Governor Polis Signs New Paid Sick Leave Law for All Colorado Employees

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By Bradford Williams

On July 14, 2020, Colorado Governor Jared Polis signed into law the Healthy Family and Workplaces Act passed by the Colorado General Assembly during its recently concluded legislative session in June 2020. The new law mandates that nearly all employees working for public and private employers in Colorado must begin accruing at least one hour of paid sick leave for every 30 hours worked, up to 48 hours total, which balance shall carryover year-to-year subject to the limit. This requirement goes into effect for covered employers with 16 or more employees on January 1, 2021, and for all other covered employers (regardless of how many employees they employ) on January 1, 2022.

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Into the Mystic . . . Employee Benefit Considerations for Returning Workers

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by Kevin Selzer

Many employers are venturing into uncharted waters as significant numbers of employees are being rehired or returning from extended leaves of absence (e.g., furloughed employees). In this environment, it can be easy to overlook the employee benefit plan implications of this workforce shift. Below are some best practices for employers faced with employees returning to work.

Ensure that retirement plans are crediting service for returning employees correctly. In most cases, employers will not be able to treat a rehired employee as a new employee for retirement plan purposes. This means that the employer will have to consider the employee’s prior service for purposes of determining proper eligibility and vesting credit. This is a good time for employers to check and confirm that any systems that track service (e.g., payroll systems and the retirement plan administrator’s systems) are configured correctly to credit prior service.

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I Will Be Here When You Are Ready, To Roll With The Changes . . . IRS Releases Section 125 Cafeteria Plan Tax Relief

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by Rebecca Hudson and Lyn Domenick

In response to the global novel coronavirus pandemic, the Internal Revenue Service released guidance to allow temporary changes to section 125 cafeteria plans.  These changes provide increased flexibility to employees to make mid-year election changes and take advantage of grace period extensions.  It also increases the amount of carry-over allowed for health flexible spending arrangements (FSAs).  Plan sponsors may elect to implement some or all of these optional changes which would apply to all employees, not only those who are directly impacted by the pandemic.

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Relief . . . Just a Little Bit – IRS Notice 2020-23: Limited Extensions of Form 5500

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By Kevin Selzer and Lyn Domenick

In the midst of everything going on, we wanted to point out a few “under the radar” implications of IRS Notice 2020-23.  The Notice, issued on April 9th, provides that tax-related deadlines that fall between April 1, 2020 and July 14, 2020 (the “delay period”) are automatically extended to July 15, 2020. 

Delayed 5500s.  Most plan sponsors hoping for Form 5500 relief will have to wait for additional guidance since only a small group of plans have Form 5500 deadlines fall during the delay period.  For example, the regular Form 5500 due date for calendar year plans (July 31st) falls just outside of the delay period.  We note that the DOL has authority under the CARES Act to provide additional Form 5500 relief.

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COVID-19: Developments in Employee Benefits

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By Kevin Selzer

Health Plan Coverage of COVID-19. Colorado has become the latest state to instruct insured health plans to cover COVID-19 testing and benefits (such as office visits) at no cost to the member. The Colorado guidance is available here. The directive also encourages promotion of telemedicine programs and easing restrictions on prescription refills. Other states that have similar directives include California, Oregon, Washington, and New York. Employers sponsoring insured health plans in these states and Colorado should work with their insurer to confirm that these requirements are being met.

The IRS also clarified in Notice 2020-15 that the cost of testing for or treatment of COVID-19 will not be disqualifying coverage with respect to health savings account (HSA) eligibility for individuals covered by a high deductible health plan (HDHP).

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You’ve Got Another PCORI Fee Coming!: Congress revives the PCORI fee and filing obligations

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by Bret Busacker

In the wee hours of December 2019, Congress revived the PCORI fee and filing obligations of employer sponsors of self-insured group health plans.

In accordance with the requirements of the Affordable Care Act, employer sponsors of self-insured group health plans were required to file an IRS Form 720 and pay the Patient-Centered Outcomes Research Institute fee (PCORI) by July 31st of the year following last day of the plan year end (e.g., December 31, 2018 Plan Year End; employers should have filed the Form 720 by July 31, 2019). 

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I Want to Know, Have You Ever Seen…your plan documents?

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by Ben Gibbons

Owners and employees of smaller organizations often find themselves stretched in many directions.  With all of the demands on one’s time associated with operating a business, it is not uncommon to see attention to the organization’s medical and other benefit plans pushed to the back burner.  As a result, smaller organizations tend to rely heavily on their benefits broker for their employee benefit plan documentation.  While brokers can be an excellent resource, plan sponsors need to be aware that the services provided by a broker can vary widely from one broker to the next.

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A Little Less Conversation, a Little More Action: Major retirement plan legislation is finally signed into law

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by Brenda Berg

After being on the verge of enactment last spring but failing to pass, the SECURE Act will become law after all. Congress included the Setting Every Community Up for Retirement Enhancement Act of 2019 (H.R. 1994) (the SECURE Act) in the year-end spending legislation needed to keep the government running. The House passed the Further Consolidated Appropriations Act, 2020 (H.R. 1865) – which included the SECURE Act provisions – on December 17, 2019. The Senate followed on December 19, 2019, and President Trump signed it on the last day possible for the spending bill – December 20, 2019.

For a summary of the major SECURE Act provisions that impact retirement plans, see our previous article. In addition to including the SECURE Act provisions, the year-end legislation adds a few other provisions impacting retirement plans and other benefits. Defined benefit plans such as cash balance plans can now allow in-service withdrawals once a participant reaches age 59-1/2, instead of age 62. The minimum age for in-service withdrawals from 457(b) plans is also lowered to 59-1/2.

For welfare benefits, the year-end legislation repeals the “Cadillac Tax” which would have otherwise taken effect in 2022. The Cadillac Tax was part of the Affordable Care Act (ACA) and would have imposed a 40% excise tax on the insurer or employer for any “high cost” employer-provided health plan coverage.

Many of the benefits provisions are effective in 2020, although some are optional. The legislation generally provides time to amend retirement plans until the last day of the plan year that begins in 2022, and some governmental plans and collectively bargained plans have later deadlines until as late as 2024.

We will be covering many of the specific changes in more detail in upcoming blog posts. Sign up to regularly receive our blog posts (which come more often and on more varied topics than our Alerts).

Time keeps on slippin’, slippin’, slippin’… into the future with an extended deadline for Form 1095-C and Form 1095-B reporting

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by Becky Achten and Bret Busacker

The Internal Revenue Service has extended the due date for providing the 2019 Form 1095-C (applicable to large employers as explained below) and the Form 1095-B (generally applicable to insurance carriers) to participants from January 31, 2020 to March 2, 2020.  The deadlines for filing the 2019 Forms 1094-B, 1095-B, 1094-C and 1095-C with the IRS remain at February 28, 2020, for paper submissions, or March 31, 2020, if filing electronically.

In addition, the IRS has issued relief for insurance carriers generally required to provide the Form 1095-B.  Because there is no individual penalty for not having minimum essential coverage in 2019, individuals don’t need the 1095-B in order to calculate a tax penalty or file an income tax return.  Therefore, the IRS will not assess a penalty to entities that do not provide a Form 1095-B if they meet the following conditions:

  • The reporting entity must post a prominent notice on its website stating that individuals may receive a copy of their 2019 Form 1095-B upon request, along with contact information to make such a request; and
  • The reporting entity must furnish the 2019 Form 1095-B within 30 days of a request.
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It’s HIP(AA) to be square… making sure you are HIPAA compliant

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by Hector A Beason

The Health Insurance Portability and Accountability Act (“HIPAA”) was created for one specific reason – evolution of technology. Today, health care providers are using online clinical applications and electronic health records; also, health plans are offering online access to claims and care management. This evolution of technology, while incredible and appropriate, raises several security risks that could, if not appropriately addressed, lead to HIPAA penalties.

Health care providers and group health plans (“covered entities”) deal with highly sensitive and protected health information (“PHI”). The HIPAA privacy, security, and breach rules were adopted to make sure covered entities protect and safeguard PHI. Although employers/plan sponsors are not directly subject to the HIPAA rules; if the covered entity is a self-funded group health plan, complying with the myriad of HIPAA rules will likely fall on the plan sponsor.

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