This blog post can also be found on our “Coronavirus Resource Center”.
The information in this article is current as of March 27th. Please consult additional Woodruff Sawyer articles as we present the most current information available to assist our readers.
In our March 19 webinar, Coronavirus: Supporting your employees, their benefits, and a legal perspective, we presented the latest information on the employee and legal aspects of COVID-19 affecting employers. Follow the link above to watch the recording. Although this information is changing daily, the webinar highlights what employers can do now to stay ahead of the curve.
Learn About Emergency Leave Acts Due to Coronavirus
Unfortunately, many companies are looking to make immediate changes in their staffing models due to coronavirus. Before making any changes, it is important to understand emerging federal laws that guide layoffs, sick leaves, and time off.
Get up to speed with the Families First Coronavirus Response Act’s (FFCRA) two new leave provisions: (1) Emergency FMLA Expansion, and (2) Emergency Paid Sick Leave.
- These two provisions (effective April 2, 2020) will apply only to employers with less than 500 employees.
- Employers contemplating laying off employees should consider these two provisions in addition to any other applicable employment law protections before making final (or temporary) decisions.
- If you are laying off employees you will need to consider the Worker Adjustment and Retraining Notification (WARN) Act at both the federal and state level where applicable. The National Law Review has an article here on the potential impact.
Address Critical Business Functions
Identify business critical functions and develop a backup plan.
If you have a Business Continuity plan in place, revisit this with key leadership for next steps to protect your business, data, systems, and money during the coronavirus pandemic.
As more people are working from home, you will also need to address the potential for cyber security issues. Please visit our article here for more information on critical gaps that need to be addressed.
Communicate with Your Insurance Carriers
Understand your HDHP plan expenses for COVID-19 testing versus treatment.
The IRS issued Notice 2020-15 which provides guidance about new exceptions for COVID-19 related expenses under a High Deductible Health Plan (HDHP). The IRS explained that any HDHP that provides coverage for COVID-19 related testing or treatment before an employee has fully met their minimum annual deductible, will not disqualify the status of the plan as an HDHP. This is a permissive provision, meaning that if an employer’s plan charges nothing or a reduced copayment for COVID-19 treatment, this generosity would not interfere with the ability to make HSA contributions.
This exception applies to COVID-19 treatments/visits that are done either in-person or through telemedicine. However, the IRS exception does not apply to all telemedicine visits, just the ones relating to treatment/diagnosis of COVID-19.
Note that all health plans of any size (regardless if fully-insured or self-insured) must provide COVID-19 testing free of charge (i.e., no cost-sharing) to individuals. However, treatment of COVID-19 can be subject to the health plan’s normal cost-sharing provisions.
If you have a HDHP plan, make sure the carrier you work with will provide a short-term waiver for all COVID-19 related telemedicine inquiries.
Telemedicine is a critical alternative for in-person medical care. If you have a telemedicine program, check whether your insurance carrier will be waiving the telemedicine copayment for Coronavirus testing related “visits.” But note that waiving telemedicine copayments for non-Coronavirus visits could jeopardize the HDHP if an employee has not yet satisfied his/her annual deductible requirement.
For furloughed employees or those with reduced hours, discuss a short-term grace period for premiums with your insurance carrier.
No one wants to lay off employees, so careful consideration of the impact to your plan (from a plan sponsor’s perspective) is critical. Some carriers may allow a mid-year special enrollment period later this year, along with a mid-year rate adjustment, so it’s important to understand what your carrier plans can do in the coming months.
Amend stop loss policies for COVID-19 testing without employee cost-sharing.
For self-insured plans, it is important to review your stop loss policies to confirm that COVID-19 testing will not have any participant cost-sharing, in order to comply with the newly enacted Families First Coronavirus Response Act (FFCRA). Coverage for testing may have differed among carriers prior to the passage for FFCRA on March 18, 2020.
Contact your broker for advice on your specific situation and plan design.
Events are emerging rapidly and your broker will need to be in close connection with you to understand the impact to your plan design.
Review your COBRA continuation coverage and administrative procedures
In the event that layoffs occur, you will need to ensure you are compliant with COBRA policies and procedures. Review your COBRA policies and connect with your COBRA administrator to get plans in place. Note that paying for your employee’s COBRA coverage could detrimentally impact their ability to receive subsidized individual coverage in the ACA Marketplace.
Communicate With Your Staff
Align culture and values.
Your company culture is defined by your values, which are critical during a crisis. Communicate your values and how they guide your actions. Even when people work remotely, they are under great stress and it’s never been more important to stay connected with your employees.
Over-communicate with your employees, especially about telemedicine.
If your plan includes a telemedicine option (like MDLive), encourage your staff to download the app and complete their medical profile as soon as possible. Telemedicine will be a lifeline in the event staff cannot or are not able to see a practitioner.
Amend the employee handbook with updated leave policies.
Employee leave policies are changing rapidly due to new Federal mandates. Make sure you update your leave policies so they are in accordance with federal, state, and local laws. Clearly communicate how these changes will impact employees and be prepared to go the extra mile to provide them with information for their unique situations.
If layoffs should occur…
No one wants to layoff their valued workforce, but many companies may need to take these steps. Before making that decision, consider:
- Reduced work hours: Furloughs or reduction in weekly hours (rather than layoffs that sever the employment relationship) may affect an employee’s ability to continue receiving plan benefits, so review your plan design rules before taking action.
- Preparing for exit interviews: Be thoughtful and communicative with employees if layoffs should occur and keep an open line of communication for the future. Follow your policy and procedures manual and provide all necessary documents.
- Compliance: Layoffs may trigger WARN acts at federal and state levels so review is necessary. See this article for details.
Stay calm and be informative.
Be informative, caring and sensitive to confidentiality. People are stressed and anxious; aim to reduce fear, anxiety and rumors.
Need more FAQ’s?
Jennifer Chung, ESQ, has created an ongoing FAQ for your latest questions, Employee Benefits Frequently Asked Questions About Coronavirus. Questions regarding special enrollment periods for DCSA and other issues can be found in this article.
Stay Informed About Coronavirus with Woodruff Sawyer Insights
At Woodruff Sawyer, we have created a special section of our website to provide you with immediate information on this challenging situation. Please visit our Insights resource page, Coronavirus: Your Business and People Risks for up to date information. If you are in need of a broker to assist you with these emerging issues, please reach out to your account manager or the Woodruff Sawyer Benefits practice at large.