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The COVID-19 global pandemic at times can seem like it is in the rearview, but certain laws, regulations, and agency guidance remain in effect and will continue to apply for the foreseeable future. This point has been highlighted twice this year when President Biden extended the National Emergency until March 1, 2023, as well as when the Secretary of Health and Human Services (HHS) recently extended the existing public health emergency related to COVID-19 for 90 days to January 11, 2023.
The ninth extension of the public health emergency from its initial declaration in January 2020 bridges the midterm election cycle and the end of the benefits year for calendar year plans. Though Secretary Becerra could end the public health emergency earlier, he has previously announced that HHS will give 60 days’ advance notice prior to doing so.
Among other things, the extension means that group health plans will continue to be required to cover the costs associated with COVID-19 vaccinations under rules issued during the pandemic. Currently non-grandfathered plans must cover the cost of approved vaccines with no cost-sharing requirements (including a reasonable rate for non-network providers). However, at the end of the public health emergency, such plans will be permitted to limit coverage to in-network providers. Plan sponsors will need to carefully monitor HHS announcements going forward to take necessary steps to amend plan documents and SPDs to account for any planned changes to how their plans will cover vaccines.
Extended Plan Deadlines
Until the Biden administration declares an end to the National Emergency, plans will continue to have to permit extended deadlines for actions including COBRA elections, HIPAA special enrollment periods, and plan claims and appeals procedures during the so-called Outbreak Period for COVID-19. The Outbreak Period will not end until 60 days after the end of the National Emergency.
Employers will need to keep in mind guidance that applies the extended deadlines to the earlier of one year from the date an individual or plan was first eligible for relief, or 60 days after the announced end of the National Emergency. This potentially will create multiple rolling deadlines impacting numerous plan participants.
Plan sponsors also should remember that the Employee Benefit Security Administration has previously announced that the guiding principle for administering employee benefit plans is to act reasonably, prudently, and in the interest of plan participants and beneficiaries. Plans and fiduciaries may wish to consider putting participants on notice that certain deadlines are expiring both during the National Emergency and when the Outbreak Period is about to expire.
Education Assistance Plan Student Loan Reimbursement
Another COVID-related benefit employers can continue through 2025 is reimbursing the costs of student loans through a qualified education assistance plan under Code section 127. Section 127 plans historically had been limited to reimbursing certain qualifying education expenses related to tuition, books, and related fees. However, the CARES Act in 2020 expanded the list of permitted reimbursable expenses to include qualifying student loans, and the Consolidated Appropriations Act, 2021 (CAA) extended the student loan provision through 2025. As a result, employers who establish and properly administer a bona fide section 127 plan can reimburse up to $5,250 annually in student loans.
Employers can adopt or expand a Section 127 plan to include student loan repayment assistance but must do so according to IRS rules. An education assistance plan must be formalized in writing and must:
- Be limited to tuition, fees, and textbook expenses for any educational course taken by the employee, regardless of whether it is related to the employee’s job.
- Exclude reimbursements for education involving sports, games, or hobbies, as well as meals, lodging, transportation, and any tools or supplies an employee may keep following the
- Limit loan repayment to principal or interest on any qualified education loan (i.e., a loan taken solely to pay qualified higher education expenses) incurred by the employee for their own education.
- Cap benefits at $5,250 per year (combined between tuition and loan repayment expenses).
- Not discriminate in favor of highly compensated employees or their
- Pay no more than 5% of the total amounts paid during the year to significant
- Reasonably notify eligible employees of the plan’s availability and terms, including, for example, any reasonable conditions such as required repayment if an employee terminates employment within a certain period after receiving reimbursement.
This information has been prepared for UBA by Fisher & Phillips LLP. It is general information and provided for educational purposes only. It is not intended to provide legal advice. You should not act on this information without consulting legal counsel or other knowledgeable advisors.