Credit Where Credit Is Due: IRS Offers Long-Sought Guidance on Employer Retention Credit Program

As we previously reported, the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) provided for an employee retention credit (“ERC”) designed to encourage employers to retain workers during the COVID-19 crisis.  In general, the ERC permits eligible employers to claim a refundable tax credit of a portion of qualified wages paid to employees over a given period.

Initially, the IRS issued guidance on ERCs in the form of online Frequently Asked Questions (the “FAQs”).  The FAQs were non-binding and subject to change.  As of March 1, 2021, the IRS published formal rules with respect to ERCs in Notice 2021-20 (the “Notice”).  Read More ›

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Wellness Program Incentives – New Year, New EEOC Proposed Rules

For years we have been trying to understand how the EEOC regulates wellness programs. Although we still do not have a complete picture, we are getting closer with the EEOC’s new Notices of Proposed Rulemaking on wellness programs under the Americans with Disabilities Act (“ADA”) and the Genetic Information Nondiscrimination Act (“GINA”). This blog summarizes the status of the ADA wellness program rules and the changes under the recently released proposed ADA wellness program rules.

Title I of the ADA

Title I of the ADA prohibits discrimination against individuals on the basis of disability in regard to employment compensation and other terms, conditions, and privileges of employment, including “fringe benefits available by virtue of employment, whether or not administered by the covered entity.” The ADA also restricts the medical information employers may obtain from employees by generally prohibiting them from making disability-related inquiries or requiring medical examinations. Read More ›

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Get Ready, Get Set, to Cover COVID-19 Vaccines for Free

Last month, we reported that Moderna was seeking FDA authorization for its COVID-19 vaccine and reminded readers about the immunization coverage requirements in Section 3202 of the CARES Act in our SW Benefits Blog, “Free COVID-19 Vaccine and Testing Update.”  As of the date of this blog, the Moderna and Pfizer-BioNTech COVID-19 vaccines have been approved and group health plans must act quickly to meet the requirements of the CARES Act.

On October 28, 2020, HHS, DOL, and the Treasury issued interim final rules (the “new regulations”) about the COVID-19 immunization coverage requirements.  The new regulations generally took effect November 2, 2020 and are effective until the end of the COVID-19 public health emergency declared by HHS.  Read More ›

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Free COVID-19 Vaccine and Testing Update

On November 30, Moderna announced that it is seeking FDA authorization for its COVID-19 vaccine.  In addition, on November 17 the FDA issued an emergency use authorization for the first COVID-19 diagnostic test for self-testing at home.  With these recent developments, a COVID-19 update for health and welfare plans might be helpful.

  • Free COVID-19 Vaccines – As reported in our April 1, 2020 SW Benefits Update: “The CARES Act – What Are the Health and Welfare Plan Issues to Consider?,” Section 3203 of the CARES Act requires group health plans and health insurance issuers to cover without cost-sharing any “qualifying coronavirus preventive service,” which includes an item, service, or vaccine that is intended to prevent or mitigate coronavirus that is:  (1) an evidence-based item or service with an A or B rating recommended by the U.S.
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‘Tis the Season: Four Year-End Employee Benefit Plan Checklists

Each year, we publish health and welfare, cost-of-living, executive compensation, and qualified retirement plan checklists to help individuals and employers stay apprised of updates to the law of employee benefits.  We recently published the last of these annual checklists.  In case you missed them, the links are below.

Happy holidays!

2020 End of Year Plan Sponsor “To Do” List (Part 1) Health & Welfare

2020 End of Year Plan Sponsor “To Do” List (Part 2) Annual Cost of Living Adjustments

2020 End of Year Plan Sponsor “To Do” List (Part 3) Executive Compensation

2020 End of Year Plan Sponsor “To Do” List (Part 4) Qualified Retirement Plans 

  Read More ›

Posted in Employee Benefits, Executive Compensation, Health & Welfare Plans, Health Care Reform, Qualified Retirement Plans | Tagged , , , , ,

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Finally, Some Good News: IRS Extends Certain ACA Reporting Deadlines and Transition Relief

As in prior years, the IRS has provided relief for employers preparing to comply with the Affordable Care Act’s (“ACA”) information reporting requirements in early 2021 for the 2020 calendar year. In particular, Notice 2020-76 (the “Notice”) extends the deadline to furnish Forms 1095-B and 1095-C to employees. The new deadlines are provided, below.

Original Deadline Extended Deadline
Form 1095-B (to employees) January 31, 2021 March 2, 2021
Form 1095-C (to employees) January 31, 2021 March 2, 2021

Importantly, the Notice does not extend the deadline for filing Forms with the IRS.  Instead, the deadline to file with the IRS remains February 28, 2021 (for paper filings) and March 31, 2021 (for electronic filings). Read More ›

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IRS Approves Additional Leave-Based Donation Programs for COVID-19 Relief

We previously posted about two leave-sharing programs available to employers during the COVID-19 pandemic: major disaster leave-sharing programs and medical emergency leave-sharing programs.  These leave-sharing programs may allow employees to donate paid leave to co-workers affected by COVID-19.  When properly structured under Internal Revenue Service (“IRS”) guidance, the donated leave is excluded from the gross income of the donor employee. 

On June 11, 2020, the IRS published Notice 2020-46, which permits employers to establish an additional type of leave-sharing program: a leave-based donation program under which employees can donate vacation, sick, or personal leave in exchange for cash payments that the employer makes to a charitable organization described in Internal Revenue Code (the “Code”) Section 170(c) (a “Section 170(c) Organization”). Read More ›

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In Case You Missed It … Recent Posts From the SW Benefits Update

We periodically consolidate our prior blog posts and push them out as a single package to help individuals catch up on what they might have missed with respect to important health and welfare, qualified retirement plan, and executive compensation issues.  The posts highlighted here largely focus on the CARES Act and the impact the COVID-19 pandemic is having on employee benefit and executive compensation plans.  As always, please feel free to reach out to any member of our employee benefits and executive compensation group with questions.  Please enjoy (and have a safe) Memorial Day weekend!

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Posted in Employee Benefits, Executive Compensation, Health & Welfare Plans, Health Care Reform, Qualified Retirement Plans | Tagged , , , , , ,

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CARES Act Enables Employers to Assist with Student Loan Repayments

The Coronavirus Aid Relief and Economic Security Act (the “CARES Act”), signed into law on March 27, 2020, provides employers with a new mechanism to assist their employees with repayment of student loans. Section 2206 of the CARES Act amends Section 127 of the Internal Revenue Code (the “Code”) to allow employers to pay up to $5,250 toward qualified education loans as part of an educational assistance program as long as the payments are made before January 1, 2021. Employers can make payments either directly to the employee or to a lender.

Section 127 provides that amounts paid or expenses incurred by employers under an educational assistance program for the educational assistance of employees are not included in the employee’s gross income, provided that the program satisfies the following requirements:

  1. The program must be a separate written plan of the employer for the exclusive benefit of its employees to provide such employees with educational assistance. 
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Two Leave-Sharing Program Options for Employers During the COVID-19 Pandemic

As employers cope with the COVID-19 pandemic, they may consider leave-sharing programs as a method to permit employees to donate paid leave to their coworkers. Leave-sharing programs that are properly structured under Internal Revenue Service (“IRS”) guidance permit exclusion of transferred leave from the gross income of a donor employee and inclusion of the transferred leave in the gross income of the coworker recipient. However, the IRS has generally limited this favorable tax treatment to leave-sharing programs for: (1) major disasters, and (2) medical emergencies.

  1. Major Disaster Leave-Sharing Programs
    1. Eligible Employers

IRS Notice 2006-59 defines a “major disaster” as a major disaster as declared by the President under Section 401 of the Robert T. Read More ›

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