Recent Legislation Related to the COVID Pandemic
The ongoing pandemic has spawned the need for new legislation to assist those adversely affected. The following capsules relate to health benefit plans.
American Rescue Plan Act – COBRA Subsidies and Dependent Care FSA Limit Increase
COBRA: This Act provides for a 100 percent subsidy of COBRA premiums — from April 1 through September 30, 2021 (unless extended) — for individuals who originally lost coverage owing to an employee’s involuntary termination of employment or reduction in hours and who are not eligible for Medicare or other group health plan coverage. The subsidy will end before September 30, 2021 for an individual whose COBRA period would have otherwise expired earlier or who becomes eligible for Medicare or other group health plan coverage. The Act also provides an extended election period for certain individuals to elect or reinstate COBRA effective April 1, 2021 in order to take advantage of the subsidy. Employers will be able to claim a federal tax credit equivalent to the amount of COBRA premiums that were not paid owing to the subsidy.
Dependent Care FSA: The dependent care FSA limit has been temporarily increased from $5,000 to $10,500 ($2,500 to $5,250 if married and filing separately), for calendar year 2021. This voluntary provision applies only to the 2021 calendar year, regardless of the Section 125 plan year. Employers must adopt the midyear election change option under the Consolidated Appropriations Act in order to allow participants to increase their dependent care FSA elections.
EBSA Disaster Relief Notice 2021-01
The Outbreak Period under 2020 guidance, which continues until 60 days after the announced end of the COVID-19 National Emergency, is a period that must be disregarded for certain plan-related deadlines (i.e., elect or pay for COBRA coverage, exercise a special enrollment right, or file a claim or appeal). This tolling period began 3/1/20, but is expressly limited by statute to one year. Under the 2021 relief, the tolling period will be applied on an individual basis, meaning the deadline will be tolled until the earlier of (a) one year from the date an individual was first eligible for relief, or (b) 60 days after the announced end of the National Emergency (the end of the Outbreak Period, which is ongoing). Every plan participant who was subject to a deadline that expired March 1, 2020 or later will have until the one-year anniversary of that deadline to take the required action, unless the Outbreak Period ends sooner. That is, the plan should calculate the due date for the applicable deadline and add one year.
Consolidated Appropriations Act, 2021 – Mental Health Parity
This Act imposes new requirements on group health plans to ensure compliance with the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA), which prevents group health plans that provide mental health or substance use disorder (MH/SUD) benefits from applying more restrictive financial requirements or treatment limitations to these benefits than those that apply to medical/surgical benefits. The MHPAEA currently requires parity between quantitative treatment limitations – such as deductibles and co-payments – and non-quantitative treatment limitations (NQTLs) – such as prior authorization, step therapy, medical necessity review, and other limitations not tied to a number. The new requirements under the CAA focus on NQTLs and require a written comparative analysis upon demand by the federal government, effective as of February 10, 2021. ASR will perform the comparative analyses for our clients and include them in their Compliance Documents.
If you have questions on this guidance, call ASR Health Benefits at (616) 957-1751 or (800) 968-2449.