 2020 is eligible for the tax credits.

Eligible employers will substantiate eligibility for the sick leave and family leave credits if the employer receives a written request for such leave from the employee in which the employee provides:

  1. The employee's name;
  2. The date or dates for which leave is requested;
  3. A statement of the COVID-19 related reason the employee is requesting leave and written support for such reason; and
  4. A statement that the employee is unable to work, including by means of telework.

If the qualified leave wages exceed the employers share of social security tax owed for a quarter, the excess amount is refundable. Employers can file Form 7200, Advance Payment of Employer Credits Due to COVID-19 to receive a refund.

In the case of a leave request based on a quarantine order or self-quarantine advice, the employee should provide documentation regarding the name of governmental entity or healthcare professional advising the quarantine.

In the case of a leave request based on a school closing or child care provider unavailability, the statement should include the name and age of the child(ren) to be cared for, the name of the school that has closed or the name of the place of care that is unavailable, and some sort of documentation that they are closed. For child(ren) older than 14 during daylight hours, a statement explaining the special circumstances of why the child needs the employee to provide care.

Employers should keep all records of employment taxes for at least 4 years after the date the tax becomes due or is paid, whichever comes later.

We recommend that employers consult with their tax advisor and/or legal counsel for detailed questions regarding claiming the tax credits offered under FFCRA.

  • The DOLs Q&A document can be found on their website and here.
  • The IRSs Q&A document can be found on their website and here.
     

The information provided in this alert is not, is not intended to be, and shall not be construed to be, either the provision of legal advice or an offer to provide legal services, nor does it necessarily reflect the opinions of the agency, our lawyers or our clients.  This is not legal advice.  No client-lawyer relationship between you and our lawyers is or may be created by your use of this information.  Rather, the content is intended as a general overview of the subject matter covered. Those reading this alert are encouraged to seek direct counsel on legal questions.

Wellbeing Wrap-up: COVID-19 & Holistic Wellbeing

Posted on March 27th, 2020

It’s no secret that many people are under a tremendous amount of stress because of the coronavirus outbreak and its disruption to daily life. At this point, wellbeing may feel unattainable, however, with the right mindset and some effort it is possible!

Gretchen Day, VP of Health Innovation & Advanced Strategies at AIA, Alera Group, interviews John Troutman (Mazzitti & Sullivan EAP Services) on tips to boost your wellbeing during this unprecedented period of social distancing.

We hope you’ll listen to the full podcast here.

Here are our 5 main takeaways:

  1. Establish a routine. Take this opportunity to re-evaluate your current routine and see this time as an opportunity to make some changes. Having a schedule helps create a feeling of normalcy, despite living in these uncertain times.
     
  2. Mindset. Making the transition to working from home is an adjustment. Instead of focusing on the problems, look for solutions and spend time getting those into place. Try to see each day as an opportunity instead of a roadblock.
     
  3. “Over” communicate. We are more connected today than ever thanks to technology. Be sure to make the most of these platforms. Additionally, never underestimate the power of hearing another person's voice. While texting and emailing has its place, don’t be afraid to communicate through calling or virtual meetings.
     
  4. Focus on what you can control. It may seem like there is nothing we can control right now, but that’s not the case! There is so much we can still control when we allow ourselves to think outside of the box. For example, there are creative ways to work out, enjoy family time and connect with co-workers.
     
  5. Take a break. Statistics say that we are 87% more productive after a 10-minute break. Think of this break as an investment in yourself. These breaks could include listening to music, going for a walk or talking to a loved one. Find something that makes you feel relaxed and let yourself take a break during the workday.

Again, if you want to tune in to the complete podcast, you can listen here. For weekly updates from Alera Group, sign-up for our COVID-19 newsletter on our live dashboard
 

About the Podcasters:

Gretchen Day
VP of Health Innovation & Advanced Strategies
AIA, Alera Group

Gretchen leads our DiscoverHealth® department in the Employee Benefits Division of AIA, Alera Group. She provides support to clients in their cost containment, population health management and wellbeing initiatives. Gretchen believes that employers hold the key to improving healthcare and the health of their employees and is passionate about bringing forth solutions to enhance the overall health and well-being of employees.

John Troutman
National Marketing and Business Development
Mazzitti & Sullivan EAP Services

John has been a presenter and public speaker for nearly 20 years with a background in training, development and marketing. You can connect with John on LinkedIn.

Legal Alert: FFCRA Employee Notice

Posted on March 26th, 2020

The Department of Labor (DOL) released the notice that employers are required to post in their workplaces in relation to the Families First Coronavirus Response Act (FFCRA). A copy of the notice can be downloaded by clicking here.

While the notice technically must be posted in a “conspicuous place in the physical workplace," we understand that many people’s offices are voluntarily or involuntarily closed or that it may not be safe to go into an office. While the notice still should be posted when it is prudent to do so, in the meantime we recommend (where possible) distributing the notice electronically and/or placing it on a company intranet.

The Department of Labor is still in the process of drafting regulations, on which we will advise shortly after they are released.

As always, please let us know if you have any questions or need additional information.

For the latest updates from the Alera Group team regarding coronavirus (COVID-19), please visit our live dashboard at aleragroup.com/coronavirus

 

The information provided in this alert is not, is not intended to be, and shall not be construed to be, either the provision of legal advice or an offer to provide legal services, nor does it necessarily reflect the opinions of the agency, our lawyers or our clients. This is not legal advice. No client‐lawyer relationship between you and our lawyers is or may be created by your use of this information. Rather, the content is intended as a general overview of the subject matter covered. This agency and Marathas Barrow Weatherhead Lent LLP are not obligated to provide updates on the information presented herein. Those reading this alert are encouraged to seek direct counsel on legal questions.

© 2020 Marathas Barrow Weatherhead Lent LLP. All Rights Reserved.

Legal Alert: Collecting Premiums During Employee’s Leave of Absence

Posted on March 23rd, 2020

This article was last review on April 10, 2020.

When an employee takes an unpaid leave of absence, the question arises on how an employer should collect benefit premium payments to continue benefits during that time. The only regulatory guidance on this comes from the original Family and Medical Leave Act (FMLA) regulations.

Following those, employers have three choices, they can utilize just one method, two methods or all three:

  1. Pay in advance. Employers can collect a lump sum payment for missed payroll deductions in advance of the leave of absence. Employees should consult with their personal tax advisor on any credits or deductions they might receive for paying premiums post-tax.
     
  2. Pay as you go. Employees can remit payment post-tax, with payment deadlines coinciding with pay periods. Employers should set firm guidance on where to remit payment, when it is due, and warn employees that missed payments will subject the employee to plan termination retroactive to the due date of the payment; which could expose the employee to claims if they seek healthcare services during that time.  
     
  3. Pay upon return.  Employers can allow employees to pay premiums pre or post-tax upon return. It is highly encouraged to give employees a certain amount of pay periods to pay back each missed premium payment. All employees should be provided the same amount of time to pay back missed premiums. For example, employees could be provided 2 pay periods to pay back one missed premium payment. Employees who do not return to work and do not pay back their premiums can either have coverage terminated retroactively to the last date paid, or the employer can treat the missed payment as a debt. Counsel should be consulted on how to handle this debt. Employers should clearly communicate the ramifications of not returning to work on the employee’s coverage.

For the latest updates from the Alera Group team regarding coronavirus (COVID-19), please visit our live dashboard at aleragroup.com/coronavirus

 

The information contained herein should be understood to be general insurance brokerage information only and does not constitute advice for any particular situation or fact pattern and cannot be relied upon as such.  Statements concerning financial, regulatory or legal matters are based on general observations as an insurance broker and may not be relied upon as financial, regulatory or legal advice.  This document is owned by Alera Group, Inc., and its contents may not be reproduced, in whole or in part, without the written permission of Alera Group, Inc.

Physician Practices Flexing Their Operating Model in Response to COVID-19

Posted on March 23rd, 2020

Many physician practices are expanding their telehealth capabilities in response to the COVID-19 outbreak.

At the same time, they are rescheduling many routine appointments for several months from now, especially for patients who might be older or are burdened by chronic conditions.

The telehealth strategy can be an effective method to address screening for the COVID-19 virus.  Using telehealth as the ‘first gate’ to screening a patient is also a way to stretch the inventory of protective equipment supplies.

The federal government (CMS) issued regulatory guidance on March 17, 2020, which expanded the use of telehealth, ‘virtual’ visits, and e-visits for Medicare beneficiaries. 

Alera Group’s Professional Liability practice has fielded many calls from physician practice clients who seek clarification relating to telemedicine and malpractice insurance coverage. 

Alera Group’s team has offered the following:

“Our guidance is that based on your clinical judgment and in the interest of continuity of care, please use alternative methods such as telephone and video conferencing as available.  For video conferencing, please work with the vendor to ensure the software includes encryption and HIPAA compliance.  Based on your clinical judgment, consider postponing visits of an elective or non-emergent nature if you think it is not possible to adequately evaluate the patient over telephone or video conference methods.  Information on this is evolving quickly and the March 17, 2020 release from CMS provides additional clarity specific to Medicare beneficiaries.”

For the latest updates from the Alera Group team regarding coronavirus (COVID-19), please visit our live dashboard at aleragroup.com/coronavirus

 

About the Author: 

This blog was written by John O’Connell, CEBS, CLU, Healthcare Practice Lead, Alera Group.  This blog post is intended to provide general information regarding the status of, and/or potential concerns related to current employer HR and benefits issues.  This blog should not be construed as, nor is it intended to provide, legal advice.  The opinions expressed herein are based upon the author’s experience as a Healthcare consultant and may not reflect the opinions of your counsel.

Legal Alert: Notice Requirements When Making Health Plan Design Changes

Posted on March 21st, 2020

This alert was updated on 04/16/20. 

As employers work to stay financially solvent during the COVID-19 pandemic, many are looking to change their health plan designs in order to ensure employees have access to the care they need while balancing the financial impact on the business. For instance, employers may be looking to: 

  • Reduce the number of hours to be eligible for benefits to allow employees who are furloughed or working fewer hours to remain enrolled
  • Permit employees to take advantage of the COVID-19 special enrollment period being offered by their carriers  

Likewise, the CARES Act, signed into law on March 27, 2020 created changes which may impact an employer’s plan design: 

  • Relaxed the provision for health FSAs, HSAs, HRAs and other accident and health plans to require a doctor’s prescription for over the counter (OTC) medications in order to be considered an eligible medical expense reimbursement and also permits menstrual care products to also qualify as medical care for purposes of reimbursement or tax-free distribution.  

  • Permits high deductible health plans (HDHPs) beginning before 1/1/2022 to allow telehealthcare services prior to meeting the deductible without disqualifying their HSA compatibility status. (IRS Notice 2020-15 also allows HDHPs to pay for COVID-19 testing and treatment prior to meeting the deductible.) 

The type of plan change contemplated by the employer dictates: 

  1. When notice must be given to employees 

  2. Whether approval from their carrier (or stop-loss provider if benefits are self-insured) is needed and; 

  3. May require amendments to plan documents.  

Note: although a carrier may permit a COVID-19 special enrollment period, currently, because the IRS has not issued additional guidance, employers should continue to follow the law and regulations set-forth in providing Section 125 benefits which require pre-tax premiums to be irrevocable unless the employee experiences a permitted status change event. 

It is possible the IRS may be less likely to penalize plan sponsors that allow a special open enrollment given the unprecedented circumstances; however, employers need to be aware that there is still risk and should work with qualified legal or tax advisors if they want to permit employees to enroll on a pretax basis. 

The DOL, HHS and IRS announced through a recent Family First Coronavirus Response Act (FFCRA) Frequently Asked Questions (FAQs) that they will not take enforcement action against plans or insurers that adopt modifications to provide greater coverage for COVID-19 diagnosis or treatment. Normally there is a 60-day advance notice to enrollees required for mid-year material modifications to the Summary of Benefits and Coverage (SBC). The agencies have said that distributing a notice is still required but can be made as soon as reasonably practicable, and not required 60-days prior to the change. If the changes will be maintained beyond the federal emergency health declaration period, then the insurance carrier or health plan must comply with all other applicable requirements to updated plan documents or terms of coverage. 

The following chart outlines the normal required notice requirements depending on the type of plan change that is being implemented.

Type of Change

Notice Requirement

Which Plans

Changes to any information found in the Summary of Benefits and Coverage (SBC) which includes deductibles, out of pocket limits, whether or not referrals are needed for specialists, copays, coinsurance, whether or not preauthorization is needed, services the plan does not cover, and what additional services are covered by your plan.

Prior to implementing any change that would require an updated SBC, plan participants must be given 60 days advance notice in the form of an updated SBC. This is a firm requirement.

This notice requirement is for ALL group health plans, regardless of whether or not they are subject to ERISA.

Modifications to a summary plan description (SPD) that constitute a material reduction in covered services or benefits. For example, a decrease in employer contributions, or a material modification to plan terms.

Notice must be provided within 60 days of making the change. Practically speaking, employers should strive to give notice prior to making the change, but under ERISA, they have until 60 days after the change to inform employees. Notice should be provided in the format of a Notice of Material Modification.

This notice requirement is only for group health plans subject to ERISA.

All other changes (not a material reduction in benefits and no impact on the SBC)

Notice must be provided within 210 days after the end of the plan year, in the format of a Summary of Material Modification (SMM).

This notice requirement is only for group health plans subject to ERISA.

Assuming that these changes occur mid-year and that the employer has a Section 125 Plan so that employee contributions are handled on a pre-tax basis, depending on the change being made to the benefits and/or contributions, the employee may be able to:

  • Drop coverage for themselves and any covered dependents.
  • Not change which dependents are being covered, except to delete coverage for themselves and all covered dependents.
  • At the employer’s decision, employees (and covered dependents) could choose a different plan option assuming more than one plan is offered.

Mid-year changes in benefits and/or contributions due to the consistency rulewould not trigger either a full or partial open enrollment.

If an employee’s spouse or dependent child under age 26 was to lose coverage due to a layoff or furlough at their employer, then this would be a change in status event that would allow the employee to add dependents onto their plan.

For the latest updates from the Alera Group team regarding coronavirus (COVID-19), please visit our live dashboard at aleragroup.com/coronavirus

 

The information contained herein should be understood to be general insurance brokerage information only and does not constitute advice for any particular situation or fact pattern and cannot be relied upon as such.  Statements concerning financial, regulatory or legal matters are based on general observations as an insurance broker and may not be relied upon as financial, regulatory or legal advice. This document is owned by Alera Group, Inc., and its contents may not be reproduced, in whole or in part, without the written permission of Alera Group, Inc.

How to Create an Ergonomic Workspace (and a More Tension-Free Workday) in Your Home

Posted on March 20th, 2020

The constant barrage of news coverage and COVID-19 statistics are enough to make anyone’s shoulders tense… but your remote work set-up shouldn’t! Some people are familiar with working from home and already have a home office set-up, but for others, this is uncharted territory. For those new to remote work, there are plenty of tips and tricks for effectively and collaboratively working remotely, but the piece that is often forgotten until it’s too late is ERGONOMICS.

Steps for a More Ergonomic Workspace:

  1. Start by finding a 90° angle at your elbow with your wrists in a straight line with your forearm (usually this is about belly-button height). Raise or lower your chair as needed to maintain this alignment with the keyboard. This is usually the most static component because we’re limited by the furniture on hand, so start here!
  2. To ensure natural support of the back, consider lumbar support (like a pillow!). Then think about maintaining proper posture in your neck and shoulders.
  3. Rest your feet on the floor or a footrest. A stack of books or a cardboard box can work. Me? I’m currently using an old subwoofer.
  4. Adjust the height of your screen/monitor so your eyes are level with the top third of the screen. A stack of books or board games works great. Remember to avoid lights that cause glare and to adjust the brightness and color balance on your screen to keep things easy on the eyes.
  5. A laptop by itself will never meet all the above angles. If you place the keyboard low enough for proper forearm/wrist alignment, the screen will be too low for your neck to be neutral. If you raise the laptop so the top of the screen is level with your eyes, the keyboard will be too high. If you’re in this position (and even if you do have peripherals!) try the below tips.

Take a look at the diagram below! 

Tips for a Tension-Free Workday:

  1. Change positions often. Watching a webinar? Stand up and do some light stretching while you watch it. On a phone call? Walk while you talk. If you haven’t found the ideal home office workspace yet, it’s even more important to mix things up!
  2. Be creative. More equipment isn’t necessarily the answer to building an ergonomic workstation. It’s all about finding the right angles of proper alignment (did you notice the pun?).
  3. Take micro-breaks. Give your eyes a break by looking at something in the distance for 20 seconds every 20 minutes. Don't forget to stand up and wiggle around every 30 to 60 min.
  4. Stretch it out. Review the 10 Best Stretches for Office Workers to get your daily stretches in. 

Take a look at how you’re sitting right now… what will be your first action for a more ergonomic workspace? 

For the latest updates from the Alera Group team regarding coronavirus (COVID-19), please visit our live dashboard at aleragroup.com/coronavirus

 

About the Author: 

Kristie White, Human Resources Manager, brings a background in teaching, benefits compliance, and payroll to her HR role that supports her passion for policies, training and development (yes, those are totally different areas!). She has a strong eye for detail and always prefers to go straight to the source. Kristie has been with TRUEbenefits, an Alera Group Company since 2016. She maintains a WA Producer license, Certified Payroll Professional (CPP) and Professional in Human Resources (PHR) certifications. Kristie enjoys volunteering with the IRS/AARP Tax-Counseling for the Elderly program as a certified tax preparer.

COVID-19 and DCAPs, FSAs, and Transit Benefit Concerns

Posted on March 20th, 2020

This alert was updated on 5/13/2020.

In the wake of the COVID-19 pandemic, many employers are dealing with how to handle employees requesting to make changes to their Section 125 or Cafeteria Plan elections. For instance, an employee's Dependent Care Assistance Program (DCAP) election when they are no longer working and not in need of childcare, or alternatively, an employee’s childcare program/center/provider has closed due to the pandemic.

On May 12, 2020, the IRS issued Notice 2020-29, which, among other things, allows employers to amend their plan documents to permit employees to make mid-year changes prospectively for health flexible spending arrangements (health FSAs) and DCAPs.

This article looks at options for DCAPs, FSAs and transit benefit concerns. Charts showing common situations are included.

Dependent Care Assistance Programs

DCAPs, sometimes referred to as “dependent flex spending accounts,” are an employer-sponsored plan to provide the exclusive benefit of dependent care assistance. Under the Internal Revenue Code (IRC) employees can exclude up to $5,000 annually from the gross income for dependent care. DCAPs are subject to flexible spending arrangement rules under the IRC.

General Principles

Because of their tax favored status, DCAPs are subject to many regulations. Any common law employee can participate in a DCAP. To have dependent care expenses reimbursed by the program the following general requirements must be met:

  • The expense must enable the employee (and their spouse) to be gainfully employed
  • The expense must be for a qualifying individual (a child under the age of 13)
  • The expense must be for care, not education (daycare is acceptable, private school tuition is not)
  • The expense must be incurred in the coverage period (the plan year)
  • The expense must be substantiated

Exclusion from Income

An employee's exclusion from income for payments under a DCAP in a calendar year is limited to the smallest of the following amounts:

  • $5,000 if the employee is married and filing a joint return or if the employee is a single parent ($2,500 if the employee is married but filing separately);
  • The employee's “earned income” for the year; or
  • If the employee is married at the end of the taxable year, the spouse's earned income

The spouse of a married employee is deemed to be gainfully employed and to have an earned income of not less than $250 per month if there is one qualifying individual, or $500 per month if there are two or more qualifying individuals in each month during which they are a full-time student, or is incapable of self-care and has the same principal place of abode as the employee for more than half the year.

Leave of Absence

If an employee takes a leave of absence they may no longer be considered “gainfully employed” and eligible for dependent care reimbursements during their leave. In general, this is determined daily, however, there is an exception to the “daily basis” rule for certain short, temporary absences (e.g. Emergency Paid Sick Leave) and part-time employment.

This exception is based on the IRS regulations establishing a “safe harbor” under which an absence of up to two consecutive calendar weeks is treated as a short, temporary absence. However, whether an absence for longer than two weeks qualifies as short and temporary is determined on the basis of facts and circumstances.

Likewise, when it comes to FMLA, the IRS does not agree that one’s entire absence under FMLA (which guarantees eligible employees up to 12 weeks of unpaid leave for certain purposes) is appropriate as a temporary absence safe harbor, noting that an absence of 12 weeks “is not a short, temporary absence” within the meaning of the regulations

Reimbursements

Reimbursements are subject to the same rules as flexible spending arrangements (FSAs). The period of coverage must be 12 months unless there is a short plan year. DCAPs that are underspent lead to forfeited money, unused contributions cannot carry over from year to year. DCAPs are not subject to COBRA and the participant has no right to coverage after their plan participation terminates. Employers can provide for a spend-down provision in their plan documents to allow former employees to receive reimbursement through the end of the plan year in which they terminated employment and coverage. If the plan document does not provide for this spend down, the funds are forfeited.

Reimbursements During Leave of Absence

Although the employee may not be eligible to reimburse dependent care expenses while on leave, an employee on LOA may be able to continue to participate in (and make contributions to) a DCAP but any reimbursements from the DCAP will still be subject to the gainfully employed rule and would have to fall within the exception for short, temporary absences.

Changes to Elections

Under the cafeteria plan regulations, elections are irrevocable unless a permitted event occurs or there is an exception. For DCAPs this is:

  • A change in status
  • A change in cost and coverage
  • FMLA (employees taking FMLA leave can revoke elections of non-health benefits and reinstate their benefits upon return from leave)

Notice 2020-29 addresses an exception and allows cafeteria plans to be amended to permit employees to make mid-year election changes to prospectively revoke an election, make a new election, or decrease or increase an election to a health FSA (including a limited purpose health FSA) or DCAP. 

IRS rules govern dependent care assistance programs (DCAPs) also known as dependent care FSAs, including the requirement that elections are generally irrevocable except in the case of a “change event”. However, an employer is not required to recognize all the IRS permitted election changes when designing their FSA plan. Therefore, if an employee requests to change their dependent care FSA election, employers need to be mindful of:

  • FSA plan document language – must explicitly permit changes to elections due to a change in cost. If it does not, an employer may want to consider prospectively amending their plan to include this change event.
  • Following their plan’s rules to avoid plan disqualification
  • Refunds for dependent care FSA contributions already taken from an employee’s paycheck are not permissible.
Dependent Care Event Election Change
A new childcare provider is available at a different cost than the current provider. Includes someone (e.g. parent, older sibling) agreeing/able to watch the child for free. Employee may increase or decrease election amount consistent with change in qualified dependent care expenses. Employee may cancel the election if child is now being cared for at no cost.
Enrolling child at a childcare provider closer to home or new work location. Employee may increase or decrease election amount consistent with change in cost.
An employee or their spouse has a new work schedule (including to or from part-time status), and a different number of hours of childcare are required. Employee may increase or decrease election amount consistent with change in cost.
A child who was not previously enrolled in childcare, now needs a childcare provider due to schools being closed. Employee may enroll in dependent care FSA. Or increase their election if they are enrolling an additional child not previously enrolled in childcare.
A child’s daycare closed. Employee may decrease or cancel their election.

 

It is likely that many of the reasons an employee no longer needs childcare as the result of the COVID-19 pandemic would allow them to change their DCAP contributions, potentially reducing them to zero dollars, particularly if their child has been pulled from care (change in cost and coverage), or they are taking FMLA leave (including the newly created FMLA leave under the new FFCRA).

Therefore, employers should be lenient and allow employees to change their DCAP contributions within the above scenarios. Employers with employees who are laid off (not expected to return to work) should consult with counsel to see if their plan documents allow for a spend down, or if that change can be made mid-plan year.

In addition, under the new guidance, an employer is also permitted to amend their plans retroactively to January 1, 2020 to permit an employee to revoke their DCAP election prospectively which in turn would give more latitude for permissible reasons for an employee to change their DCAP contributions mid-plan year.

Healthcare Flexible Spending Account Programs (HCFSAs)

REMINDER: A health care FSA may (but is not required to) permit an employee to change their health FSA election for IRS permitted qualifying change in status events.  Employers should refer to their FSA plan documents to determine which events their plan recognizes. Employers wishing to allow the new temporary exception due to the pandemic must amend their plans by 12/31/2021 but the change can be retroactive to 1/1/2020.

Similar to DCAPs, health FSA elections generally are irrevocable and the IRS only permits mid-year changes when an IRS approved qualifying status change has occurred. However, due to the pandemic, the IRS is now permitting employers to amend their plans to temporarily allow each eligible employee to make prospective election changes or an initial election for the 2020 calendar year, regardless of whether the election change satisfies one of the permitted election changes under applicable Treasury regulations. Any change in employment status of the employee, spouse or dependent that affects eligibility for the health FSA is a qualified status change and the change in the election must be on account of the qualified status change.

Commuter Benefit Programs

During this COVID-19 pandemic, employees may be staying at home with a child, working remotely or not working at all. The qualified transit or qualified parking elections previously made may no longer be needed now or perhaps for the foreseeable future.

If the employee is no longer in need of mass transit or parking costs, the employee may make a change to their elections, even down to $0. The materials provided at hire or during open enrollment should be reviewed to determine the frequency and timing of when employees may make changes to their election.  The employer can set the timing, for instance a change can be made at the next payroll period or perhaps the first of the month.

If no election change is made, the elections will automatically continue, and funds will continue to rollover monthly. If an election change is made, the funds available prior to the election change will continue to rollover to the next month and elections will be reduced.

Employers are encouraged to advise employees of their commuter benefit program options and a reminder of how to make the election change by paper, online through payroll, their benefits administration platform or another source.

Current monthly contributions levels are released annually by the IRS and can be found here.

 

For the latest updates from the Alera Group team regarding coronavirus (COVID-19), please visit our live dashboard at aleragroup.com/coronavirus

This document was authored by the Alera Group Compliance team. Alera Group based in Deerfield, IL serves thousands of clients nationally in employee benefits, property and casualty, risk management and wealth management. Alera Group is the 15th largest independent insurance agency in the country.

The information contained herein should be understood to be general insurance brokerage information only and does not constitute advice for any particular situation or fact pattern and cannot be relied upon as such.  Statements concerning financial, regulatory or legal matters are based on general observations as an insurance broker and may not be relied upon as financial, regulatory or legal advice.  This document is owned by Alera Group, Inc., and its contents may not be reproduced, in whole or in part, without the written permission of Alera Group, Inc.

Congress Passes Families First Coronavirus Response Act

Posted on March 19th, 2020

On March 18, Congress passed, and President Trump signed into law, the Families First Coronavirus Response Act (FFCRA). The FFCRA is a bipartisan effort to help employers and individuals alike in managing pay, benefits, and business considerations during the COVID-19 pandemic. The focus of this alert is the impact of FFCRA on employer-sponsored benefits and paid leave. The paid leave provisions of the Act apply to employers with less than 500 employees.  They are effective within 15 days from date of enactment and expire at the end of 2020, unless extended. 

Mandated Free Testing

FFCRA mandates free COVID-19 testing from all group health plans, including fully insured and self-funded plans, as well as grandfathered plans. All group health plans must waive cost-sharing, prior authorization requirements, and other medical management as it relates to COVID-19 testing. This includes provider office visits, urgent care, emergency room, and other healthcare visits that are for the purpose of evaluating or administering testing.

Emergency FMLA

The FFCRA provides for up to 12 weeks of job-protected leave under the Family and Medical Leave Act (“FMLA”) for a “qualifying need related to a public health emergency.” These provisions generally apply to private-sector employers with under 500 employees and all government employers.  (There are exceptions for employers with less than 50 employees if the required leave would jeopardize the viability of their business.)  This new law expands the leave for employees who have been employed at least 30 days, overriding, for these purposes, FMLA’s general requirement that employees must be employed for at least 12 months to be covered. For these purposes, a “qualifying need” exists if an employee is unable to work or telework because he/she/they need to care for a child who is under 18 years if their school or place of care has been closed, or the child care provider is unavailable, due to a public health emergency, such as COVID-19.

This Emergency FMLA rule also requires employers to pay employees after 10 days.  Employees on leave are to be paid at two-thirds of their regular rate of pay, based on normally scheduled hours, up to $200 per day and to a maximum of $10,000.

Emergency Paid Sick Leave

FFCRA requires employers with less than 500 employees to provide paid sick leave to any employee who is unable to work or telework because the employee: 

  1. Is subject to a federal, state, or local quarantine or isolation order related to COVID-19;
  2. Has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
  3. Has COVID-19 symptoms and is seeking medical diagnosis;
  4. Is caring for an individual who is subject to a quarantine or isolation order;
  5. Is caring for a child if the school or daycare center has been closed, or the child care provider is unavailable, due to COVID-19 precautions; or
  6. Is experiencing any other substantially similar condition specified by the regulatory agencies.

Overall, employees are entitled to at least 80 hours of paid sick leave (prorated for part-time employees). An employee is immediately eligible on date of hire. An employer cannot require an employee who is eligible for paid sick leave to find a replacement or be involved in finding a replacement for their scheduled work shift. Paid leave is limited to $511 per day ($5,110 total) for an employee’s own illness or quarantine (paid at the employee’s regular rate), and $200 per day ($2,000 total) for leave to care for others (paid at two-thirds of the employee’s regular rate). Failure to pay the required sick leave is treated as a failure to pay minimum wages in violation of the Fair Labor Standards Act.

Tax Credits

FFCRA offers some relief to employers who are now required to provide paid leave. The credit is available for up to $200 per day for Emergency FMLA and up to $511 per day for Emergency Paid Sick Leave payments. The credit is calculated on an individual employee basis for a total of 10 days paid leave. Employers should maintain records on employees who qualify for leave, which includes the reason for the leave, and the days taken in order to substantiate qualifications for the credit.

There is also another tax credit for employers who continue to provide health coverage to employees who take Emergency FMLA or Emergency Paid Sick Leave. Employers may receive a credit for the amount paid toward maintaining the health plan, for the amounts excluded from an employee’s gross income as it related to federal income tax. This is in addition to wages paid for qualifying leave, but it cannot exceed the credit available for Emergency FMLA and Emergency Paid Sick Leave. This credit is to be requested on quarterly tax returns. It will be included in an employer’s gross income.

What Employers Should Expect Next

We expect additional guidance at the state and federal levels that may impact employee benefit plans, and potentially more state leave requirements. It is also important for employers to stay up-to-date on their state and municipal notices, as some are providing for insurance requirements. In addition, employers need to be cognizant of local and state emergency regulations that may affect how employers in certain industries, such as food services, operate during a public health emergency.

For more information on COVID-19, see:

For the latest updates from the Alera Group team regarding coronavirus (COVID-19), please visit our live dashboard at aleragroup.com/coronavirus

About the Authors.  This alert was prepared for Alera Group by Marathas Barrow Weatherhead Lent LLP, a national law firm with recognized experts on the Affordable Care Act.  Contact Stacy Barrow or Alyssa Oligmueller at sbarrow@marbarlaw.com or aoligmueller@marbarlaw.com.

The information provided in this alert is not, is not intended to be, and shall not be construed to be, either the provision of legal advice or an offer to provide legal services, nor does it necessarily reflect the opinions of the agency, our lawyers or our clients.  This is not legal advice.  No client-lawyer relationship between you and our lawyers is or may be created by your use of this information.  Rather, the content is intended as a general overview of the subject matter covered.  This agency and Marathas Barrow Weatherhead Lent LLP are not obligated to provide updates on the information presented herein.  Those reading this alert are encouraged to seek direct counsel on legal questions.

© 2020 Marathas Barrow Weatherhead Lent LLP.  All Rights Reserved.

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