Health and welfare programs serve as core building blocks of most organizations. They are used to attract and retain employees, as well as to help increase employee engagement. This year, in addition to the usual compliance and administrative challenges, employers have also been impacted by the dynamic regulatory and legislative guidance resulting from COVID-19.

Provided below are answers to some of the most frequently asked questions attendees submitted during the ADP webinar, Your Benefits Administration During Challenging Times, presented by Sushma Tripathi, Vice President of ADP's Strategic Advisory Services, and Virginia Neiswender, Senior Counsel for ADP's National Account Services.

Q: We are a company less than 50 employees. We have remote work capabilities. We can't take advantage of Families First Coronavirus Response Act (FFCRA) leave, correct?

A: According to the Department of Labor (DOL), employers with fewer than 50 employees may claim an exemption from providing leave under the FFCRA when the imposition of the need to offer leave would jeopardize the viability of the business as a going concern. This possible exemption applies only for leaves taken for school closures or lack of childcare, i.e. for emergency family leave (EFML) and for reason 5 for taking emergency paid sick leave (EPSL). For the other 5 possible reasons for EPSL, the small business exemption is not available.

To be eligible for this exemption, an authorized officer of the business must have determined that:

  1. The leave would result in the small business's expenses and financial obligations exceeding available business revenues and cause the small business to cease operating at a minimal capacity;
  2. The absence of the employee(s) would pose a substantial risk to the financial health or operational capabilities of the business because of their specialized skills, knowledge of the business, or responsibilities; or
  3. There are not enough workers who are able, willing, and qualified, and who will be available at the time and place needed, to perform the labor or services provided by the employee(s) requesting leave.

Employers wishing to take advantage of this exemption should not send any materials or documentation to the DOL, but rather should maintain the records themselves. Refer to the DOL website for additional resources to assist you with determining applicable of the requirements at: https://www.dol.gov/agencies/whd/pandemic.

Q: Please explain the March 4, 2020 DOL and Treasury regulatory change to disregard the 30-day Special Enrollment Period, versus later Section 125 mid-year pre-tax plan relief announced in May. Our pre-tax plan governs our Special Enrollment Periods. Which applies? Does non-Employee Retirement Income Security Act (ERISA) make a difference?

A: Plans not governed by ERISA or the Internal Revenue Code (Code) should refer to guidance issued by Health and Human Services under the Public Health Safety Act. As noted, the Final Rules issued on May 4 address timeframes established under both ERISA and the Code, including HIPAA Special Enrollment Rights. The guidance issued with respect to permitting mid-year elections for Section 125 plans (Notice 2020-29) is optional and does not eliminate or change the requirements under the Final Rules. Rather plans may permit mid-year elections when a mid-year election would not normally have been permitted under the current Section 125 regulations, provided the plan is amended by the deadline established in Notice 2020-29.

Q: But EFML also covers the employee if they are sick, correct?

A: Eligible employees may take EFML to care for a son or daughter whose school or place of care is closed, or child care provider is unavailable, due to COVID-19 related reasons. For an employee to take EFML, there must be a need for the employee to care for an individual, and the employee needs to be unable to perform work either at their normal workplace or by telework. EFML is not available in cases where an employer does not have work for the employee. Note that the rules under the Family and Medical Leave Act (FMLA) were not otherwise altered by FFCRA or the creation of the new leave reason.

Q: Are new hires eligible for paid sick leave?

A: All employees of covered employers are eligible to take EPSL under the FFCRA regardless of how long they have been employed by the employer, except that employers may decline to provide EPSL to emergency responders and health care providers as those terms are defined above. There are exceptions for employers with fewer than 50 employees.

More Information

Your Benefits Administration During Challenging Times: Launch this on-demand webcast anytime for insights into navigating benefits administration responsibilities and requirements during the time of COVID-19.

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