Families First Coronavirus Response Act Paid Leave – Voluntary Extension Through March 31, 2021

The Consolidated Appropriations Act, 2021 (H.R. 133), which was signed into law on December 27, 2020, includes provisions that allow employers to voluntarily extend their Families First Coronavirus Response Act Emergency Paid Sick Leave and Emergency Paid FMLA leave through March 31, 2021 if they want to.

Importantly, the Act does NOT provide an additional 80 hours of Emergency PSL, and it does NOT provide an additional 10 weeks of EFMLA leave. Employers that decide to extend their leave should consider the following:

  1. Revise the end date in the Policies we previously provided, from December 31, 2020 to March 31, 2021 .
  2. Continue tracking the leave as before, and continue taking the tax credit, up through March 31, 2021, as you did in 2020.
  3. Anyone who used up their paid leave entitlement in 2020 will not benefit from the extension, because they already used it up. Anyone who did not use all the paid leave will have three more months to do so.
  4. Apply the extension to all employees.

ERISA Benefits Law Receives Recognition as a Top Tier Law firm in 2021 U.S. News – Best Lawyers® “Best Law Firms” Rankings

We are happy to announce that ERISA Benefits Law has again been recognized as a top tier law firm in the 2021 US News Best Lawyers® “Best Law Firms” rankings. The firm received a Tier 1 rankings in Employee Benefits (ERISA) Law and in Employment Law – Management. We are grateful for the recognition of our peers and the trust of our clients as a niche ERISA and employee benefits law firm focused on providing the highest quality legal services at the most affordable rates anywhere.

The U.S. News – Best Lawyers “Best Law Firms” rankings are based on a rigorous evaluation process that includes the collection of client and lawyer evaluations, peer review from leading attorneys in their field, and review of additional information provided by law firms as part of the formal submission process.

DOL Issues Revised FFCRA Leave Regulations in Response to Court Decision

The U.S. Department of Labor’s Wage and Hour Division (WHD) today posted revisions to regulations that implemented the paid sick leave and expanded family and medical leave provisions of the Families First Coronavirus Response Act (FFCRA).

The revisions made by the new rule clarify workers’ rights and employers’ responsibilities under the FFCRA’s paid leave provisions, in light of the U.S. District Court for the Southern District of New York’s August 3, 2020 decision in State of New York v Department of Labor, which found portions of the regulations invalid.

Background

The DOL issued its temporary rule to carry out the paid leave provisions of the FFCRA on April 1, 2020. See 85 FR 19326 (published April 6, 2020); see also 85 FR 20156 (April 10, 2020 correction and correcting amendment to April 1 rule).

On April 14, 2020, the State of New York filed suit in the United States District Court for the Southern District of New York (“District Court”) challenging certain parts of the temporary rule. On August 3, 2020, the District Court ruled that four parts of the temporary rule are invalid:

(1) the requirement under § 826.20 that paid sick leave and expanded family and medical leave are available only if an employee has work from which to take leave;

(2) the requirement under § 826.50 that an employee may take FFCRA leave intermittently only with employer approval;

(3) the definition of an employee who is a “health care provider,” set forth in § 826.30(c)(1), whom an employer may exclude from being eligible for FFCRA leave; and

(4) the statement in § 826.100 that employees who take FFCRA leave must provide their employers with certain documentation before taking leave.

The DOL’s Revised Rules

Today’s revisions to the temporary rules, effective immediately, reaffirm the prior regulations in part, revise the regulations in part, and further explain the DOL’s positions. Specifically, the DOL’s revised rules:

(1) Reaffirm that paid sick leave and expanded family and medical leave may be taken only if the employee has work from which to take leave and explains further why the DOL believes this requirement is appropriate. This temporary rule clarifies that this requirement applies to all qualifying reasons to take paid sick leave and expanded family and medical leave.

(2) Reaffirms that, where intermittent FFCRA leave is permitted by the regulations, an employee must obtain his or her employer’s approval to take paid sick leave or expanded family and medical leave intermittently under § 825.50 and explains further the basis for this requirement.

(3) Revises the definition of “health care provider” under § 825.30(c)(1) to mean employees who are health care providers under 29 CFR 825.102 and 825.125,3 and other employees who are employed to provide diagnostic services, preventive services, treatment services, or other services that are integrated with and necessary to the provision of patient care.

(4) Revises § 826.100 to clarify that the information the employee must give the employer to support the need for his or her leave should be provided to the employer as soon as practicable.

(5) Revises § 826.90 to correct an inconsistency regarding when an employee may be required to give notice of expanded family and medical leave to his or her employer.

More…

ERISA Benefits Law Attorney Erwin Kratz Named to the Best Lawyers in America© 2021

ERISA Benefits Law attorney Erwin Kratz was recently selected by his peers for inclusion in The Best Lawyers in America© 2021 in the practice area of Employee Benefits (ERISA) Law. Mr. Kratz has been continuously listed on The Best Lawyers in America list since 2010.

Since it was first published in 1983, Best Lawyers® has become universally regarded as the definitive guide to legal excellence. Best Lawyers lists are compiled based on an exhaustive peer-review evaluation. Lawyers are not required or allowed to pay a fee to be listed; therefore inclusion in Best Lawyers is considered a singular honor. Corporate Counsel magazine has called Best Lawyers “the most respected referral list of attorneys in practice.”

Attorney Lisa Dursey Joins ERISA Benefits Law

ERISA Benefits Law, PLLC is pleased to welcome ERISA attorney Lisa Dursey to the firm.

Prior to joining ERISA Benefits Law, Lisa practiced employee benefits at Stoel Rives in Seattle from 2016 to 2020, and corporate transactions at Alston & Bird in New York City from 2013-2016. Lisa received her law degree, cum laude, from Boston University in 2012, and a BA in Science and Technology Studies, with honors, from Cornell University in 2008.

Lisa D. Dursey
LDursey@ERISABenefitsLaw.com
(206) 618-9363 (Seattle)
(602) 282-0313 (Arizona)
Bio: https://erisabenefitslaw.com/lisa-dursey/
Hourly Billing Rate: $295

Lisa’s ERISA practice focuses on advising employers on the design, implementation, and administration of all types of employee benefits plans. She is passionate about providing comprehensive, easily digestible, and pragmatic advice for her clients. Clients seek her guidance to help them realize the maximum value from their employee benefit programs.

Lisa assists clients with a wide range of benefits matters, including qualified and nonqualified retirement plans, executive compensation programs, health and welfare programs, and other fringe benefit programs. She regularly advises employers on design changes to their benefit plans to address regulatory updates and to optimize the company’s benefit offerings. Lisa is also experienced in helping plan sponsors correct operational failures, including through corrective filings with the IRS and Department of Labor when necessary. 

Lisa’s addition provides ERISA Benefits Law further depth to meet our clients’ needs. Lisa and Erwin will bring a team approach to each client and each matter, allowing us to apply the necessary expertise to continue solving your ERISA and employee benefits-related legal issues as efficiently and effectively as possible.

Learn More – Lisa’s Full Bio

IRS Announces 2021 HSA Contribution Limits, HDHP Minimum Deductibles and HDHP Maximum Out-of-Pocket Amounts

The IRS has announced 2021 HSA and HDHP limits as follows:

Annual HSA contribution limitation. For calendar year 2021, the annual limitation on deductions for HSA contributions under § 223(b)(2)(A) for an individual with self-only coverage under a high deductible health plan is $3,600 (up from $3,550 in 2020), and the annual limitation on deductions for HSA contributions under § 223(b)(2)(B) for an individual with family coverage under a high deductible health plan is $7,200 (up from $7,100 in 2020).

High deductible health plans. For calendar year 2021, a “high deductible health plan” is defined under § 223(c)(2)(A) as a health plan with an annual deductible that is not less than $1,400 for self-only coverage or $2,800 for family coverage (unchanged from 2020), and with respect to which the annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) do not exceed $7,000 for self-only coverage or $14,000 for family coverage (up from $6,900 and $13,800 in 2020).

Rev. Proc 2020-32

DOL Final Rule Facilitates Retirement Plan Electronic Disclosures

The U.S. Department of Labor (DOL) published a final rule on May 27, 2020 that will allow employers to post retirement plan disclosures online or deliver them to employees by email, as a default. The DOL believes this will make it easier for employers to furnish retirement plan disclosures electronically, reducing administrative expenses and making disclosures more readily accessible and useful for employees.

Background

There are approximately 700,000 retirement plans covered by ERISA, covering approximately 137 million participants. ERISA-covered retirement plans must furnish multiple disclosures each year to participants and beneficiaries. The number of disclosures per year depends on the specific type of retirement plan, its features, and for defined benefit plans, the plan’s funding status.

Delivery methods for ERISA disclosures must be reasonably calculated to ensure that workers actually receive the disclosures. To deliver disclosures electronically, plan administrators previously had to rely on a regulatory safe harbor established by the DOL in 2002. See 29 CFR 2520.104b-1(c).

On August 31, 2018, the President issued Executive Order 13847, directing the DOL to review whether regulatory or other actions could be taken to make retirement plan disclosures more understandable and useful for participants and beneficiaries and to focus on reducing the costs and burdens that retirement plan disclosures impose on employers and others responsible for their production and distribution. The Order specifically emphasized that this review include an exploration of the potential for broader use of electronic delivery as a way to improve the effectiveness of the disclosures and to reduce their associated costs and burdens.

New Voluntary Safe Harbor

The new electronic disclosure rule establishes a new, voluntary safe harbor for retirement plan administrators who want to use electronic media, as a default, to furnish covered documents to covered individuals, rather than sending potentially large volumes of paper documents through the mail. The new safe harbor permits the following two optional methods for electronic delivery:

  1. Website Posting. Plan administrators may post covered documents on a website if appropriate notification of internet availability is furnished to the electronic addresses of covered individuals.
  2. Email Delivery. Alternatively, plan administrators may send covered documents directly to the electronic addresses of covered individuals, with the covered documents either in the body of the email or as an attachment to the email.

Retirement plan administrators who comply with the safe harbor will satisfy their statutory duty under ERISA to furnish covered documents to covered individuals. The safe harbor is limited in the following respects:

Limited Scope of the New Safe Harbor

The safe harbor is limited to retirement plan disclosures.

A plan administrator may use this safe harbor only for “covered individuals.” To be a covered individual, the person must be entitled under ERISA to receive covered documents and must have a valid electronic address (e.g., email address or smart phone number).

The new safe harbor does not supersede the 2002 safe harbor; the 2002 safe harbor remains in place as another option for plan administrators.

Protections for Plan Participants

The new safe harbor includes a variety of protections for covered individuals, including:
1. Right to Paper. Covered individuals can request paper copies of specific documents, or globally opt out of electronic delivery entirely, at any time, free of charge.

2. Initial Notification. Covered individuals must be furnished an initial notification, on paper, that the way they currently receive retirement plan disclosures (e.g., paper delivery in the US mail) is changing. The notice must inform them of the new electronic delivery method, the electronic address that will be used, and the right to opt out if they prefer paper disclosures, among other things. The notice must be given to them before the plan may use the new safe harbor.

3. Notifications of Internet Availability. Covered individuals generally must be furnished a notice of internet availability (NOIA) each time a new covered document is made available for review on the internet website.

To avoid “notice overload,” the final rule permits an annual NOIA to include information about multiple covered documents, instead of multiple NOIAs throughout the year.

The NOIA must briefly describe or identify the covered document that is being posted online, include an address or hyperlink to the website, and inform the covered individual of the right to request paper copies or to opt out of electronic delivery altogether.

The NOIA must be concise, understandable, and contain only specified information.

4. Website Retention. Covered documents must remain on an internet website until superseded by a subsequent version, but in no event for less than one year.

5. System Check for Invalid Electronic Addresses. Plan administrators must ensure that the electronic delivery system is designed to alert them if a participant’s electronic address is invalid or inoperable. In that case, the administrator must attempt to promptly cure the problem, or treat the participant as opting out of electronic delivery.

6. System Check at Termination of Employment. When someone leaves their job, the plan administrator must take steps to ensure the continued accuracy and operability of the person’s employer-provided electronic address.

Effective Date & Immediate Availability

The new safe harbor is effective July 27, 2020 (60 days after its publication in the Federal Register). However, the DOL, as an enforcement policy, will not take any enforcement action against a plan administrator that relies on this safe harbor before that date.

DOL and IRS Extend Certain Timeframes for Employee Benefit Plans, Participants, and Beneficiaries Affected by the COVID-19 Outbreak

On May 4, 2020, the Employee Benefits Security Administration (EBSA, which is part of the U.S. Department of Labor) and the Internal Revenue Service (IRS) issued joint guidance extending certain timeframes otherwise applicable to group health plans, disability and other welfare plans, pension plans, and their participants and beneficiaries under ERISA and the Code.

This guidance will require Plan Sponsors to temporarily revise their administrative practices and their form notices used in connection with COBRA, HIPAA’s Special Enrollment rights, and ERISA Claim Procedures.

I. Background

HIPAA requires group health plans to provide special enrollment rights for certain people upon the loss of eligibility for other coverage, or upon the addition of a dependents due to birth, adoption, etc. Generally, group health plans must allow such individuals to enroll in the group health plan if they are otherwise eligible and if enrollment is requested within 30 days of the occurrence of the event.

COBRA permits qualified beneficiaries who lose coverage under a group health plan to elect continuation health coverage. COBRA generally provides a qualified beneficiary a period of at least 60 days to elect COBRA continuation coverage under a group health plan. Plans are required to allow payment of premiums in monthly installments, and plans cannot require payment of premiums before 45 days after the day of the initial COBRA election. COBRA continuation coverage may be terminated for failure to pay premiums timely.

Under the COBRA rules, a premium is considered paid timely if it is made not later than 30 days after the first day of the period for which payment is being made. Notice requirements prescribe time periods for employers to notify the plan of certain qualifying events and for individuals to notify the plan of certain qualifying events or a determination of disability. Notice requirements also prescribe a time period for plans to notify qualified beneficiaries of their rights to elect COBRA continuation coverage.

ERISA requires plans to establish and maintain reasonable claims procedures and imposes additional rights and obligations with respect to internal claims and appeals and external review for non-grandfathered group health plans.

II. Temporary Extensions Under the Guidance

All of the foregoing provisions include timing requirements for certain acts in connection with employee benefit plans, some of which have been temporarily modified by the new guidance. These changes, and the implications for Plan Sponsors, are summarized below.

A. Relief for Plan Participants, Beneficiaries, Qualified Beneficiaries, and Claimants

Subject to a one year statutory duration limitation, all group health plans, disability and other employee welfare benefit plans, and employee pension benefit plans subject to ERISA or the Code must disregard the period from March 1, 2020 until sixty (60) days after the announced end of the National Emergency (the “Outbreak Period”) for all plan participants, beneficiaries, qualified beneficiaries, or claimants wherever located in determining the following periods and dates—

(1) The 30-day period (or 60-day period, if applicable) to request special enrollment under ERISA section 701(f) and Code section 9801(f)

Implications for employers:

  • Work with your third-party administrator and insurance carriers to ensure the extended special enrollment period is implemented for the duration of the Outbreak Period, which could require retroactive coverage as far back as March 1.
  • Determine whether and how to communicate the extension to employees.

(2) The 60-day election period for COBRA continuation coverage under ERISA section 605 and Code section 4980B(f)(5)

(3) The date for making COBRA premium payments pursuant to ERISA section 602(2)(C) and (3) and Code section 4980B(f)(2)(B)(iii) and (C)

(4) The date for individuals to notify the plan of a qualifying event or determination of disability under ERISA section 606(a)(3) and Code section 4980B(f)(6)(C)

Implications for Employers:

  • This exacerbates the adverse selection issue inherent in COBRA because Plans may have to provide retroactive coverage for many months.
  • The problem is made worse by the fact that, even though qualified beneficiaries theoretically have to pay for the retroactive coverage, if they elect COBRA right after the qualifying event, they do not have to pay until after the Outbreak Period ends. This means a qualified beneficiary could elect COBRA and receive the coverage) and then subsequently decide not to pay for it. Plan Sponsors and insurers will then have the option of retroactively terminating the coverage and trying to adjust the claims already paid.
  • Work with your third-party administrator and insurance carriers to ensure they have implemented the extended COBRA periods.
  • Either temporarily revise your COBRA notices and forms or ensure a temporary cover is added to all COBRA communications as necessary to inform employees and qualified beneficiaries of the extended timeframes.

(5) The date within which individuals may file a benefit claim under the plan’s claims procedure pursuant to 29 CFR 2560.503-1

(6) The date within which claimants may file an appeal of an adverse benefit determination under the plan’s claims procedure pursuant to 29 CFR 2560.503-1(h)

Implications for Employers:

  • Work with your third-party administrator and insurance carriers to ensure they have implemented the extended claims periods.
  • Either temporarily revise your claims notices and forms or ensure a temporary cover is added to all claims communications as necessary to inform employees and qualified beneficiaries of the extended timeframes.
  • This will impact health flexible spending accounts (“FSAs”) and health reimbursement arrangements (“HRAs”) that have run-out periods that extended beyond March 1, 2020. Because the Outbreak Period began on March 1, 2020, any health FSAs and HRAs that have March or April deadlines for submitting prior-year expenses for reimbursement, will need to extend the deadline until 60 days after the Outbreak Period ends to submit expenses for reimbursement for the 2019 plan year.

(7) The date within which claimants may file a request for an external review after receipt of an adverse benefit determination or final internal adverse benefit determination pursuant to 29 CFR 2590.715-2719(d)(2)(i) and 26 CFR 54.9815-2719(d)(2)(i), and

(8) The date within which a claimant may file information to perfect a request for external review upon a finding that the request was not complete pursuant to 29 CFR 2590.715-2719(d)(2)(ii) and 26 CFR 54.9815-2719(d)(2)(ii)

Implications for employers:

  • Work with your third-party administrator and insurance carriers to ensure they have implemented the extended claim review periods.
  • Either temporarily revise your claims notices and forms or ensure a temporary cover is added to all claims communications as necessary to inform employees and qualified beneficiaries of the extended timeframes.

B. Relief for Group Health Plans

With respect to group health plans, and their sponsors and administrators, the Outbreak Period shall be disregarded when determining the date for providing a COBRA election notice under ERISA section 606(c) and Code section 4980B(f)(6)(D).

Implication for Employers:

  • Plan administrators are not required to provide the COBRA election notice during the Outbreak Period. As a practical matter, however, plan administrators likely will want to timely provide election notices to encourage qualified beneficiaries to timely elect and pay for COBRA coverage.

DOL Issues FFCRA Guidance on Stay-At-Home Orders, Relationship Necessary to Support Caring Leave, and Caring for Children Over 18

The Department of Labor has issued more Q&As providing helpful guidance on issues under the Families First Coronavirus Response Act leave programs. We now have answers to the questions below. Our comments on the implications of these answers are also provided.

Shelter-In-Place and Stay-At-Home Orders Qualify as “Quarantine or Isolation” Orders

Question: How do I know if I can receive paid sick leave for a Federal, State, or local quarantine or isolation order related to COVID-19?

Answer: For purposes of the FFCRA, a Federal, State, or local quarantine or isolation order includes quarantine or isolation orders, as well as shelter-in-place or stay-at-home orders, issued by any Federal, State, or local government authority that cause you to be unable to work (or to telework) even though your employer has work that you could perform but for the order. You may not take paid sick leave for this qualifying reason if your employer does not have work for you as a result of a shelter-in-place or a stay-at-home order.

Comments:

To the extent a stay-at-home order causes the employer not to have work for the employee, the employee cannot base a leave request on the employee’s inability to work or telework.

However, if the employer has work for the employee, and the proximate cause of the employee not being able to work is that the employee (or someone they need to care for) is subject to a stay-at-home order, then the employee can take paid leave under the FFCRA.

Caring for Others in Quarantine or Isolation Only Qualifies if the Employee’s Relationship Creates an Expectation that the Employee Would Care for the Individual, and the Individual is Unable to Care for Them Self

Question: When am I eligible for paid sick leave to care for someone who is subject to a quarantine or isolation order?

Answer: You may take paid sick leave to care for an individual who, as a result of being subject to a quarantine or isolation order, is unable to care for him or herself and depends on you for care and if providing care prevents you from working and from teleworking. Furthermore, you may only take paid sick leave to care for an individual who genuinely needs your care. Such an individual includes an immediate family member or someone who regularly resides in your home. You may also take paid sick leave to care for someone if your relationship creates an expectation that you would care for the person in a quarantine or self-quarantine situation, and that individual depends on you for care during the quarantine or self-quarantine.You may not take paid sick leave to care for someone with whom you have no relationship. Nor can you take paid sick leave to care for someone who does not expect or depend on your care during his or her quarantine or self-quarantine.

Question: Can I take paid sick leave to care for any individual who is subject to a quarantine or isolation order or who has been advised to self-quarantine?

Answer: No. You may take paid sick leave under the FFCRA to care for an immediate family member or someone who regularly resides in your home. You may also take paid sick leave under the FFCRA to care for someone where your relationship creates an expectation that you care for the person in a quarantine or self-quarantine situation, and that individual depends on you for care during the quarantine or self-quarantine.

However, you may not take paid sick leave under the FFCRA to care for someone with whom you have no relationship. Nor can you take paid sick leave under the FFCRA to care for someone who does not expect or depend on your care during his or her quarantine or self-quarantine due to COVID-19.

Comment: employers are permitted to ask what the employee’s relationship is with the person they need to care for due to quarantine or isolation. Presumably, employers could inquire further if (i) the relationship provided is not obviously one that creates an expectation that the employee will care for the person in quarantine or isolation, and (ii) that individual depends on the employee for care during the quarantine or isolation.

Caring for a Child Over 18 Due to a School or Place of Care Closure only Qualifies if the Child is Disabled and Cannot Care for Themselves

Question: May I take paid sick leave or expanded family and medical leave to care for my child who is 18 years old or older?

Answer: It depends. Under the FFCRA, paid sick leave and expanded family and medical leave include leave to care for one (or more) of your children when his or her school or place of care is closed or child care provider is unavailable, due to COVID-19 related reasons. This leave may only be taken to care for your non-disabled child if he or she is under the age of 18. If your child is 18 years of age or older with a disability and cannot care for him or herself due to that disability, you may take paid sick leave and expanded family and medical leave to care for him or her if his or her school or place of care is closed or his or her child care provider is unavailable, due to COVID-19 related reasons, and you are unable to work or telework as a result.

In addition, paid sick leave is available to care for an individual who is subject to a Federal, State, or local quarantine or isolation order related to COVID-19 or has been advised by a health care provider to self-quarantine due to concerns related to COVID-19. If you have a need to care for your child age 18 or older who needs care for these circumstances, you may take paid sick leave if you are unable to work or telework as a result of providing care. But in no event may your total paid sick leave exceed two weeks.

Comment: Presumably, if an employee asks for paid FFCRA leave to care for a child over 18, and does not allude to the child being disabled, the employer could ask for an explanation as to why it is necessary to care for the child. Generally, employers will not ask for a detailed explanation, such as the nature and extent of the child’s disability, or any other documentation of the disability.

Employee Self-Diagnosis Does Not Qualify

Question: I am an employee. I become ill with COVID-19 symptoms, decide to quarantine myself for two weeks, and then return to work. I do not seek a medical diagnosis or the advice of a health care provider. Can I get paid for those two weeks under the FFCRA?

Answer: Generally no. If you become ill with COVID-19 symptoms, you may take paid sick leave under the FFCRA only to seek a medical diagnosis or if a health care provider otherwise advises you to self-quarantine. If you test positive for the virus associated with COVID-19 or are advised by a health care provider to self-quarantine, you may continue to take paid sick leave. You may not take paid sick leave under the FFCRA if you unilaterally decide to self-quarantine for an illness without medical advice, even if you have COVID-19 symptoms. Note that you may not take paid sick leave under the FFCRA if you become ill with an illness not related to COVID-19. Depending on your employer’s expectations and your condition, however, you may be able to telework during your period of quarantine.

Comment: This is not very helpful as a practical matter, because the DOL Rules do not permit employers to ask for any documentation when an employee asks for leave on the grounds that the employee is experiencing COVID-19 symptoms and is seeking a medical diagnosis. Perhaps the DOL will change its mind on this.

Guide to Employer Tax Credits Under the Families First Coronavirus Response Act – Webinar

ERISA Attorney Erwin Kratz of ERISA Benefits Law, PLLC discusses the steps private businesses with less than 500 Employees need to take to document and claim refundable tax credits that reimburse them, dollar-for-dollar, for the cost of providing paid sick and family leave wages to their employees for leave under the Families First Coronavirus Response Act.

ERISA Benefits Law Model Paid Sick Leave and Expanded FMLA Leave Policies, Leave Request and Leave Determination Forms Available March 28, 2020