FAQs & Resources

Coronavirus (COVID-19) Updates


In an effort to provide employer assistance, guidance, and direction, Michigan Planners has compiled important and relevant information from available resources, including the government, carriers, Human Resources consultants, legal firms, and other credible third parties. This reference page is intended to serve as a guide and will be updated as information becomes available and as reasonably possible. Please note that due to the nature of the ever-changing events, it is possible that the information you read today may be outdated tomorrow. We will do our best to maintain a current and accurate reference page. 

Everyone at Michigan Planners is available to offer up support in order to properly service you, your management team, your employees, and their family members! For questions that may not be represented within this page, or for additional comments, please contact your customer relationship manager.


How to use this reference page:

Information is divided into the following 4 sections: 1) Compliance 2) Employee Benefits 3) Human Resources and 4) Risk and Safety Management with links to outside resources for additional guidance. Because some of the links represent outside information, it is possible that a link may become outdated or be relocated; thus, if a link becomes broken, please notify Laura Van Houtte at [email protected] Additionally, we intend to continuously update this page, so if you have a question or new information you would like to share, please contact us at 800.674.9235.

Thank you for your patience and questions!


Compliance 

Read legal white papers and briefs from some of Michigan's top law firms.


Human Resources

Gain knowledge and insight from HR sources, such as SHRM and ThinkHR.


Posters

Download sample posters to distribute and hang throughout the company.


Employee Benefits

Get the latest carrier updates, alerts and coverage information.


Risk and Safety Management

Stay current on the advisement from the CDC, state and other organizations as direction is released.


Webinars

Join others during these live and prerecorded conversations about relevant COVID-19 related topics.




Medical / Prescription Drugs 


1. Will HAP allow employers to continue health care coverage for currently enrolled employees who are temporarily laid off or have had their hours reduced? (as of April 29, 2020)

Yes, HAP will allow if the employer considers their employees actively employed (whether temporarily laid off or working reduced hours), their coverage can continue. 

  • If an employer temporarily “terminates” an employee from their payroll system so that the person can collect unemployment, it is up to the employer to determine if they consider that person an active employee who will be returning to work. If yes, they can continue their health care coverage.
  • It is up to the employer group to monitor and manage their enrollment. 
  • The employer is responsible for continuing to pay the premiums.
  • HAP will re-evaluate these parameters at the end of June.


2. How will HAP handle new hires that are in their probationary/new-hire period? (As of April 29, 2020)

The waiting period will not be affected for employees who were in their new hire/probationary period as of March 12, 2020 and are temporarily laid off or their hours are reduced.


3. If an employer needs to terminate employees temporarily from their health care coverage during this time, can they reinstate the employees’ health care coverage after they return to active employment without satisfying their waiting period? (As of April 29, 2020)

Yes, when existing employees return to work, we will waive waiting periods for any group that does not have “immediate coverage” for employees indicated in their re-hire policy.


4. What if an employer needs to make enrollment changes due to life events and they are unable to do so right now? (As of April 29, 2020)

For life events that occur from March 24, 2020 through June 30th, an employer may make enrollment changes for employees and their eligible dependents. Those changes must be submitted no later than August 31, 2020. Employers can continue to send an email with eligibility changes to [email protected] or self-serve using the Employer Portal at www.hap.org. 


5. What is HAP’s standard premium payment grace period? (As of April 29, 2020)

We plan to continue with our grace period as defined today. For insured employer groups, we have a 30-day grace period. We realize that COVID-19 is impacting everyone, and we will continue to monitor and adjust our approach as necessary.


6. What if employers cannot afford to pay their premiums, due to loss of business or shut down? Is there any relief? (As of April 29, 2020)

We realize that COVID is impacting our employer groups, and we will work with them to address their specific situation on a group-by-group basis. We will work with our employer partners to determine the best course of action.  The employer group should reach out to Lisa Vazquez of HAP’s Receivables department at (248)443-8520, or [email protected]


7. If employers can no longer afford to continue covering their employees, what options do they have? (As of April 29, 2020)

HAP has individual plans available at hap.org or by calling (855) 948-4427. Documentation showing loss of coverage will be needed – that can be obtained by calling HAP’s customer service at (313)872-8100. Employees seeking assistance can go to www.healthcare.gov to find ACA plans that may offer premium tax credits. 


8. Will HAP re-rate experience-rated groups due to fluctuations in eligibility due to the COVID-19 pandemic? (As of April 29, 2020)

We do expect eligibility changes as a result of COVID-19.  However, we have no plans to re-rate or change established rates due to these eligibility shifts in the short term. 


1. How long can employees remain covered with McLaren Health Plan if an employer needs to close their business temporarily due to a virus outbreak or needs to temporarily layoff or furlough employees, but they want to keep their benefits? (As of July 1, 2020)

McLaren Health Plan will temporarily continue to provide coverage if a business closes, temporarily lays off employees, or cuts hours for employees due to the COVID-19 outbreak. At this time, coverage may only continue through July 31, 2020. It is the employer’s decision whether to continue to offer benefits – not McLaren Health Plan’s. Employers must continue to pay premiums according to current payment policy to maintain coverage. McLaren Health Plan will continue to monitor and evaluate the situation over the coming weeks. 


2. Will McLaren Health Plan require employers to immediately move laid off employees to COBRA? (As of July 1, 2020) 

If an employer opts to provide coverage for employees on temporary layoff, the employer will not be required to move the employees to COBRA. At this time, coverage may only continue through July 31, 2020. It is the employer’s decision whether to continue to offer benefits – not McLaren Health Plan’s. Employers must continue to pay premiums according to current payment policy to maintain coverage. McLaren Health Plan will continue to monitor and evaluate the situation over the coming weeks. COBRA will apply upon loss of coverage. 


3. Will McLaren Health Plan have a set time period for which employees who are laid off can remain on an active policy vs. being moved to COBRA? (As of July 1, 2020)

The employer determines eligibility. If the employer chooses to provide coverage and continues to pay premiums according to current payment policy, the employees will be covered through July 31, 2020. 


4. Will McLaren Health Plan waive underwriting requirements to allow employers to pay for benefits while employees are receiving unemployment benefits? (As of July 1, 2020)

Yes. McLaren Health Plan will waive underwriting requirements through July 31, 2020. We will continue to monitor the situation and adjust accordingly as needed. 


5. Will McLaren Health Plan waive waiting periods for workers returning to work after furlough or layoff as a result of the COVID-19 pandemic? (As of July 1, 2020)

Yes. McLaren Health Plan will waive the waiting period to reinstate employees if the employer did not elect to continue coverage during layoff or furlough. 


6. Is there a requirement to alter any group provisions/policies if it is a result of the COVID-19 emergency mandates? (As of July 1, 2020)

No. At this time we will not require any changes to plan documents or policies due to the declared state of emergency. McLaren Health Plan will continue to assess as new information becomes available.


7.  Will McLaren Health Plan provide any grace period for premium payment for individuals or employer groups? (As of July 1, 2020)

McLaren Health Plan is committed to supporting our groups and members. Since premium is prepaid, groups are currently paid through June 30, 2020. For fully insured customers, we currently have a 30-day grace period. McLaren Health Plan will extend this by an additional 15 days, so customers will have until August 15, 2020 to remit payment. This also applies to individuals insured with McLaren Health Plan off the Exchange. On-Exchange individuals will follow the normal process.


8. Will McLaren Health Plan permit any leniency related to premium payments if small businesses are forced to close part of their business due to the Governor’s orders? (As of July 1, 2020)

McLaren Health Plan is committed to supporting our groups and members. Since premium is prepaid, groups are currently paid through June 30, 2020. For fully insured customers, we currently have a 30-day grace period. McLaren Health Plan will extend this by an additional 15 days, so customers will have until August 15, 2020 to remit payment. This also applies to individuals insured with McLaren Health Plan off the Exchange. On-Exchange individuals will follow the normal process. 


9. Will McLaren Health Plan waive copays, deductibles and coinsurance during the COVID-19 pandemic? (As of July 1, 2020)

Yes. McLaren Health Plan will waive copays, deductibles and coinsurance for diagnoses related to COVID-19 for all lines of business through July 31, 2020.* This may not apply to self-funded or high-deductible health plans. 

*Or earlier, if businesses resume normal operations.


10. Will McLaren Health Plan cover virtual visits if a provider office is only doing online visits? (As of July 1, 2020)

A telemedicine visit is a visit that can be done over the phone with a doctor. This is a good way to help prevent the spread of infections like COVID-19. COVID-19 testing related services received through telemedicine are a covered benefit for McLaren Health Plan members with no cost-sharing. The doctor will determine if the member needs the COVID-19 test and will tell the member what to do next. 

Telemedicine visits are also covered with your doctor for healthcare needs not related to COVID-19. These visits are subject to your normal office visit cost-share responsibility.


11. Will McLaren Health Plan waive the online office visit copay through Virtuwell for someone who uses it for symptoms of the coronavirus? (As of July 1, 2020)

McLaren Health Plan’s online office visit option, www.virtuwell.com allows members to have a virtual office visit with a board-certified nurse practitioner. The office visit copay will be waived through July 31, 2020* for services related to COVID-19.

*Or earlier, if businesses resume normal operations.


12. How will McLaren Health Plan cover testing for COVID-19? (As of July 1, 2020)

McLaren Health Plan will cover the cost of medically necessary COVID-19 tests for all members with no member cost-sharing for both in-network and out-of-network providers, including those with high deductible health plans through July 31, 2020.* The most recent IRS guidelines allow for this coverage. https://www.irs.gov/newsroom/irs-guidance
For all members, McLaren Health Plan will cover the two codes released by the Centers for Medicare & Medicaid Services (CMS), U0001 and U0002 and 87635, for laboratory testing. We will cover these two codes at 100% of allowed charges with no member cost sharing through July 31, 2020.* McLaren Health Plan will also waive the costs of items and services related to the furnishing or administration of the testing provided to an individual during a health care provider office visit, urgent care center, an emergency room visit, or through a telehealth visit through July 31, 2020.*

*Current “Emergency Declaration” is set to end July 16, 2020. If lifted early or extended, this date could change.


13. How will McLaren Health Plan cover treatment of medically necessary services related to coronavirus or COVID-19? (As of July 1, 2020)

McLaren Health Plan will waive all cost-sharing for treatment or medically necessary services related to coronavirus or COVID-19 through July 31, 2020.*

*Or earlier, if businesses resume normal operations.



14. Is McLaren Health Plan waiving other pre-authorizations related to COVID-19? (As of July 1, 2020)

Yes. McLaren Health Plan is removing the requirement for prior authorizations for services related to COVID-19.


15. Is there a provision for early prescription refills during this time? (As of July 1,2020)

McLaren Health Plan will be waiving or removing the early refill edit for all lines of business for all medications (except for controlled substances) through July 31, 2020.

*Or earlier, if businesses resume normal operations.


FAQs


1. What is the “Outbreak Period” and how does it apply to the deadline extensions? (As of May 15, 2020)

The “Outbreak Period” runs retroactively from March 1, 2020 to 60 days after a yet-to-be announced end of the COVID-19 National Emergency (or such other date announced by the Departments in a future notice), but no longer than one year. Generally, the impact of the normal deadlines under COBRA are paused during the Outbreak Period and start-up again after the Outbreak Period ends.


2. What do these deadline extensions mean for employers in regards to COBRA continuation? (As of May 15, 2020)

The extensions provide employers with additional time to provide a COBRA election notice after a qualifying event occurs. However, BASIC recommends that employers continue to distribute required notices and disclosures according to the previous rules and timeframes, if possible. Employers should also know that they are permitted to furnish notices electronically during the Outbreak Period.


3. What do these deadline extensions mean for employees/participants? (As of May 15, 2020)

The extensions provide participants additional time to notify the plan of certain qualifying events (e.g., divorce or legal separation, aging out by dependent children, or disability determinations). The extensions also provide participants additional time to elect and pay for COBRA continuation coverage. Participants will still be required to pay premiums, but they will not be due until at least 60 days following the end of the Outbreak Period (which has not yet been determined). Nonpayment will likely result in an interruption of coverage; however, coverage will be reinstated retroactively to prevent a gap in coverage once payments are made.

Participants are encouraged to pay premiums under normal grace periods to lessen the impact of delayed coverage, temporarily denied claims, or avoid a balloon payment at the end of the Outbreak Period that represents multiple months of premiums due.


4. Are employers required to comply with the deadline extensions under the regulations? (As of May 15, 2020)

Yes, an employer must allow a COBRA participant additional time to elect COBRA and make payments. However, as explained below, coverage will likely be suspended until the payment has been made in full. This may cause a delay or denial in claims being processed for the participant by the carrier. BASIC recommends that employers check in with their group health plan carriers to understand how the carriers will handle claims and appeals in these situations. 


5. How will BASIC administer the deadline extensions for COBRA continuation coverage? (As of May 15, 2020)

In Q&A sessions held after the regulations were issued, the Department of Labor provided clarification regarding permissible COBRA administration strategies during the Outbreak Period. Consistent with this informal guidance, BASIC will continue to process notifications under the existing timelines for COBRA continuation. COBRA coverage will continue to be terminated based on existing grace periods and postmark dates. Extensions under the regulations will be managed on an individual basis as BASIC is contacted by employees/participants.

BASIC notices have been updated to include notification to employees/participants of their right to extended election and payment deadlines. Additionally our notices for termination due to failure to make a payment were updated to inform the participant of their rights, the impact of a failure to make a payment, and instructions on next steps.

BASIC will continue to encourage participants to pay premiums under normal grace periods to lessen the impact of delayed coverage, temporarily denied claims, or avoid a balloon payment at the end of the Outbreak Period that represents multiple months of premiums due.


6. Can a participant extend their federal COBRA continuation period? (As of May 15, 2020)

Not at this time. There have been no updates in the regulations to allow for additional coverage periods outside of the standard Federal COBRA guidelines. Participants may have other health coverage available to them, including coverage through the Health Insurance Marketplace at www.HealthCare.gov or by calling 1-800-318-2596.


7. What is the COBRA obligation for an employer that is going out of business? (As of May 15, 2020)

Unfortunately, if an employer is going out of business and plans will cease to exist, there is no obligation to offer COBRA to employees losing coverage. At this time, we recommend that any employees losing coverage due to a permanent closure refer to the Health Insurance Marketplace at www.HealthCare.gov or call 1-800-318-2596 to find a plan that works for them.


FAQs


1. How will my medical / prescription expenses concerning COVID-19 be covered by the insurance companies?

Most of the carriers, third party (TPAs), and pharmacy benefits managers (PBMs) are releasing fact sheets as information is released. Please click on the above carrier links for the actual documents from the carriers concerning covered services. 

For answers we have received directly to our office from the companies, we will post the answers below.

  • ASR is offering its clients the option to cover diagnostic testing for this disease as preventive care under their health benefit plans. ASR requests that clients advise the TPA of how they would like to cover testing for COVID-19., either as preventive or not.
  • HAP members who use virtual visits and telehealth for COVID-19 related health issues and other medical concerns won't be charged a copay, effective March 15, 2020 through April 30, 2020. We will continue to monitor the end date and will notify you of any changes. 


Who does this apply to?

  • Individual members
  • Fully insured group members
  • Individual and group Medicare members
  • Regarding self-funded groups: you have individual decisions about your employee benefit plans, including the effective date for any benefit change.


What services are available through virtual visits and telehealth?

  • ColdsFlu
  • Headache
  • Sprains and strains
  • Rashes and sinus infections
  • Pink eye
  • Other minor conditions
  • Some prescriptions (if appropriate)


How can HAP members access virtual visits and telehealth services? 

  • Primary Care Physician: HAP members should first contact their doctor’s office to see if they have virtual visits. Due to COVID-19, a doctor’s visit using any kind of video/audio call technology (for example, FaceTime or Skype) will be considered a telehealth visit.
  • Amwell®: connects HAP members to board-certified doctors 24 hours a day, 7 days a week using their phone, tablet or computer. To sign up, follow these steps:
  • Download Amwell: Doctor Visits 24/7 iOs or Android mobile app or visit amwell.com
  • Enter your information and click "Sign Up."
  • When prompted for a service key, use: HAPMi


How is HAP promoting this to members?

  • HAP has added special content related to COVID-19 to hap.org. Members can find FAQs and information on how to enroll in our Amwell telehealth service. 
  • Members registered to use their hap.org member account will also see an alert about this benefit change.


Where should members be directed to for more information?

  • To register for HAP’s telehealth through Amwell: hap.org, log in, then select My Care, then select Telehealth
  • HAP Customer Service at (800) 422-4641 (TTY: 711), Monday-Friday, from 8 a.m. to 7 p.m.
  • HAP is continuing to use our social media channels, including Facebook, Twitter, LinkedIn and Instagram, to quickly share member updates.


  • EHIM's standard policies and procedures have been modified to authorize early prescription fill requests and maintenance fills (90-day supplies) of medication. Their Call Center is available 24/7, and LIVE representatives are continuing to field calls related to this rapidly changing situation. If members have specific questions, they can contact the EHIM Customer Service Center at 800-311-3446. 


2. What happens to an employee’s benefits while the employee is absent from work and can’t work remotely?

This will depend in part on the reason for the absence and your leave policies. If the employee is actually sick, or caring for a family member who is sick, the absence may be protected under the Family Medical Leave Act (FMLA), in which case your company must allow the employee’s health benefits to continue, and you can also continue other benefits for the employee.

But if the employee is not actually sick or caring for a sick family member, but instead is self-quarantining (and not able to work remotely) because of exposure to the virus, the absence may not qualify as an FMLA leave (though HR 6201, the Families First Coronavirus Response Act, currently pending in Congress, may change that). If the leave is not protected under the FMLA, you will need to look at your leave policies and your plan documents to see what they say about continuation of benefits during a non-FMLA leave. If the leave is paid, many employers will continue benefits as though the employee were actively at work; but if the leave is unpaid, benefits may end immediately or at the end of the month. 

Sometimes, plan documents do not have an express provision dealing with this issue, in which case you may need to look back at past practices for other employees who have been on a non-FMLA leave. If your workforce is collectively bargained, the collective bargaining agreement might also address this issue.

If you are instructing employees to self-quarantine, and the employee can’t work remotely, then you should consider whether your benefit continuation practices need to change. If you have insured benefits, the insurer will need to agree to any changes. If you have any self-insured benefits, you have more flexibility, but you will want to make sure that your third-party administrator can administrate any changes you plan to implement and that your stop-loss carrier will provide coverage. Any changes need to be formally adopted as a plan amendment. (Source: Warner Norcross + Judd)


3. What happens to benefits if I have to lay off employees because of a slow-down in the economy?

This will depend on what your plan documents say about benefits during lay-off periods. Many plans will end benefits during a layoff, which means that employees who wish to continue health coverage during the layoff must elect COBRA. Some plans, however, continue benefits during temporary lay-off periods, which might be defined as periods expected to last no longer than one or two months. If your workforce is collectively bargained, the collective bargaining agreement might also address this issue.

If benefits end during a layoff, you might consider whether to make changes in the plan (which may require discussions with insurance companies, third-party administrators and stop-loss carriers). Alternatively, you might consider temporary assistance with COBRA premiums. Either approach requires documentation (a plan amendment, or a clear policy as to how long and under which circumstances the employer will assist with COBRA premiums). (Source: Warner Norcross + Judd)


Health Saving Accounts / Flexible Spending Accounts


FAQs


1. What expenses concerning COVID-19 are HSA eligible?

According to Health Equity, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) signed into law on March 27, 2020 contains important provisions that will affect HSAs, HRAs and FSAs. 

Effective immediately: 

  • HSA-qualified health plans can now cover telehealth and other remote care service expenses below the HDHP statutory deductible limit, or at no or low-cost sharing, without affecting an account holder’s ability to continue contributing to their HSA. This provision will last until December 31, 2021.
  • Over-the-counter drugs and medicines can be paid for or reimbursed through an FSA, HRA or HSA without a doctor’s prescription.
  • Menstrual care products are now considered a qualified medical expense and are eligible for payment or reimbursement through an FSA, HRA or HSA. All expenses incurred after December 31, 2019 qualify, and the provision has no expiration date.


2. My child’s day care closed – can I stop my dependent care FSA contributions?” 

This is probably a common question your employees are asking, as day cares and other child care providers are closing or stopping child care due to the COVID-19 pandemic. Depending on what your plan document says, the answer may very well be “yes.”

The IRS rules that govern dependent care FSAs require an employee’s pre-tax dependent care FSA contribution election to be irrevocable except in the case of a “change event.” A significant change in child care costs is one such “change event” that would allow an employee to change his or her dependent care FSA contributions mid-year. For example, an employee whose child is now at home because the child’s day care closed has experienced a significant change in costs and could decrease his or her dependent care FSA contributions, or revoke them all together. Conversely, this change event would also allow an employee to increase his or her dependent care FSA contributions when the day care reopens.

A few things to keep in mind as you evaluate employees’ requests to change their dependent care FSA contributions:

  • Check the language in your dependent care FSA plan document. Your plan document must explicitly permit an election change for a significant change in cost. If it doesn’t, you can prospectively amend your plan to add the change event.
  • Be sure to follow your plan’s rules regarding deadlines for employees to notify you of a change event and any procedures for requesting an election change. If you want to provide more flexibility for this situation than what your plan currently provides, you can prospectively amend your plan to reflect new rules or procedures.
  • A change event due to a significant change in child care costs does not allow an employee to get a refund of any dependent care FSA contributions already credited to his or her dependent care account. (Source: Warner Norcross + Judd)


Dental


Vision


1. Will VSP maintain coverage during the COVID-19 mandate for closed businesses? 

We will keep the employees active in our system unless we are advised by the group, TPA or broker of record to do otherwise. Also, VSP essentially provides clients 60 days to make their payments without risking interruption of benefits. Additionally, the VSP Finance Team will work with clients on a repayment schedule, late fees, etc. We know this is a very challenging time for many clients, and the Finance Team will stretch their normal parameters as much as they possibly can to help our clients in need.


Disability


FAQs


1. Is quarantine a payable benefit?

Please refer to each specific carrier as it relates to the quarantine benefit and whether or not a rider is available or if quarantine is covered as part of the standard language within the contract.


Worksite Benefits


Retirement Plans


CARES Act Provisions for Retirement Plans

Congress has passed significant legislation in response to the COVID-19 emergency. The Families First Coronavirus Response Act (FFCRA) was enacted on March 18, 2020, and on March 27, 2020, the President signed the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”). While most of the CARES Act concerns funding various relief programs and distributing money to citizens to help them with their finances during this crisis, employers should take note of the following provisions that apply to retirement plans: 


Special Rules for Use of Retirement Plan Funds

1. In-Service Withdrawals. The CARES Act allows in-service distributions through December 31, 2020, for up to $100,000 for coronavirus‑related reasons from 401(k) plans, 403(a) plans, 403(b) plans, government‑sponsored 457(b) plans, and IRAs. These distributions are not subject to the 10% early distribution penalty applicable to in-service distributions made before age 59-1/2, and may be repaid, in one or more contributions, within three years. In addition, income taxes may be paid ratably over three years. A coronavirus‑related in-service distribution may be made to an individual:

  • Who is diagnosed with COVID-19;
  • Whose spouse or dependent is diagnosed with COVID‑19;
  • Who experiences adverse financial consequences as a result of being quarantined, furloughed, laid off, having work hours reduced, being unable to work due to lack of child care, closing or reduced hours of a business owned and operated by the individual; or
  • Other factors determined by the Secretary of the Treasury.

The plan administrator may rely on an employee’s certification that the employee satisfies the eligibility requirements in determining whether any distribution is a coronavirus-related distribution.

Implications for Employers. Employers should contact their plan recordkeeper as soon as possible if they wish to implement these coronavirus-related in-service distributions, including preparation and distribution of participant communications. Some recordkeepers are already reaching out to their clients. Both of these changes appear to be optional, and it looks like employers may add the coronavirus-related in-service distributions without also allowing repayments.


2. Loans from Qualified Plans. The CARES Act temporarily increases the maximum loan limit and temporarily extends the repayment period for any plan loan, whether or not coronavirus‑related. The maximum permissible loan is temporarily increased for six months to the lesser of:

  • $100,000 (versus the current $50,000) reduced by the amount of any outstanding loan; 
  • or The participant’s account balance (versus the current 50% of the participant’s account balance).

For each individual outstanding loan repayment that is due by December 31, 2020, the repayment date is delayed for one year, even if such delay results in a loan repayment after the end of the statutory five‑year loan repayment period. The existing loan repayment schedule, however, must be adjusted to reflect the delay and interest continues to accrue from the date the payment was originally due through the actual repayment date.


Implications for Employers. Again, employers will need to work with their plan recordkeeper to get these temporary loan provisions implemented, including preparation and distribution of participant communications. Loan procedures may also need to be updated. Some recordkeepers have already begun contacting their clients. While increasing the maximum loan limit appears to be optional, the one year payment delay for current outstanding loans appears to be required.


3. Waiver of Required Minimum Distributions for 2020. Under the CARES Act, the required minimum distribution (“RMD”) requirements for calendar year 2020 are waived for 401(k) plans, 403(a) plans, 403(b) plans, government‑sponsored 457(b) plans, and IRAs. 


Implications for Employers. The CARES Act waiver applies to anyone with an RMD due in 2020, including those who turned age 70-1/2 in 2019 with a required beginning date of April 1, 2020. Even though the RMD requirements are waived, a participant may still elect to take a distribution, which can be more or less than the amount that would have been required by the RMD rules. If a participant elects to take a distribution during 2020, the portion of the distribution that would have otherwise been an RMD is not an eligible rollover, so the Code Section 402(f) special tax notice does not need to be provided unless the participant elects a distribution of more than what would have otherwise been an RMD. Additionally, the CARES Act RMD waiver for 2020 does not affect the effective date of the SECURE Act change in the age at which RMDs must begin (age increased from 70-1/2 to age 72 for individuals who had not reached age 70-1/2 by December 31, 2019). The changes in the RMD rules appear to be required.  


4. Plan Amendments. Generally, plan amendments for implemented changes are not needed until the last day of the first plan year beginning on or after January 1, 2022 (for calendar year plan years, the deadline is December 31, 2022). Government plans will have until the last day of the first plan year beginning on or after January 1, 2024, to be amended. The CARES Act further provides that any amendment adopted to implement RMD waivers for 2020 will not be a prohibited cutback in violation of the Code’s anti-cut back rules.


Implications for Employers. Employers have plenty of time to adopt amendments reflecting the retirement plan changes made by the CARES Act, but the plan must be operated as in accordance with the change the employer implements in the meantime. We have specified which provisions we think are optional and which we think are required. Until the IRS gives some clarity on this, however, employers will need to coordinate with their recordkeeper and make good faith decisions.


Single-Employer Defined Benefit Plan Funding Rules

1. Payment Delay. The CARES Act delays payment of any defined benefit plan minimum required contributions otherwise due (including quarterly contributions) during calendar year 2020 to January 1, 2021. The amount of each such minimum required contribution must be increased, however, for any interest accruing from the original due date for the contribution through the payment date, at the effective rate of interest for the plan and for the plan year that includes the payment date.


Implications for Employers. This delay in the defined benefit plan minimum funding requirements should assist those employers facing cash flow issues caused by the COVID‑19 crisis. This temporary delay is optional, however.


2. Benefit Restriction Status. A plan sponsor may elect to treat the plan’s adjusted funding target attainment percentage (AFTAP) for the last plan year ending before January 1, 2020, as the AFTAP for plan years that include calendar year 2020. 


Implications for Employers. This relief may prevent a defined benefit plan from becoming subject to funding-based benefit restrictions. Under those restrictions, if a plan’s AFTAP falls below 80%, certain restrictions apply, such as the ability to make lump sum payments. (Warner Norcross + Judd)



FAQs


1. An employee reports to work with a bad cough and/or fever. What questions can HR or a manager ask of this employee?

Managers can accidentally violate the Americans with Disabilities Act if the query delves into the worker's medical history. The EEOC has posted a notice detailing what employers should know. The federal agency advised that ADA and Rehabilitation Act rules continue to apply, but they do not interfere with or prevent employers from following the guidelines and suggestions made by the CDC about steps employers should be taking.  

The EEOC references its guidance for pandemic flu situations for how to handle the current situation with Coronavirus. ADA-covered employers may ask the employees if they are experiencing influenza-like symptoms, such as fever or chills and a cough or sore throat. However, all information gathered about an employee illness must be maintained as a confidential medical record in compliance with the ADA.

"There is that line there with the ADA as to the types of questions you can ask," Nathan Schacht of Baker Hostetler said. "You can certainly ask someone how they're feeling and see what their response is to that. But employers need to be very careful to not cross the line and ask those questions that could get into the disability zone." (Source: ASE)


2. Can HR send an employee home who comes to work sick?

Yes. The CDC states that employees who become ill with symptoms of illness at work during a pandemic should leave the workplace. According to the EEOC, advising such workers to go home is not a disability-related action if the illness is akin to seasonal influenza or the 2009 spring/summer H1N1 virus, etc. Additionally, the action would be permitted under the ADA if the illness were serious enough to pose a direct threat to both the employee or other employees. (Source: ASE)


3. A public emergency is declared, and work is canceled as a result. Do workers have to be paid?

It depends. One consideration for employers if exempt or non-exempt employees can't physically make it to their usual workplace is whether they can telecommute, and therefore must be paid the same as if they were physically in the office. But the issue becomes more complicated if workers are stuck at home with no work being performed.

If employees are non-exempt, they generally are only paid for time worked. Therefore, if they are not working, they do not have to be paid. Employers could require, similar to a shutdown, that employees use PTO during this time. Yet, employers need to understand that the Michigan Paid Sick Leave may be applicable as well because the time off is due to a health scare. 

For exempt employees, they do not have to be paid if the business is closed for five business days or longer. Michigan Paid Sick Leave may also come into play since this is a health emergency. However, if they work one day in a week and there is no telecommuting options possible, they will have to be paid for the full week. In addition, if they telecommute or work using their phones (emails or taking calls) they will have to be paid. (Source: ASE)


4. Are we required to restore employees returning to work after a furlough to their original positions?

Unless an employee was out on job-protected leave, such as FMLA or EFMLA, you are not required to return them to their original position or to an equivalent one (or bring them back at all). Given the impact of COVID-19 on business operations across the country, it’s not surprising that organizations may need to restructure their teams to stay afloat or remain competitive. That said, if employees who were furloughed or laid off are asked to come back to a job that feels to them like a demotion, they may be less inclined to accept the offer or may be less engaged in the new role than they were in their previous job.

If you need to restructure their position, it will be helpful to explain why that was necessary. People are generally much more accepting of change if they understand it, and less likely to claim discrimination if you’ve given them your business-related reason for the decision. (Source: ThinkHR, June 15th, 2020)