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.


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

The coronavirus pandemic has forced employers and health care providers to make difficult decisions about how to protect their customers, employees and patients, while at the same time protecting their personal information. Even during a national health emergency, however, covered entities (e.g., health plans and providers) must continue to comply with the privacy and security rules of the Health Insurance Portability and Accountability Act (“HIPAA”).

In recognition of the unique challenges being faced by covered entities in meeting their HIPAA obligations, the Department of Health and Human Services (“HHS”) has issued various forms of HIPAA-related guidance and enforcement relief, which we have summarized below.


Continue Reading HHS Issues HIPAA Enforcement Relief and Guidance

On March 27, 2020, the President signed into law the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), the third phase of emergency relief passed by Congress in response to the coronavirus pandemic. The CARES Act includes relief measures for workers and employers that impact employee benefit and compensation arrangements, and which may require employers to take certain administrative actions. Below is an overview of the CARES Act provisions affecting various types of employee benefit and compensation arrangements.

Note that this Advisory does not address the CARES Act provisions specific to air carriers and charitable employers.


Continue Reading CARES Act Impact on Employee Benefits and Compensation

JOIN US: Tuesday, March 17, 2020 at 12:30 PM EST

Employers are in uncharted territory with the COVID-19 pandemic, which has created complicated employment issues that continue to evolve by the hour. Join Kelley Drye’s Labor and Employment co-chairs Barbara Hoey and Mark Konkel and senior associate Diana Hamar as they share practical advice for

As federal, state and local governments continue to develop their responses to the COVID-19 outbreak, employers may find themselves in uncharted territory as to how to deal with emerging employee issues.

There are three overriding rules that all employers should remember:

  1. Think safety first. Keeping those employees who are infected or at risk of infection at home to ensure that the rest of the workforce is safe should be the number one priority.
  2. Think about how you can keep your business going.  Make sure your work-from-home policies and technology are up to date, and remind employees how to use them.
  3. Avoid stereotypes. Do not allow employees to assume that people of certain ethnicities are at a higher risk than others. If you become aware of any discrimination or harassment—stop it immediately.

Below are some general answers to questions our clients have been asking.  However, please be aware that this is a very fact-specific and complex topic; COVID-19 related employment issues are evolving by the hour. Employers are cautioned to stay abreast of federal, state, and local government advisories, and to consult legal counsel before making employment decisions or changing policy.


Continue Reading Managing Your Workforce During COVID-19

With the arrival of 2019 novel coronavirus (“COVID-19”) to the United States, employers should begin thinking about strategies to mitigate business interruptions, ensure employee safety, and avoid unnecessary litigation.

Know Your Resources

Employers should continue to monitor reliable guidance provided by the U.S. Centers for Disease Control and Prevention (“CDC”) and local public health agencies. Understanding how COVID-19 is transmitted and what steps can be taken to protect diagnosed or exposed employees is essential to dispelling employee fears. Employers can educate employees on prevention and symptoms and should be prepared to answer employee concerns regarding workplace safety. The following are guides which may be helpful to employers:


Continue Reading Employer Survival Kit: Coronavirus Edition

On December 20, 2019, Congress enacted the SECURE Act as part of the Further Consolidated Appropriations Act of 2020 (together, the “Act”). The Act includes both required and discretionary changes for employer-sponsored qualified retirement plans, some of which are effective for the 2020 plan year. Below is an overview of these changes with a reference to each date on or prior to the plan year for which the changes become effective.

Note that this Advisory does not address changes from the Act that do not affect employer-sponsored qualified retirement plans.

Changes Regarding Contributions and Withdrawals

December 20, 2019

  • Credit Card Plan Loans.  Qualified retirement plans are prohibited from making plan loans through credit cards or similar arrangements.

December 31, 2019

  • Default Automatic Contribution Rate. The maximum safe harbor default automatic contribution rate is increased from 10% to 15% (but can’t be more than 10% for the first year of participation).
  • Safe Harbor 401(k) Plan – Election. A 401(k) plan may become a nonelective contribution safe harbor 401(k) plan after the beginning of the plan year if either (i) it is amended by the 30th day before the end of the plan year, or (ii) it provides a nonelective contribution of at least 4% for the plan year and is amended before the last day for distributing excess contributions for the plan year.


Continue Reading SECURE Act Considerations for Retirement Plan Sponsors

Several jurisdictions have recently adopted laws requiring individuals to purchase health coverage or pay a state tax penalty. Employers employing residents in a covered jurisdiction now need to facilitate compliance by reporting health coverage information to local governmental authorities. The following is a brief summary of the new health coverage reporting requirements.

State Individual Mandates

Under the Affordable Care Act’s (the “ACA”) individual mandate, beginning in 2014, individuals were required to either purchase minimum essential coverage (“MEC”) or pay a federal tax penalty for failing to maintain such coverage. MEC generally includes employer-sponsored group health plan coverage. The Tax Cuts and Jobs Act of 2017 effectively eliminated the individual mandate by reducing the penalty to zero starting in 2019. In response, however, California, the District of ColumbiaNew JerseyRhode Island and Vermont (“Adopting Jurisdictions”) have each adopted their own versions of the ACA’s individual mandate.

Note that Massachusetts had already adopted an individual mandate requirement in 2006, well before the ACA became law. This Advisory does not address coverage reporting requirements under Massachusetts law.


Continue Reading Summary of State Mandated ACA Reporting

March 31, 2020 is the deadline for retroactively correcting most 403(b) plan document defects that occurred on or after January 1, 2010.  These defects can be corrected by amending an individually-designed 403(b) plan or by adopting a pre-approved prototype or volume submitter 403(b) plan.

Employers who adopt a pre-approved 403(b) plan by March 31, 2020

The Internal Revenue Service has recently issued final regulations easing requirements for hardship distributions from 401(k) and 403(b) plans. The final regulations reflect a number of statutory changes, including those made under the Bipartisan Budget Act of 2018, as mentioned in our December 2018 Advisory.

401(k) and 403(b) plans may allow for a distribution of deferred compensation following an employee hardship if (i) the distribution is made on account of an immediate and heavy financial need and (ii) the distribution is necessary to satisfy the financial need. As described below, the final regulations revise the hardship distribution rules to make it easier to meet these requirements, as well as to expand the permissible sources from which hardship distributions can be made. While employers are not required to amend their plan’s hardship provisions by the end of 2019, employers should be prepared to implement certain administrative changes no later than the beginning of 2020 and to update employee communications accordingly.

The following is a brief overview of the new hardship distribution rules.


Continue Reading IRS Issues Final Hardship Distribution Rules