There’s never been a moment in recent history where access to healthcare and other employee benefits was quite so important. As we enter the predicted “surge week” here in the United States, HR and business leaders across the country are scrambling to determine how COVID-19 and the laws that have gone into effect this month will affect their employee benefits program.
The challenge is: everyone’s program and carrier are different, so there’s no one right answer to the question of “What does this mean for benefits?”
That means you’re likely going to have to work internally and with your benefits broker to figure out exactly how COVID-19, the FFCRA, CARES Act, etc. will impact your benefits program. With that said, however, we can provide you with some general guidance to ensure you’re asking the right questions, viewing your benefits through the right lenses, and doing everything you can to support your employees and continue your business in a compliant way.
In this post we’ll explore:
- Extension of benefits to cover COVID-19 care
- How your FSA grace period can spread out coronavirus-related expenses
- How special enrollment periods can help you connect employees with coverage right now
- What the FFCRA & CARES Act say about employee benefits
- The value of providing access to telemedicine as part of your benefits strategy
Benefit Extension During the Coronavirus Outbreak
Anytime you terminate an employee who is disabled or hospitalized or has a dependent who fits those criteria, benefits are generally extended until one of the following occurs:
- The terminated employee returns to work
- The terminated employee finds new work or access to coverage
- The terminated employee’s dependent/spouse is discharged from the hospital
Of course, with all the layoffs and furloughs surrounding the coronavirus outbreak, those requirements carry a heftier responsibility than ever before.
That means there is no benefit to terminating workers who are already away from the office due to COVID-19, as you will continue to remain liable for their family medical expenses. It’s not an advisable strategy to reduce your employee benefits program costs by terminating people.
Thanks to the Employee Retention Credit provided by the CARES Act, retaining those employees on FMLA leave may actually be advantageous in the long run, as they will decrease your tax burden.
Keep in mind that if you’ve already laid off employees, you’ll have to extend coverage to COBRA-eligible workers for up to 18 months if they don’t find new jobs.
Understanding the FFCRA’s Paid Leave Grace Period
The Families First Coronavirus Response Act significantly expanded paid leave for small and medium-sized employers, but it also provided a grace period of non-enforcement, which lasts through April 18th.
In essence, that means that employers cannot be punished for non-payment of employee leave until mid-month as long as they are acting in good faith and not delaying payments for reasons other than logistical constraints.
However, that doesn’t mean employers can negligently ignore the mandate until April 18th. If you’re dragging feet or waiting for the enforcement period to begin before playing by the rules, you could be putting your business at risk. The Department of Labor will be applying Sections 16 and 17 of the FSLA judiciously to minimize non-compliance and abuse of employees requesting leave at this time.
Leveraging Special Enrollment Periods
A special enrollment period represents any time where employees or individuals may enroll in health insurance outside of the typical renewal window.
While a national ACA special enrollment window has been shot down from legislation several times since the COVID-19 outbreak, several states have announced special enrollment periods for uninsured individuals and families looking to protect themselves during this crucial time.
If there’s a special enrollment period occurring in your state, it’s vital that you communicate that information to employees that previously opted-out of a healthcare plan and encourage them to get the care they need.
Encouraging Employees to Use Your FSA Grace Period Effectively
Flexible spending accounts, healthcare reimbursement accounts, and other benefits that help employees fight out-of-pocket healthcare costs generally need to be used within a given calendar or plan year. However, employees usually have a few extra months to make sure they use those funds before they disappear. For example, if your plan year ended on December 31, that means your grace period likely extended through mid-March.
If your benefits program plan year ended in mid-January or later, your employees are likely still able to incur FSA or HRA expenses for plan year 2019. That’s good for you because it means that the funds your employees and their families need to fight COVID-19 and stay healthy might already be allocated to them from the prior year.
If your plan year ended in November or December, your grace period is likely over, but employees can still use FSA and HRA expenses to pay for the medications, treatments, doctor’s visits, and so on they need to survive this time. For those lucky enough to have plan years starting between January and June, employees will be able to “double-dip” this year, significantly increasing their ability to meet out-of-pocket medical costs.
The Value of Telemedicine
Telemedicine (access to doctors via video conference, phone call, etc.) has grown significantly over the last decade, and if it’s a part of your employee benefits program as you’re reading this, you’re already going a long way to support your employees during this challenging time.
Telemedicine is powerful because it gets employees a doctor’s appointment without the need to travel to the doctor’s office. During this time of social distancing, that technology has the power to provide care for patients without exposing them to the COVID-19 health risks that will be present in most of our U.S. hospitals for months to come.
If you’re offering telemedicine to employees, you need to be sure they’re aware of it and are clear on how to access it. Communicate via email blast with your team to help them understand what services are available through telemedicine and how they can access them.
If you’re not currently providing telemedicine opportunities through your employee benefit offerings, now would be a perfect opportunity to talk to your benefits broker about how to maximize access to care while minimizing the need to visit a doctor’s office.
As we said when we began, there’s no one answer to the question of “How is COVID-19 affecting my employee benefits program, and how can my employee benefits program help affect change in the fight against COVID-19?” You need to dive deep into your program offerings and speak with your benefits broker to understand what this really means for your business.
In the coming days and weeks, however, it will be important for everybody to think about:
- Benefits extension: What will the real cost be of laying employees off while also continuing to support their benefits? Can we maintain our team and leverage the tax credits of the CARES Act to keep us afloat this year?
- The paid leave grace period: How will we be sure we’re fully compliant with FFCRA leave requirements by April 18?
- Special enrollment periods: Is there one in your area? Can you help previously unenrolled employees protect themselves through special enrollment?
- FSA/HRA grace periods: Does your plan year allow for employees to use both 2019 and 2020 funds to fight coronavirus? If sure, make sure they know.
- Telemedicine: Are you currently offering it? Do your employees know? How can you start offering it if you aren’t already?