DOL Updates Model FMLA Forms
The Department of Labor (DOL) recently released updated model forms to help employers administer employee leaves under the Family and Medical Leave Act (FMLA). The DOL’s model FMLA forms contain an expiration date in the upper right corner. The expiration date relates to a regulatory approval process; it does not relate to the forms’ actual content. Every three years, the DOL must submit its model FMLA forms to the federal Office of Management and Budget (OMB) for approval for continued use.
The DOL’s model FMLA forms expired earlier this year, on May 31, 2018. The DOL extended the forms’ expiration date on a month-to-month basis while it waited for the OMB's approval to release updated forms. After receiving the OMB’s approval, the DOL released the updated model forms, which contain a new expiration date of Aug. 31, 2021.
Employers that use the model FMLA forms should start using the DOL’s updated models as soon as possible. Although no substantive changes were made to the updated FMLA forms, they contain a new expiration date. The updated model FMLA forms are available on the DOL’s FMLA webpage.
IRS Paves the Way for 401(k) Contributions for Student Loan Payments
The IRS has issued a favorable private letter ruling on an employer’s proposal to reward student loan repayments with nonelective contributions to a 401(k) plan. The employer’s 401(k) plan currently provides a matching contribution for elective contributions (i.e., elective deferrals, designated Roth contributions or after-tax contributions). Those matching contributions are made each payroll period. Under the proposal, employees enrolled in the program would give up their right to the plan’s regular matching contribution and instead receive a nonelective contribution for pay periods in which they made student loan repayments over a certain percentage of income, regardless of whether they made any elective contributions. For pay periods in which they did not make a sufficient student loan payment to earn the nonelective contribution, enrolled employees would still get the matching contribution if they made elective contributions. The employer submitting the request specifically asked the IRS whether the proposed payments would violate existing regulations that prohibit plans from making benefits (other than permitted matching contributions) contingent on electing to make or not make elective contributions.
The IRS’s response observes that while the nonelective contributions for enrolled employees are conditioned on whether they make a sufficient student loan repayment, they are not directly or indirectly conditioned on the making of elective contributions under the plan because employees do not have to stop making elective contributions to obtain the student loan repayment benefit. Consequently, existing regulations would not be violated by the employer’s proposal. The ruling states that it is based on the assumption that the employer would not extend any student loans to employees who will be eligible for the program.
This ruling showcases a novel approach to the problem of student debt that will allow this employer to reward its employees for reducing their student debt without substantially increasing the employer’s costs, apart from administration and any increased utilization. And cash-strapped employees who can’t afford to pay their student debt and make elective contributions will be able to grow their 401(k) account balances and reduce their student debt at the same time by redirecting their funds from contributions to student loan payments. Employers who wish to do similar will still need to navigate a variety of practical issues, including the substantiation of student debt amounts and employees’ loan payments, and they should keep in mind that the IRS’s ruling/approval is limited only to the facts presented in this case, specific to this employer.
More States Passing "Balance Billing" Legislation
Last year, Texas passed SB507, which updated a 2009 law that allows patients to fight charges through a program managed by the Texas Department of Insurance. A 2015 update reduced the size of the bill that patients could contest, dropping the amount from over $1,000 to over $500. The 2017 update made further enhancements, including: participants’ rights in contesting medical bills that come from any out-of-network provider working at a hospital that is in-network for their health policy; submitting bills from out-of-network hospitals in emergency situations; and the ability to include bills from freestanding emergency rooms and facilities that offer emergency care but are not attached to a hospital.
Now, other states have taken, or are taking, similar steps (if not going further). Virginia has a balance billing law that is expected to go into effect in 2019, while New Jersey and Oregon have laws that went into effect this year. New Jersey’s law, for example, allows self-funded plans to opt-in or opt-out. If a plan opts in, its participants would not be balance billed for out-of-network charges for emergency care in excess of the deductible, copayment or coinsurance amount applicable to in-network services, and the plan can take advantage of the act’s binding arbitration provisions. Plans that opt-in would need to amend their plan documents to reflect this change.
A self-funded plan that does not opt-in would not need to do anything (if the plan does not opt-in, its participants may be balance billed for out-of-network treatment). If the provider and a participant do not resolve a payment dispute within 30 days after the participant has been sent a bill, the participant or provider may initiate binding arbitration to determine payment for the services.
Employers that have self-funded plans will want to check with their ASO provider, or TPA, to determine which states have such provisions and what steps, if any, those employers would need to take in those states.
2019 Open Enrollment Checklist
Finally, as we prepare for the 2019 open enrollment season, please download the 2019 Open Enrollment Checklist to make sure your plan is up to date with the most recent mandated plan-design requirements.
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