By Greta Cowart
The Coronavirus Aid, Relief And Economic Security (CARES) Act and the Setting Every Community Up for Retirement Enhancement (SECURE) Act both made changes to required minimum distribution rules. The SECURE Act changes the age at which required minimum distributions must begin to age 72, effective after December 31, 2019. The CARES Act then permitted employees to waive receipt of the required minimum distributions and permitted individuals to rollover such distributions received in 2020.
However, while this can sound simple, the required minimum distribution rules are complex and such changes require consideration of the complex rules. Plan sponsors are left with some confusion regarding how to implement these rules. The Internal Revenue Service provided guidance and choices for employers and plan sponsors in implementing the new required minimum distribution rules on Tuesday. The CARES Act also provided employees or participants an option to not take the required minimum distribution in 2020 and to potentially roll it back into the plan. Plan sponsors will need to consider whether they want to except various different types of required minimum distribution rollovers as part of the amendments to comply. The Internal Revenue Service provided a model amendment form in the appendix to Notice 2020-51. Because employees will be faced with addressing the required minimum distributions already paid before the option to waive payment during 2020, employers may want to consider the choices offered in Notice 2020-51 with respect to plan design decisions on rollovers of certain required minimum distributions.
The Families First Coronavirus Response Act and the CARES Act are also the subject of additional guidance coming from the US Department of Labor, Department of Health and Human Services, and Department Of Treasury in a set of frequently asked questions issued on Tuesday. The FAQs address the coverage mandates for COVID-19 testing and how health plans can determine the scope of the COVID testing that must be covered and how claims in various settings must be paid considering other mandates such as the Patient Protection and Affordable Care Act (the “ACA”). This applies to all self-insured group health plans, both insured and self-insured, that are not grandfathered, other than retiree only plans as clarified in prior guidance. The guidance goes into coverage requirements in the event the diagnostic testing is provided in an emergency room, and also considers the ACA’s mandated reimbursements for coverage of emergency room care. Additional guidance is also provided regarding telehealth coverage under the CARES Act and others in remote care services. In addition the scope of “substantially all” and “predominant” tests for satisfying the financial requirements under the Mental Health Parity and Addiction Equity Act are also clarified.
Guidance also provided relief related to wellness programs that use as a standard or a reasonable alternative for obtaining a reward and the fact that the wellness program standards may be difficult to meet as a result of the COVID-19 pandemic restrictions in a public health emergency. If a plan decides to waive wellness requirements due to the COVID-19 public health emergency that same waiver must be provided to all similarly situated individuals. It is important to note that the EEOC still has not issued new wellness program regulations following the federal courts overturning the EEOC’s prior wellness program regulations limiting rewards to 30% of the premium for single only coverage as a proxy for keeping the wellness program “voluntary” under the Americans with Disabilities Act. So while wellness program requirements can be waived for all similarly situated individuals under this guidance, there may still be more changes coming for wellness programs.
Greta E. Cowart has counseled employers for more than 30 years on best practices in human resources and employee relations issues related to benefits and executive compensation. In her practice, Greta routinely develops strategies for effective administration of claims and other disputes, including defense of grievances, and in litigation considering implications under ERISA, while also considering applicable labor and employment laws. Greta also provides fiduciary training and review of fiduciary operations to improve the documentation of the fiduciary process. Greta is a former chair of the Employee Benefits Committee of the ABA Section of Taxation, and has served on the U.S. Department of Health and Human Services CHIP Working Group.
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