The Vita Blog February 2021

Summary: This applies to all employers offering medical plan coverage with a plan renewal date of January 1. The online disclosure must be completed by March 1, 2021 (assuming a calendar year medical plan contract).

Overview

Federal law requires that employers provide annual notification of the Medicare Part D Prescription Benefit "creditability" to employees prior to October 15th. However, that same law also requires plan sponsors to report creditability information directly to the Centers for Medicare and Medicaid Services (CMS) within 60 days of the first day of the contract year if coverage is offered to Part D eligible individuals. Many employers have a January 1 renewal plan year. So, for many employers, the deadline is in a couple of weeks! If your plan renews some time other than January 1, you have 60 days after the start of your plan year to complete this disclosure.

Mandatory Online Creditable Coverage Disclosure 

Virtually all employers are required to complete the online questionnaire at the CMS website, with the only exception being employers who have been approved for the Retiree Drug Subsidy (RDS). This disclosure requirement also applies to individual health insurance, government assistance programs, military coverage, and Medicare supplement plans. There is no alternative method to comply with this requirement! Please remember that you must provide this disclosure annually.

The required Disclosure Notice is made through completion of the disclosure form on the CMS Creditable Coverage Disclosure web page. Click on the following link: CMS Disclosure Form.

Employers must also update their questionnaire if there has been a change to the creditability status of their prescription drug plan, or if they terminate prescription drug benefits altogether.

Detailed Instructions and Screenshots Available

If you would like additional information on completing the online disclosure, a detailed instruction guide is available online. The instructions also include helpful screenshots so that you will know what data to have handy. More info here: CMS Notification Instruction Guide.

Helpful Tip for Vita's Clients

The Medicare Part D creditability status of your medical plans is outlined in the Welfare Summary Plan Description that we provide to all clients. Please refer to this document as you will need this information to complete the online disclosure. 

It’s 1095 season! The IRS has announced two new codes for the 2020 Form 1095-C for use with an Individual Coverage HRAs (ICHRA). The IRS website indicates that employers offering ICHRAs can use two previously reserved codes (from Code Series 1 on Form 1095-C, line 14) for reporting offers of coverage for 2020:

Code 1T: This code indicates that an ICHRA was offered to an employee and spouse (not dependents) and that affordability was determined using the employee’s primary residence zip code.

Code 1U: This code indicates that an ICHRA was offered to an employee and spouse (not dependents) and affordability was determined using the employee’s primary employment site zip code under an affordability safe harbor.

This change corrects an oversight in the 2020 Form 1095-C code options. The existing code options did not address all the potential coverage options for an ICHRA. Specifically, codes for three coverage possibilities were available, but the scenario where ICHRA coverage was offered to an employee plus a spouse (without dependents) was not covered by the available code options. This update corrects that omission.

Little has been said lately about how to handle required employment and legal notices in remote work arrangements. Historically, requirements for notification of employee rights have been satisfied by placing gigantic rights notification posters on bulletin boards, in break rooms, and where employees gather for lunch. This practice was put in place long before the digital age and is outdated for a substantial portion of today’s workforce, especially given the migration to remote work for many employees in the COVID era.

Overview

The DOL recently released guidance on complying with notice and posting requirements in remote work environments. Specifically, the guidance clarifies when employers may disseminate poster information exclusively in electronic form, when it can be simply “posted” electronically, and when it needs to be “pushed” directly to employees. Across the board, federal, state, and local laws require employers to post notifications “in a conspicuous location” as the means of notifying employees of their rights under various laws. Even recently passed laws have failed to define any electronic distribution alternatives.

One-and-Done vs. Continual Posting

The guidance to distinct categories of notification:

• Notices that must be continually posted (FLSA and FMLA posters)
• Notices that may be provided once to each employee individually (Service Contract Act posters), typically via email.
  
  

Continuous Posting Requirements

Several of the statutes require that employers “post and keep posted” these notices indefinitely and thus, do not permit employers to meet their notice obligations through a direct mailing or other single notice to employees. In this case, the regulations consider electronic posting an acceptable substitute for the continuous posting requirement if:

• All of the employer’s employees exclusively work remotely,
• All employees customarily receive information from the employer via electronic means, and
• All employees have readily available access to the electronic posting at all times.

This ensures the electronic posting satisfies the statutory and regulatory requirements that such postings be continuously accessible to employees.

Where an employer has employees on-site and other employees teleworking full-time, hard copy posting is still required for on-site employees. The employer may supplement a hard-copy posting requirement with electronic posting. The guidance encourages both methods of posting.

Posting Notices Electronically

If an employer seeks to meet a worksite posting requirement through electronic means, such as an intranet software, website, or shared network drive, the electronic notice must be “as effective as” a hard-copy posting.

As a number of the statutory provisions below require that affected individuals be able to readily see a copy of the required postings, where an employer chooses to meet a worksite posting requirement through electronic means, the same requirements apply in the electronic format. As a practical matter, a determination of whether affected individuals can readily see an electronic posting depends on the facts. The guidance outlines that electronic posting on a website or intranet is not a sufficient means of providing notice if an employer does not customarily post notices to affected employees or other affected individuals electronically.

Posting on an unknown or little-known electronic location has the effect of hiding the notice, comparable to displaying a hard-copy of the required notice in a custodial closet or storage room. Such postings would be considered insufficient.

Key E-Posting Requirements

All posted notifications must be “readily available” for workers which means employees have direct and easy access to the notice. Specifically, employees should not have to request permission to access a web posting or a posting on a shared network drive. Lastly, employers must inform employees where the e-posts are located and provide instructions on how to access them electronically. In short, common sense rules the day for e-posting. An electronic post should as conspicuous and as easy for employees to access as a lunchroom poster.

Job Applicants

For laws that require posters be visible to job applicants (such as the Employee Polygraph Protection Act), electronic-only posting is permitted if the hiring process is conducted remotely, and applicants have readily available access to the electronic posting at all times.

State and Local Laws

The DOL guidance applies only to federal notice and posting requirements. However, there are many state and local posting requirements, as well. For example, California law requires employers to post information related to minimum wage laws, discrimination and harassment, and medical leave and pregnancy disability leave. While there is no specific state-law guidance at this time, employers would do well to mirror federal electronic posting standards for remote employees to assure that required access to information is maintained for remote workers.

Resources

Following is the link to the DOL Field Assistance Bulletin: https://www.dol.gov/sites/dolgov/files/WHD/legacy/files/fab_2020_7.pdf