PPI Benefit Solutions

COVID-19 Update

Updated September 25, 2020: Benefits Compliance COVID-19 FAQ
Updated October 1, 2020: COVID-19 State Quick Reference Chart

Healthcare Reform

Once Again, IRS Extends ACA Reporting Deadlines and Offers Penalty Relief

On October 2, 2020, the IRS released Notice 2020-76 , extending the deadlines for distributing ACA reporting forms to individuals.

As background, the ACA imposes two reporting requirements under Sections 6055 and 6056. Section 6055 requires entities that provide minimum essential coverage to report to the IRS and to covered individuals the months in which the individuals were covered. Section 6056 requires applicable large employers (under the employer mandate) to report to the IRS and full-time employees whether they offered minimum essential coverage that was affordable and minimum value.

This relief is consistent with that offered in previous years. As the IRS has done for the previous reporting years, the date by which employers must distribute Forms 1095-B or 1095-C to individuals has been extended. 2020 forms must now be distributed to individuals by March 2, 2021 (instead of January 31, 2021). Even though this extension is provided, employers are encouraged to furnish the 2020 statements as soon as they are able. Further, as in prior years, this notice does not extend the date by which employers must file Forms 1094-B/C and 1095-B/C with the IRS. That said, reporting entities must still file Forms 1094-B/C and 1095-B/C with the IRS by March 1, 2021 (as February 28, 2021, falls on a Sunday) if filing by paper, and March 31, 2021, if filing electronically.

Despite this relief, the IRS may still seek penalties on employers who fail to comply with the deadlines. The IRS also indicates that employers can no longer request an automatic extension of the due date by which they must distribute the forms to individuals, as the extension they have provided is just as generous. In fact, the IRS will not respond to any such request for an extension. Employers may still request an automatic extension to file the Forms 1094-B/C and 1095-B/C with the IRS, as long as they submit a Form 8809 on or before the due date of those filings.

The IRS also continues to recognize good faith efforts made by employers that file the 2020 forms. Specifically, employers that timely file and distribute their required Forms 1094-B/C and 1095-B/C will not be subject to penalties if the information is incorrect or incomplete. In determining what constitutes a good faith effort, the IRS will take into account whether an employer or other coverage provider made reasonable efforts to prepare for reporting, such as gathering and transmitting the necessary data to a reporting service provider or testing its ability to use the ACA Information Return Program electronic submission process.

Since the intention of this good faith relief was to be transitional relief, the IRS states that this is the last year they intend to provide such relief. Note that this relief does not apply to a failure to timely furnish or file a statement or return, and it does not extend to employer mandate penalties (for large employers that did not offer affordable, minimum value coverage to full-time employees pursuant to the ACA’s employer mandate).

Notably, similar to last year, this notice also provides penalty relief for employers which will allow them to forego distributing the Form 1095-B to individuals. As a reminder, this resulted from the IRS accepting comments on the necessity of the Form 1095-B now that the individual mandate penalty has been zeroed out. So, as long as employers post a notice on their website that the document is available upon request, and then fulfill any such request within 30 days, they can choose not to distribute the Forms 1095-B to covered individuals.

However, employers should note that the penalty relief pertaining to the Form 1095-B is not available for Form 1095-C, but can be applied to employees who are not full-time and only receive a Form 1095-C to meet the Form 1095-B reporting requirement. In other words, those employees who are only receiving a Form 1095-C because the employer uses Part III to comply with Section 6055 no longer have to be provided a Form 1095-C. (Self-insured applicable large employers must still provide and file Form 1095-C to full-time employees and complete Part III of the Form, indicating the covered spouses and dependents of the full-time employees.)

Although the IRS provided similar relief in the past, the agency explains that unless they receive comments to explain why relief related to furnishing statements under Sections 6055 and 6056 continues to be necessary, no relief will be granted in future years. Comments must be submitted by February 1, 2021 ( Notice 2020-76 provides instructions on how to do so).

Employers should keep this guidance in mind as they are preparing their ACA filings and distributions for 2020.

IRS Notice 2020-76 »

IRS Releases Publication 5164, Test Package for 2020 Electronic ACA Filers

The IRS recently released an updated version of Publication 5164, entitled “Test Package for Electronic Filers of Affordable Care Act (ACA) Information Returns (AIR),” for tax year 2020 (processing year 2021). The publication describes the testing procedures that must be completed by those filing electronic ACA returns with the IRS, specifically Forms 1094-B, 1095-B, 1094-C and 1095-C. As a reminder, those who are filing 250 or more forms are required to file electronically with the IRS.

Importantly, the testing procedures apply to the entity that will be transmitting the electronic files to the IRS. Thus, only employers who are filing electronically with the IRS on their own would need to complete the testing. If an employer has contracted with a software vendor who’s filing on behalf of the employer, then the testing and this publication would not be utilized by the employer, but the software vendor instead.

The IRS provides scenarios for each form type (see pages 12-13) for reporting year 2020. Each scenario contains all the information needed to prepare the XML. The scenarios test the functionality of the business rules and each test submission must match the scenarios exactly to pass tests. Correction scenarios are also provided (see pages 15-16), but those are not required in order to pass testing.

As a reminder, electronic filing of 2020 returns will be due March 31, 2021. Employers that are filing on their own will need to review the updated testing requirements in Publication 5164.

IRS Publication 5164 »
AIR Program »

Federal Updates

Tenth Circuit: Employer’s Discretionary Authority Must be Communicated to Plan Participants

On July 24, 2020, in Lyn M v. Premera Blue Cross, et al ., the US Court of Appeals for the Tenth Circuit (the “Tenth Circuit”) ruled that an ERISA group health plan administrator was not entitled to a discretionary standard of review because this standard was not adequately disclosed to plan participants. The Tenth Circuit further held that the plan administrator had failed to refer to the applicable medical policy when evaluating the appealed medical claim at issue.

As background, an ERISA plan’s benefit determinations are entitled to a favorable standard of review, known as the arbitrary and capricious standard, if there is language in the plan document granting the plan administrator discretion to interpret the plan and make benefit determinations. This standard involves a more limited judicial review of participant challenges to plan benefit determinations and often results in the disposal of cases at an early stage in the legal process. Absent such language in the plan document, de novo review applies, and the trial court would typically conduct a more independent and thorough review of a participant’s claim.

In Premera , parents sought medical benefits under the Microsoft Corporation Welfare Plan for their minor child’s psychiatric treatment. The claims administrator, Premera, denied the claim and subsequent appeal as not medically necessary based upon the definition of “medical necessity” in the SPD, rather than the more comprehensive definition in the medical policy.

The district court reviewed Premera’s denial of the appealed claim under the arbitrary and capricious standard because the plan language gave the claims administrator discretionary authority to interpret and administer the plan. Under this standard, the court deferred to the administrator's determination that the disputed services were not medically necessary, and ruled in favor of Premera and the plan fiduciary, Microsoft Corporation.

On appeal, the Tenth Circuit reversed the district court decision and held that the discretionary standard of review was not applicable because participants had not been notified of this more limited scope of judicial review of their claims. In other words, the plan administrator had not specifically disclosed its discretionary authority in the SPD or other distributed materials or the existence of a document with information about such discretionary authority. Additionally, the Tenth Circuit found that Premera erred in failing to consider the definition of medical necessity in the medical policy.

Accordingly, the case was returned to the district court for review of the claim under the de novo standard of review, thus allowing for a broader judicial analysis of the evidence without deference to the plan administrator’s benefit determinations.

ERISA plan sponsors, particularly those within the Tenth Circuit’s jurisdiction, should be aware of this development. The Tenth Circuit includes districts in Colorado, Kansas, New Mexico, Oklahoma, Utah and Wyoming. Sponsors seeking to benefit from the application of the discretionary standard of review in the event of litigation should consider referencing this standard in the SPD in addition to the plan document. Furthermore, employers should recognize their obligation as plan fiduciaries to oversee claims administrators and ensure their claim review processes and communications adhere to ERISA requirements and the specific plan terms. Plan document providers and/or counsel should be consulted for further assistance.

Lyn M v. Premera Blue Cross, et al.

Retirement Update

IRS Publishes 2020 Form 4972, Tax on Lump-Sum Distributions

The IRS has published the 2020 version of Form 4972, which is used by participants born before January 2, 1936, and who received a lump-sum distribution from a qualified plan in 2020. The form assists participants in calculating the tax owed on a distribution using the 20% capital gain election, the 10-year tax option or both. These are special formulas used to determine a separate tax on the distribution that may result in a smaller tax than if the amount is reported as ordinary income.

Participants should consult with their accountant for guidance.

IRS Form 4972 »

Announcements

It’s MLR Rebate Time Again!

The ACA requires insurers to submit an annual report to HHS accounting for plan costs. If the insurer does not meet the medical loss ratio standards, they must provide rebates to policyholders. Rebates must be distributed to employer plan sponsors between August 1, 2020, and September 30, 2020. Employers should keep in mind that if they receive a rebate, there are strict guidelines as to how the rebate may be used or distributed.

For more information, download Medical Loss Ratio Rebates: A Guide for Employers.

Final Reminder: Medicare Part D Notice to Employees Deadline Is October 14, 2020

Employers must notify individuals who are eligible to participate in their medical plan whether the plan’s prescription drug coverage is “creditable” or “non-creditable” as compared to Medicare Part D coverage.

As a reminder, the Medicare Part D notice of creditable coverage should be distributed to employees by October 14, 2020. This notice serves to inform Medicare-eligible individuals of whether or not their employer group coverage is creditable. That information is necessary to help such individuals avoid paying higher premiums (also known as late enrollment penalties) for Medicare Part D coverage.

Employers should consult with their service providers to determine whether their coverage is creditable using either the simplified determination method or an actuarial analysis. Also keep in mind that CMS provides a model notice for employers.

FAQ

FAQ: Our insurance carrier has agreed to extend our coverage period for an additional two months. What are the compliance implications of a 14-month plan year?

Although insurance carriers are often willing to extend the insurance contract beyond 12 months, employers must consider what that will mean for the plan’s compliance. Specifically, the employer will have to consider what will need to be done to avoid violating the Section 125/Cafeteria plan rules, ERISA and the ACA.

Section 125/Cafeteria Plan
If employees are able to contribute towards their premiums on a pre-tax basis, then the plan is a Section 125/cafeteria plan. The Section 125 rules require employees to have the option to prospectively elect coverage for the “coverage period” (also called the “plan year”). The related rules state that a “plan year” must be 12 consecutive months, although there is an exception for a shorter plan year (if it's justified by a business purpose).

The plan year can begin on any day of any calendar month and must end on the preceding day in the immediately following year. So, if the employer has a cafeteria plan, the employer must allow employees to change their elections at the end of the plan year (i.e., prospectively elect or not elect coverage for the following plan year). This would mean that the employees would have to be given a chance to change their elections no later than 12 months after their last election.

ERISA
Similarly, under ERISA, a plan year can be no longer than 12 months. The plan year must be identified in the SPD and the Form 5500 filing is based on a 12-month plan year (unless there is a shorter plan year).

The Form 5500 filing instructions make this clear when they mention that:

All required forms, schedules, statements, and attachments must be filed by the last day of the 7th calendar month after the end of the plan or GIA year (not to exceed 12 months in length)…

Thus, the Form 5500 filing would need to be completed for a 12 month period and could not be done for a 14-month period. Instead, the employer would likely have a 12-month ERISA plan year that would be followed by a two-month short plan year (or vice versa depending on the particular situation).

ACA
Employers with more than 50 employees are likely applicable large employers (ALEs) subject to the ACA’s employer mandate. Generally, an employer is an “applicable large employer” for a calendar year if it employed an average of at least 50 full-time employees on business days during the preceding calendar year. To comply with the employer mandate, a large employer must offer full-time employees minimum value, affordable coverage.

An employer makes an offer of coverage to an employee if it provides the employee an effective opportunity to enroll in the health coverage (or to decline that coverage) at least once each plan year. Treasury Regulation 54.4980H-4(b)(1) states:

An applicable large employer member will not be treated as having made an offer of coverage to a full-time employee for a plan year if the employee does not have an effective opportunity to elect to enroll in the coverage at least once with respect to the plan year.

As mentioned with the laws above, a plan year can be no more than 12 months. So, if a previously waived employee, who has not experienced a qualified event, is not given an annual opportunity to enroll in coverage — the employer will be considered to have failed to make an offer of coverage to the employee under the employer mandate and the employer would be at risk for a penalty.

Summary
The employer mandate requires an offer of coverage to be made at least annually, ERISA requires a plan year of no more than 12 months, and IRC Section 125 requires employees to have the option to make a prospective election for each coverage period (12 months). So even if the carrier is willing to extend the renewal date/contract “year,” the employer will likely need to host an additional open enrollment opportunity for the short plan year.

State Updates

California

October 13, 2020

Self-Insured Employer Reporting

California’s Individual Shared Responsibility requirement (individual mandate) went into effect this year. Effective January 1, 2020, residents are required to maintain minimum essential health coverage or otherwise be subject to a tax penalty. To assist in the administration of the mandate, self-insured employers are required to comply with certain reporting requirements. They will complete the reporting by submitting copies of the completed Form 1095-Cs for covered California residents.

The California Franchise Tax Board recently released the Draft Publication 3895C. The Forms 1095-C will be due to California residents by January 31, 2021. The forms will need to be filed with the CA FTB by March 31, 2021, with a two-month extension available through May 31, 2021. If filing 250 or more forms with the CA FTB, they must be filed electronically.

This requirement will apply to any self-insured plan covering a California resident.

Draft Publication »

Expanded Coverage for Mental Health and Substance Use Disorders

On September 25, 2020, Gov. Newsom signed SB 855 into law. The new law requires group medical insurance policies issued or renewed on or after January 1, 2021, to provide coverage for medically necessary treatment of mental health and substance use disorders. Existing state law only requires coverage for a list of nine severe mental illnesses. Plans will now be required to provide coverage for a mental health condition or substance use disorder that falls under any of the diagnostic categories listed in the mental and behavioral disorders chapter of the most recent edition of the International Classification of Diseases or that is listed in the most recent version of the Diagnostic and Statistical Manual of Mental Disorders.

Medically necessary is defined as a service or product addressing the specific needs of that patient, for the purpose of preventing, diagnosing or treating an illness, injury, condition or its symptoms. This includes minimizing the progression of that illness, injury, condition or its symptoms in a manner that is in accordance with the generally accepted standards of mental health and substance use disorder care; clinically appropriate in terms of type, frequency, extent, site and duration; and not primarily for the economic benefit of the healthcare service plan and subscribers or for the convenience of the patient, treating physician or other healthcare provider.

Coverage and benefits cannot be limited to short-term or acute treatment. It must include basic health services, intermediate services (such as residential, partial hospitalization and intensive outpatient treatment) and prescription drugs. Benefits must be equal to all other benefits provided under the policy in terms of maximum annual and lifetime benefits, copayments, deductibles, coinsurance and out-of-pocket maximums.

If services for the medically necessary treatment of a mental health or substance use disorder are not available in network within the geographic and timely access standards, the plan must arrange coverage for out-of-network services. The participant must not be required to pay more than the same cost sharing that they would have paid for the same covered services received from an in-network provider.

SB 855 »

CFRA Leave Requirements Expanded to Include Small Employers

On September 17, 2020, Gov. Newsom signed SB 1383 into law, requiring small employers to provide unpaid leave to eligible employees. As background, the California Family Rights Act currently requires employers with 50 or more employees to provide up to 12 weeks unpaid leave to eligible employees due to their own serious health condition, caring for a family member who is seriously ill, or to bond with a new child. Employees are eligible if they have worked for the employer for at least 12 months and at least 1,250 hours in the last 12 months.

The new law, effective January 1, 2021, will apply to employers with five or more employees. It adds a military exigency related to a family member’s active duty to the list of qualifying reasons for leave. Further, the term “family member” is expanded to include grandparents, grandchildren, siblings and children of any age. The previous definition only included children under the age of 18, domestic partner, spouse and parent.

Also, spouses who work for the same employer are now both entitled to up to 12 weeks of leave to bond with a new child rather than having to share the 12 weeks between them.

It’s important to understand that CFRA does not run concurrently with federal FMLA or California Pregnancy Disability Leave when leave is taken due to a disability related to pregnancy or delivery.

We expect further guidance and a revised poster. All applicable employers should begin revising their policies in preparation for the fast approaching effective date.

SB 1383 »

Colorado

October 13, 2020

Statute Imposes Fee on Insurers

On June 20, 2020, Gov. Polis signed SB20-215 into law. This statute imposes a health insurance affordability fee on health insurers that offer plans in the state in order to:

Provide services to increase enrollment in health benefit plans offered by carriers across the state
Increase the number of individuals who are able to purchase health benefit plans in the individual market by providing financial support for certain qualifying individuals
Fund the reinsurance program that offsets the costs carriers would otherwise pay for covering consumers with high medical costs
Improve the stability of the market throughout the state by providing consistent private healthcare coverage and reducing the movement of individuals from insured to uninsured status
Reduce provider cost shifting from the individual market and the uninsured to the group market
Create a healthier risk pool for all carriers by establishing a path for consistent coverage for individuals

The statute creates a health insurance affordability enterprise that will provide these services, as well as assess and collect the fee, starting in 2021. The fee is based on a percentage of premiums collected by health insurers in the previous calendar year on health benefit plans issued in the state, and serves to replace the ACA’s HIT tax (which is set to expire at the end of this year). The enterprise will also assess and collect a fee from hospitals and provide similar services to them.

Although this statute affects carriers regulated by the state, employers should be aware of these developments as these costs may be passed down to them in the form of increased premiums.

SB20-215 »

Florida

October 13, 2020

Air Ambulance Coverage Required

On September 18, 2020, Gov. DeSantis signed HB 747 into law. Effective immediately, the new law requires health insurance policies to provide reasonable reimbursement for air ambulance services. An air ambulance is defined as any fixed-wing or rotary-wing aircraft used for, or intended to be used for, air transportation of sick or injured persons requiring or likely to require medical attention during transport — including both covered nonemergency and emergency services. The participant shall only be required to pay any copayments, coinsurance or deductibles applicable under the policy.

Although this requirement applies to insurers, employers should be aware of this change in insurance mandates.

HB 747 »

Michigan

October 13, 2020

Extended Special Enrollment Periods

On September 15, 2020, Michigan’s Department of Insurance and Financial Services (DIFS) advised that extended enrollment periods are available to help Michiganders take advantage of low or no-cost healthcare coverage through the Marketplace.

As background, special enrollment periods (SEP) allow people to enroll in Marketplace coverage outside of the annual enrollment period. Generally, individuals have 60-days prior to the loss of coverage and 60-days after the coverage ends to purchase coverage via the Marketplace when a qualifying life event occurs. Now, people who lost health coverage after January 1, 2020, and were eligible for another SEP but failed to obtain Marketplace coverage due to impacts of the public health emergency, have extra time to enroll in health coverage. This is due to the newly implemented FEMA SEP, which will last until 60 days after the end of the disaster declaration. Despite this FEMA SEP, Michiganders who have lost their health insurance are urged not to delay in enrolling in healthcare coverage.

While this guidance does not impact group health plans, employers should be aware of this information.

Press Release »
FEMA SEP Fact Sheet »

Governor’s COVID-19 Executive Orders Overturned by Supreme Court

On October 2, 2020, the Michigan Supreme Court held that Gov. Whitmer did not have the authority after April 30, 2020, to issue or renew any executive orders related to COVID-19. Despite the court’s decision, all bulletins, orders or other guidance issued by the Department of Insurance and Financial Services (DIFS) remain in effect, as clarified in Bulletin 2020-38 and explained further below.

As background, Gov. Whitmer utilized authority to issue executive orders under the Emergency Powers of the Governor Act of 1945 (EPGA) and the Emergency Management Act of 1975 (EMA). While EMA permits a governor to declare a state of emergency, it requires legislative approval in order for such state of emergency to continue past 28 days. Because the legislature did not approve the state of emergency after April 30, 2020, the EPGA has been Gov. Whitmer’s source of authority since then.

After a group of healthcare providers challenged Gov. Whitmer’s authority to issue these executive orders, the court ruled in Midwest Institute of Health, PLLC v Governor of Michigan (In re Certified Questions from the United States District Court) that EPGA violates the Michigan constitution because it delegates legislative authority to the executive branch and as such, the EPGA cannot continue to allow Gov. Whitmer to exercise emergency powers.

Importantly, because the court’s opinion does not become effective until 21 days (at minimum) after the decision, Gov. Whitmer’s executive orders remain effective for now. Executive orders issued after April 30 are being examined to determine how this court decision will impact such orders. This includes, for example, Executive Order 2020-104, which expanded access to COVID-19 testing (as discussed in the June 11, 2020 edition of Compliance Corner); and Executive Order 2020-172, which limits COVID-19 leave protection (as discussed in the October 1, 2020 edition of Compliance Corner). The impact this court decision has on such orders is yet to be determined.

For the time being, all bulletins, orders or other guidance issued by DIFS remain in effect. We will continue to monitor and communicate any updates accordingly.

Midwest Institute of Health, PLLC v. Governor of Michigan (In re Certified Questions from the United States District Court) »
Bulletin 2020-38 »

New Jersey

October 13, 2020

Pregnancy Creates Exchange Special Enrollment Period

On October 9, 2020, Commissioner Caride released Bulletin No. 20-35, providing a special enrollment period on the state exchange for individuals that become pregnant. As background, individuals may only elect coverage through the state exchange (Get Covered New Jersey) during open enrollment or special enrollment periods.

New Jersey is now choosing to allow for a special enrollment period if an individual is pregnant, as confirmed by a healthcare provider. Coverage elected pursuant to this special enrollment period will be effective as of the first of the month in which the individual receives confirmation of the pregnancy or the first of the month following the date the individual makes a plan selection.

Although this change affects the individual market, employers should keep this in mind as it would likely create a qualifying event that would allow for an employee to potentially drop employer coverage (for themselves or their dependents) to go on the New Jersey exchange.

Bulletin No. 20-35 »

New York

October 13, 2020

NYC Earned Safer and Sick Leave Law Amended

On September 28, 2020, the New York City council passed amendments to the Earned Safe and Sick Leave Law (ESSL). The amendments coordinate the ESSL obligations with the New York Paid Sick Leave Law (NYPSL), which became effective on September 30, 2020. However, the amendments also impose new requirements under the ESSL.

As background, the ESSL took effect April 1, 2014, and was amended in 2018 to provide coverage for safe leave in addition to sick leave. As a result of the most recent amendments, the ESSL benefits are further expanded to align with the NYPSL.

Effective January 1, 2021, New York City employers with fewer than five employees and a net income of $1 million or more in the previous tax year must provide paid safe/sick leave (as opposed to the prior unpaid leave). Additionally, large employers with 100 or more employers must provide 56 hours of sick/safe leave (which is an increase from the previous requirement of 40 hours), to be accrued at a rate of one hour for every 30 hours worked. Prospectively, any changes to the NYPSL that are more generous than the ESSL will automatically be incorporated into the ESSL by reference.

Additionally, the ESSL expands eligibility by eliminating the requirement that an employee must work more than 80 hours per year in New York City to be covered. Furthermore, employers must reimburse employees for documentation costs (e.g., healthcare provider confirmation) in the event that an employee is absent from work for more than three consecutive days.

Notice requirements also apply. Specifically, an employee’s paystub (or separate document provided each pay period) will need to reflect the safe/sick time accrued and used during the pay period and the total balance of accrued leave time. New York City employers must also post a notice of rights under the ESSL in the worksite and distribute an updated notice to current employees by October 30, 2020, and to new employees upon hire. The ESSL’s anti-retaliation protections are strengthened and New York City’s investigative and enforcement powers are expanded.

New York City employers should be aware of the recently amended ESSL provisions and update their sick leave policies accordingly. Affected employers should also work with payroll providers to ensure the safe/sick leave accrual, usage and total balance are included on employee paystubs. If documentation is required for leave periods exceeding several days, employers must be prepared to reimburse employees for the costs they incurred to obtain such documents. Counsel should be consulted for further guidance.

ESSL amendments »

Oklahoma

October 13, 2020

Executive Order Encourages Telemedicine

On August 28, 2020, Gov. Stitt issued the Fourth Amended Executive Order 2020-20. This order extends the state of emergency effective for all 77 counties in the state for 30 days from the date of issuance. The order, among other things, encourages the use of telemedicine by allowing its use with non-established patients for the purpose of the COVID-19 response. In addition to this expansion, the order limits the application of the pre-existing relationship requirement for telemedicine under statute only to the prescription of opiates and other dangerous controlled substances.

Employers with plans that cover telemedicine services should be aware of this development for employees in the state.

Fourth Amended Executive Order 2020-20 »

Pennsylvania

October 13, 2020

Philadelphia Public Health Emergency Leave

On September 17, 2020, the Philadelphia Public Health Emergency Leave (Bill No. 200303) became law immediately and remains in effect until December 31, 2020. The new law provides paid leave to workers who are not otherwise covered by FFCRA including those employed by employees with 500 or more employees, those considered independent contractors, gig workers (such as food delivery drivers) and home healthcare workers.

The reasons for leave are similar to those under FFCRA:

The worker or family member is experiencing COVID-19 symptoms.
The worker or family member has been advised by a healthcare provider to quarantine.
The worker is needed to care for a child whose child care provider or school is closed due to COVID-19.

The maximum amount of leave is 112 hours, which is only available to full-time employees (defined as those working 40 hours per week). Part-time employees would receive a prorated amount of paid leave. If a worker’s hours vary and a full-time versus part-time status cannot be determined, the employer should average the worker’s hours over the 6-month period prior to the leave request.

The worker would receive compensation equal to the normal rate of pay at the time leave is taken. There are special rules for tipped employees who earn less than $7.25 per hour.

Employers are required to post a notice, available below. An employer who has an existing paid leave policy that provides the same amount of leave to the same eligible workers for the same qualifying reasons would satisfy the requirement. Employers should review their leave policies and make any necessary adjustments as soon as possible.

Bill No. 200303 »
Poster »

Philadelphia Leave & Benefits for Pooled and Healthcare Workers

Bill No. 200306 was signed into law on September 9, 2020, with no sunset date included. While the new law is applicable to the current COVID-19 pandemic, it is an ongoing requirement for employers beyond 2020. Employers who employ healthcare providers performing work in Philadelphia must pay lost wages and healthcare expenses for those who contract a communicable disease during a pandemic declared by the World Health Organization (including COVID-19). Alternatively, the employer may offer to treat the employee in its own healthcare facility at no cost to the employee. There is no provision addressing whether the worker may decline the employer’s treatment offer in favor of an outside treatment facility.

A healthcare provider for this purpose includes:

Workers who have worked for the employer at least 40 hours in the last three months regardless of FT, PT or PRN classification
Doctors, nurses, ER personnel and others licensed to provide services
Hospital, nursing home and home health settings

Healthcare employers should review their internal policies and make any necessary adjustments as soon as possible.

Ordinance »

This material was created by PPI Benefit Solutions to provide accurate and reliable information on the subjects covered but should not be regarded as a complete analysis of these subjects. It is not intended to provide specific legal, tax or other professional advice. The service of an appropriate professional should be sought regarding your individual situation. PPI does not offer tax or legal advice. "PPI^®" is a service mark of Professional Pensions, Inc., a subsidiary of NFP Corp. (NFP). All rights reserved.

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COVID-19 Update

Healthcare Reform

Once Again, IRS Extends ACA Reporting Deadlines and Offers Penalty Relief

IRS Releases Publication 5164, Test Package for 2020 Electronic ACA Filers

Federal Updates

Tenth Circuit: Employer’s Discretionary Authority Must be Communicated to Plan Participants

Retirement Update

IRS Publishes 2020 Form 4972, Tax on Lump-Sum Distributions

Announcements

It’s MLR Rebate Time Again!

Final Reminder: Medicare Part D Notice to Employees Deadline Is October 14, 2020

FAQ

FAQ: Our insurance carrier has agreed to extend our coverage period for an additional two months. What are the compliance implications of a 14-month plan year?

State Updates

California

October 13, 2020

Colorado

October 13, 2020

Florida

October 13, 2020

Michigan

October 13, 2020

New Jersey

October 13, 2020

New York

October 13, 2020

Oklahoma

October 13, 2020

Pennsylvania

October 13, 2020

FAQ

PPI in the News Compliance Corner - October 15, 2020 Archive
You are here: Home / PPI in the News / Compliance Corner - October 15, 2020 Archive