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The IRS recently issued further guidance under the CARES Act expanding the categories of individuals eligible for coronavirus-related plan distributions and loans, and providing additional administrative guidance on relief offered under the Act.

Background

As described in our April 3, 2020 Advisory, the CARES Act:

  • eliminates the 10% early withdrawal penalty on up to $100,000 in coronavirus-related distributions for qualifying individuals;
  • allows qualifying individuals to include coronavirus-related distributions in income over three years;
  • allows qualifying individuals to repay coronavirus-related distributions to a retirement plan in one or more installments within three years;

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Continue Reading IRS Issues Guidance on CARES Act for Retirement Plans

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Four months ago, the Dow was close to 30,000, employment rates were at historic highs, the coronavirus was still “novel,” and millions had not yet taken to the streets in global protests against police brutality and racial inequality. The workplace we now return to exists in…

In response to the COVID-19 outbreak, Congress, the Department of Labor (“DOL”) and the Internal Revenue Service (“IRS”) have each offered temporary relief from certain legal requirements applicable to employee benefit plans. Some of this temporary relief impacts participants’ rights under ERISA-covered employee benefit plans.

This Advisory focuses on the impact of the temporary relief on ERISA participant notice requirements, and also briefly summarizes that temporary relief.
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Continue Reading COVID-19 Relief Triggers ERISA Participant Notice Requirements

On June 3, the Internal Revenue Service (“IRS”) issued Notice 2020-24 providing temporary relief from the physical presence requirement for participant elections that are required to be witnessed by a plan representative or a notary public, including spousal consents.  The relief covers the period from January 1, 2020 through December 31, 2020 (the “Relief Period”).  While specifically intended to facilitate the payment of coronavirus-related distributions and plan loans under the CARES Act, as described in our Advisory of April 3, 2020, Notice 2020-24 applies to any participant election that requires the signature of an individual to be witnessed in the physical presence of a plan representative or notary.
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Continue Reading IRS Issues Temporary Relief from Physical Presence Requirement for Spousal Consents Under Retirement Plans

On May 27, 2020, the Department of Labor published final regulations establishing a new electronic disclosure safe harbor for ERISA-covered retirement plan (but not health and welfare plan) documents. This new safe harbor does not replace the DOL electronic disclosure safe harbor issued in 2002 (the “2002 safe harbor”), but instead offers employers additional methods for electronic disclosure of plan documentation. Compared to the 2002 safe harbor, the new safe harbor is broader in scope with respect to how electronic disclosures may be made and to whom, but is subject to several administrative requirements and limitations.

We have summarized the new safe harbor rules below to help employers decide which electronic disclosure safe harbor may work best for them.
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Continue Reading DOL Establishes New Electronic Disclosure Safe Harbor for ERISA-Covered Retirement Plans

The Internal Revenue Service (“IRS”) recently issued guidance relaxing several cafeteria plan rules to help employees deal with unanticipated COVID-19 expenses. Employers that sponsor cafeteria plans will need to decide whether to amend their plans to adopt these optional rule changes. We have summarized the rule changes below, including some important employer considerations.

Note that the IRS also issued recent guidance clarifying the retroactive application of CARES Act relief for high deductible health plans and extending the period in which premium expenses may be reimbursed. These changes will be addressed in a separate post.

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Continue Reading IRS Issues Cafeteria Plan Relief, Providing Employers Significant Discretion

The uncertainties surrounding the COVID-19 pandemic have made it difficult for employers to predict the long-term impact of the pandemic on their businesses. In response, many employers are looking for ways to preserve cash reserves by reducing or deferring benefit and compensation costs, without taking the more drastic step of permanently reducing their workforces. We have summarized below some of the near term cash preservation measures that employers might consider with respect to their benefit and compensation arrangements.
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Continue Reading COVID-19: Employee Benefit Measures for Preserving Cash and Saving Jobs

In response to the increased media presence in hospitals, the Department of Health and Human Services (“HHS”) issued guidance this week reminding health care providers that the COVID-19 outbreak does not change HIPAA’s privacy rules with respect to giving the media access to treatment areas. The guidance reinforces and amplifies existing HHS guidance by providing examples of its application to the COVID-19 public health emergency.

A patient receiving treatment in a health care facility is typically surrounded by protected health information (“PHI”), which includes health information in any form or medium (e.g., oral communications, life function monitors, charts, etc.). HHS’s guidance provides several examples of PHI in treatment areas, including how the mere presence of a patient in the area of a health care facility dedicated to treating a specific disease, such as COVID-19, reveals the patient’s diagnosis. As such, members of the media entering a health care facility’s treatment areas immediately have access to PHI they can see, hear and record.

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Continue Reading HIPAA Compliance Failures Make for Bad Television

In response to the COVID-19 outbreak, the Department of Labor (the “DOL”) recently issued guidance providing relief to employee benefit plan participants and administrators facing challenges in complying with various administrative requirements and deadlines. We have summarized below how this latest DOL guidance seeks to addresses those challenges.

First, in a notice jointly issued with the Internal Revenue Service (the “IRS”), the DOL extended the timeframes for participants to exercise certain rights, file claims and appeal denied claims. Second, in a separately issued notice, the DOL extended the time for administrators to furnish certain notices and disclosures, as well as relaxed the enforcement of other administrative requirements. Both notices apply with respect to a relief period starting March 1, 2020 and ending 60 days after the end of the federally declared national emergency for the COVID-19 outbreak, subject to a 1 year limit (the “Outbreak Period”).

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Continue Reading COVID-19: DOL Issues Administrative Changes for Employee Benefit Plans

In response to the COVID-19 emergency, the IRS has automatically extended the deadline for retirement and welfare plans to file Form 5500 and Form 8955-SSA until July 15, 2020.  As explained below, however, this automatic extension will only be useful to certain benefit plans with a non-calendar plan year.

Both Form 5500 and Form 8955-SSA must be filed by the last day of the 7th month following the end of a plan year.  A plan may extend this original filing deadline by applying for a 2 1/2 month extension using Form 5558.  The IRS has, however, granted an automatic extension until July 15, 2020 for plans with original or extended filing deadlines that fall on or after April 1, 2020 through July 14, 2020.

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Continue Reading Limited Filing Relief for Form 5500 and Form 8955-SSA