Executive Compensation

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.


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.

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.


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”).


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.


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

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