The IRS has extended the last day of the Initial Remedial Amendment Period for Section 403(b) plans from March 31, 2020 to June 30, 2020. As described in our earlier LawFlash, the Initial Remedial Amendment Period permits employers to correct form defects in their plan documents retroactive to as far back as January 1, 2010. The IRS determined that under the current circumstances, it was appropriate to extend the deadline given the current strains on tax-exempt employers.
As the effects of the coronavirus (COVID-19) pandemic hit the United States, downsizings and shutdowns are spreading indiscriminately throughout the economy. Employers who are complying with “shelter in place” regulations and attempting to mitigate these extraordinary economic challenges with layoffs should keep in mind that such unprecedented actions may still involve complying with routine regulatory obligations.
UPDATED March 26, 2020
The following states have been declared major disaster areas and, where indicated, are eligible for the Federal Emergency Management Agency’s (FEMA’s) Crisis Counseling Program, which FEMA identifies as a form of individual assistance:
|
Major Disaster Area
|
Date Declared
|
Incident Period
|
Crisis Counseling Program or other Individual Assistance
|
|
|
March 20, 2020
|
January 20, 2020, and continuing
|
|
|
|
March 22, 2020
|
January 20, 2020, and continuing
|
|
|
|
March 22, 2020
|
January 20, 2020, and continuing
|
|
|
|
March 23, 2020
|
March 21, 2020, and continuing
|
|
|
|
March 24, 2020
|
January 20, 2020, and continuing
|
|
* Unlike the announcements regarding the other states identified in this chart, FEMA's announcement of Iowa as a major disaster area did not include any reference to the Crisis Counseling Program or other individual assistance being available at this time. However, this does not preclude FEMA from identifying individual assistance that is available in Iowa at a later date.
Recognizing that our employee benefits clients often need an extra pair of hands-either because of a benefits staff shortage, a labor-intensive project, or for other reasons–we are pleased to announce our ML BeneHelp program. Through ML BeneHelp, our senior benefits advisors are available for in-person or virtual temporary assignment to assist during crunch time. Please see our announcement to learn more about this program.
Single employer defined benefit plans are required to comply with limitations on accelerated benefits payments, future benefit accruals, and implementation of benefit increases triggered by plan underfunding or plan sponsor bankruptcy. Given the recent market and business disruptions, the following high-level review of these rules may be helpful, especially for plan sponsors of plans that use a non-calendar plan year.
Employers with self-insured health plans may be thinking about making coronavirus (COVID-19)-related changes, such as waiving the patient responsibility portion of the charge for a hospital stay that is related to COVID-19. If there is stop loss insurance, it is important to consider the implications of a plan design change. Many stop loss policies require that the insurer sign off on any design changes to the plan, or exclude payment for treatments or plan costs that are outside of the specifications provided in the policy application. The takeaway is that if you are thinking of making design changes to your self-insured health plan and there is stop loss insurance, it may be important to get advance sign-off from the stop loss insurer, or at least obtain an understanding of the implications if the insurer declines to sign off.
Our employee benefits and executive compensation practice is available to help employers evaluate and troubleshoot potential issues arising from the changing work environment and economic situation caused by the COVID-19 pandemic. This guidance reviews the employee benefits and executive compensation issues that we have been assisting clients with in the last few days.
Please contact the authors or your Morgan Lewis contacts if you have questions related to employee benefits and executive compensation in the midst of coronavirus COVID-19. For updated, comprehensive information about COVID-19, please see our resource page.
The Families First Coronavirus Response Act (Act), signed into law Wednesday, requires group health plans to provide coverage for coronavirus (COVID-19) diagnostic testing, including the cost of healthcare provider visits (as well as telehealth visits), urgent care center visits, and emergency room visits in order to receive testing. Coverage must be provided at no cost-sharing to participants.
This mandate lasts for the duration of the public health emergency declaration period and became effective March 18.
In recent years, reports have indicated robust, and in some respects increasing, enforcement activities by the US Department of Labor (DOL) related to ERISA. The DOL recently issued its enforcement statistics for fiscal year 2019, and they are in line with what the DOL has reported in recent years. For fiscal year 2019, the DOL reported recoveries of $2.5 billion in direct payments to plans. This is a 56.25% increase over the previous year, and affirms that the DOL ERISA enforcement program remains very active and continues to find breaches of ERISA that require restorative payments by plan fiduciaries and others.
Morgan Lewis recently submitted a comprehensive list of IRS relief recommendations to the head of the IRS Office of Chief Counsel. The list identifies tax issues arising from actions taken to respond to the COVID-19 pandemic and provides possible solutions and response recommendations. Read the entire list.
