DOL Introduces Six New Opinion Letters on FLSA and FMLA Compliance
On Aug. 28, 2018, the Department of Labor (DOL) introduced six new opinion letters addressing compliance with the Fair Labor Standards Act (FLSA) and the Family and Medical Leave Act (FMLA). These letters address issues such as:
- Compensability of time spent voluntarily attending benefit fairs and certain wellness activities
- “No-fault” attendance policies and roll-off of attendance points under the FMLA; and
- Organ donors’ qualification for FMLA leave.
The action steps an employer should take as a result of these letters will depend on each employer’s situation and policies. Because opinion letters are fact-specific guidance, employers in similar circumstances may want to review these opinion letters and consider making appropriate changes to their policies and practices. If circumstances are substantially different, employers may also request an opinion letter from the DOL.
Reminder—Benefit Notices for Open Enrollment
Employers that sponsor group health plans should provide certain benefit notices in connection with their plans’ open enrollment periods. Some of these notices must be provided at open enrollment time, such as the summary of benefits and coverage (SBC).
Other notices, such as the Women’s Health and Cancer Rights Act (WHCRA) notice, must be distributed annually. Although these annual notices may be provided at different times throughout the year, employers often choose to include them in their open enrollment materials for administrative convenience.
Employers should review their open enrollment materials to confirm that they accurately reflect the terms and cost of coverage. In general, any material modifications or amendments to plans should be communicated to plan participants either through an updated summary plan description (SPD) or a summary of material modifications (SMM). Download this chart that summarizes the benefit notices employers should provide at open enrollment time.
Final Regulations Expand Exemptions from the Contraceptive Mandate
On Nov. 7, 2018, the DOL, Health and Human Services (HHS) and the Treasury (Departments) finalized two rules expanding certain exemptions from the contraceptive coverage mandate under the Affordable Care Act (ACA).
- The first final rule expands the exemption for employers that object to providing contraceptive coverage based on their sincerely held religious beliefs.
- The second final rule provides an exemption for certain employers that object to providing contraceptive coverage based on their non-religious moral convictions.
Under the final rules, a covered plan sponsor, issuer or plan will not be penalized for failing to include contraceptive coverage in the plan’s benefits. However, any entity that improperly claims an exemption may face fines and lawsuits for not complying with the contraceptive coverage mandate. See this guide for more information about organizations that are eligible for these exemptions.
Proposed Rule Would Expand Options for HRAs
On Oct. 23, 2018, the DOL, HHS and the Treasury issued a proposed rule that would expand the usability of health reimbursement arrangements (HRAs). This proposed rule was issued in response to a 2017 executive order directing federal agencies to expand access to HRAs.
The proposed rule would allow HRAs to be integrated with individual insurance coverage for purposes of compliance with the ACA, eliminating the existing prohibition on this type of arrangement. This means that HRAs could be used to reimburse employees for the cost of individual health coverage on a tax-preferred basis if the following conditions are met:
- The HRA must require that the participant and any dependents are enrolled in individual health coverage for each month that the individual(s) is covered by the HRA;
- A plan sponsor that offers an HRA integrated with individual health coverage to any class of employees may not also offer a traditional group health plan to the same class of employees;
- If a plan sponsor offers an HRA integrated with individual health coverage to any class of employees, the HRA must generally be offered on the same terms to all participants within the class;
- Participants must be allowed to opt out of and waive future reimbursements from the HRA at least annually (and, upon termination of employment, either the amounts remaining in the HRA are forfeited or the participant is allowed to permanently opt out of and waive future reimbursements); and
- The HRA must implement and comply with reasonable procedures to verify that participants and dependents are (or will be) enrolled in individual health insurance coverage for the plan year.
The rule is proposed to be effective for plan years beginning on and after Jan. 1, 2020. Comments on the proposed rule will be accepted until Dec. 28, 2018. In the meantime, employers can consider whether they could make use of these HRA options for employees.
Subscribe to Higginbotham emails for HR News Worth Review sent to your inbox monthly.