Federal Compliance Update

Federal Pregnancy and Lactation Accommodations Expanded

While federal employment law changes are generally few and far between, the budget bill that was just passed by Congress and signed by the President includes two sections that provide new protections for pregnant and lactating employees and applicants.

Pregnant Workers Fairness Act

Employers with 15 or more employees must now accommodate employees’ and applicants’ known limitations related to pregnancy, childbirth, or related medical conditions unless it would create an undue hardship. Employers also cannot take any adverse action against an employee or applicant for requesting or usingan accommodation.

Previously under federal law, employers generally only had to provide reasonable accommodations for pregnant employees and applicants if they also provided accommodations to other employees who were similar in their ability or inability to work. Note that many state laws already went above and beyond federal law in requiring accommodations for pregnant employees.

This new law will take effect in June 2023.

Lactation Accommodations

The “Providing Urgent Maternal Protections for Nursing Mothers Act,” or PUMP Act, expands the current federal requirements for providing employees with time and space to breastfeed or pump at work to nowcover exempt employees. Previously, only nonexempt employees were covered.

This law applies to employers of all sizes but (still) has an exception for employers with fewer than 50 employees if they can show that providing accommodations would cause an undue hardship.

How the End of the COVID-19 Emergency Periods Will Impact Health Plans

The Biden Administration has announced its plan to end the COVID-19 national emergency and public health emergency (PHE) on May 11, 2023. Employer-sponsored health plans have been required to comply with certain coverage requirements during the COVID-19 emergency periods, including the following:

• Health plans must cover COVID-19 diagnostic tests and related services without imposing any cost sharing (such as deductibles, copayments or coinsurance) during the PHE; and
  
• Non-grandfathered health plans must cover certain preventive services, including recommended COVID-19 vaccines and boosters, without cost sharing. During the PHE, this coverage mandate applies to COVID-19 immunizations provided by all providers, regardless of whether they are in- network or out-of-network.

In addition, during the COVID-19 outbreak period (which is tied to the national emergency), certain health plan deadlines are extended, including the deadlines to request special enrollment under HIPAA, elect COBRA continuation coverage and comply with the plan’s claims and appeals procedures.

Impact on Health Plans

When the PHE ends, health plans will no longer be required to cover COVID-19 diagnostic tests and related services without cost sharing. Health plans will still be required to cover recommended preventive services, including COVID-19 immunizations, without cost sharing, but this coverage requirement will be limited to in-network providers. In addition, once the COVID-19 outbreak period ends, health plans can go back to their nonextended deadlines for purposes of HIPAA special enrollment, COBRA continuation coverage, and claims and appeals procedures.

Health Plan Changes

When the PHE ends, the following health plan coverage rules related to the COVID-19 pandemic will no longer apply:

• COVID-19 Diagnostic Testing Without Cost Sharing—During the PHE, health plans and health insurance issuers must cover COVID-19 tests and related services without imposing any cost sharing or prior authorization or other medical management requirements. As of Jan. 15, 2022, this coverage requirement extends to at-home COVID-19 diagnostic tests. Health plans and issuers will no longer be required to provide this first-dollar coverage when the PHE ends.
• COVID-19 Vaccines—Out-of-Network Providers—Non-grandfathered group health plans and health insurance issuers must cover coronavirus preventive services, including recommended COVID-19 immunizations, without cost sharing requirements. During the PHE, covered services may be provided by in-network or out-of-network providers. Once the PHE ends, health plans and issuers must continue to cover recommended COVID-19 immunizations without cost sharing but can limit this coverage to in-network providers.
• Standalone Telehealth Benefits—For plan years beginning during the PHE, a large employer (more than 50 employees) may offer standalone telehealth benefits and other remote care services to individuals who are not eligible for coverage under any other group health plan offered by the employer without violating the Affordable Care Act’s market reforms. These types of standalone arrangements will not be permitted after the PHE ends.

NATIONAL EMERGENCY – OUTBREAK PERIOD

Various deadlines related to employer-sponsored group health plans are extended during the COVID- 19 outbreak period.

On Jan. 30, 2023, the Biden Administration announced its plan to end the COVID-19 national emergency on May 11, 2023. Under this timeline, the outbreak period will end on July 10, 2023.

Deadline Extensions

During the outbreak period, some key deadlines for employee benefit plans and participants are extended. Deadline extensions that apply during the outbreak period include the following:

• HIPAA Special Enrollment—The 30-day period (or 60-day period, if applicable) to request special enrollment.
• COBRA Notice and Premium Payment Deadlines—The 60-day period to elect COBRA coverage; the date for making COBRA premium payments (generally at least 45 days after the day of the initial COBRA election, with a grace period of at least 30 days for subsequent premium payments); and the date for individuals to notify the plan of a qualifying event or
  

disability determination (generally 60 days from the date of the event, loss of coverage or disability determination).

• Claims and Appeals Deadlines—The deadlines to file a benefit claim, file an appeal of an adverse benefit determination or request an external review of a claim under the plan’s claims and appeals procedures.

Under the relief, these deadline extensions end when the outbreak period is over or, if earlier, after an individual has been eligible for a specific deadline extension for one year.

PRE-DEDUCTIBLE TELEHEALTH COVERAGE

In response to the COVID-19 pandemic, the Coronavirus Aid, Relief and Economic Security (CARES)  Act allowed high deductible health plans (HDHPs) compatible with health savings accounts (HSAs) to provide benefits for telehealth or other remote care services before plan deductibles were met. This relief was not linked to the PHE or outbreak period; rather, it applied for plan years beginning before Jan. 1, 2022. A spending bill extended this relief to telehealth services provided in months beginning after March 31, 2022, and before Jan. 1, 2023.

The Consolidated Appropriations Act, 2023 (CAA), which was signed into law on Dec. 29, 2022, extends the ability of HDHPs to provide benefits for telehealth or other remote care services before plan deductibles have been met without jeopardizing HSA eligibility. This extension applies for plan years beginning after Dec. 31, 2022, and before Jan. 1, 2025. Thus, regardless of when the COVID-19 emergency periods end, HDHPs may be designed to waive the deductible for any telehealth services for plan years beginning in 2023 and 2024 without causing participants to lose HSA eligibility.

This Compliance Bulletin is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice. ©2023 Zywave, Inc. All rights reserved.

Federal: IRS Increases Mileage Reimbursement Rate

The Internal Revenue Service (IRS) has announced that its optional standard mileage rate will increase to 65.5 cents per mile driven for business purposes. The increase takes effect on January 1, 2023.

Use of this rate is optional for private employers, though it is widely used as a standard rate for calculating mileage reimbursement for employees who use their personal vehicles for business purposes.

Action Item

If your organization uses the IRS rate to calculate mileage reimbursement, be sure to update your systems to account for this change.

(The IRS released IR-2022-234 on December 29, 2022)

State Compliance Update

Colorado Requires Contributions for Paid Family and Medical Leave on January 1: Compliance Reminder

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Colorado’s paid Family and Medical Leave Insurance Program (FAMLI) will launch next year. FAMLI benefits include partial wage replacement, job protection, and continuation of group health care coverage. FAMLI is funded by payroll contributions and is administered by the FAMLI Division (part of the Colorado Department of Labor and Employment). Employers do not pay the monetary benefits directly to employees.

Employers must start withholdings on January 1, 2023. Employees can take FAMLI leave starting on January 1, 2024. The FAMLI Division has a web page with FAQs, toolkits, videos, and other resources for employers.

Coverage

FAMLI applies to most employers and employees in Colorado. Those who are self-employed are not required to participate but can opt in.

Contributions

Employers are responsible for sending contributions to FAMLI. For 2023 and 2024, the contribution rate is 0.9% of each employee’s wages, up to the Social Security wage base (currently estimated to be

$155,100 in 2023, which would be a max contribution of $1,395.90). If you have nine or fewer employees, then your employees pay half the contribution amount. and you pay nothing. If you have 10 or more employees, then you pay 50% and your employees pay 50% of the contribution.

Employee Eligibility

The state will determine an employee’s eligibility when they apply. To be eligible for FAMLI, an employee must have earned $2,500 in Colorado during their base period. To be entitled to job protection and continuation of health care coverage, the employee must have worked for the employer for at least 180 days before taking leave.

Amount and Reasons for Leave

Eligible employees may take up to 12 weeks of FAMLI leave per year for family, medical, qualifying exigency, or safe leave. Employees can take an additional four weeks for pregnancy-related complications.

Family leave is to care for a family member with a serious health condition or to bond with a new

child. Medical leave is for the employee’s own serious health condition. Qualifying exigency leave is for making arrangements for a family member’s military deployment. Safe leave is for domestic violence or sexual assault.

If the employee’s FAMLI leave also qualifies for the Colorado Family Care Act or the federal Family and Medical Leave Act (FMLA), then the leaves will run concurrently.

Notice Requirements

Employers are required to provide notice about FAMLI:

• By posting the notice in a prominent location at each worksite.
• To each employee upon hire, and
• To an employee when they learn that the employee might need leave for a covered reason.

The 2023 notice is available here.

Action Items

• Ensure that your payroll is set up to handle contributions by January 1, 2023.
• Register with the FAMLI Division before April 30, 2023.
• Add the notice to your new hire packet.
• Display the poster in a prominent location at each worksite.

Colorado Increases Minimum Wage and Requires Deductions Notice

The following changes to Colorado employment law apply as of January 1, 2023.

Minimum Wage – Statewide

Colorado’s minimum wage will increase to $13.65 per hour. The minimum base wage for tipped employees will increase to $10.63 per hour.

The minimum salary for exempt executive, administrative, or professional employees will increase to

$961.54 per week. (Interestingly, Colorado allows employers to round to the nearest dollar for the annual amount, which is $50,000 per year.) The minimum annual salary to use the “highly compensated employee” exemption will increase to $112,500. The minimum rate for exempt computer employees who are paid on an hourly basis will be $31.41 per hour.

Minimum Wage – Denver

Denver’s minimum wage will increase to $17.29. The minimum base wage for tipped employees will increase to $14.27 per hour.

Notice at Termination of Wage Deductions

Generally, employers in Colorado must pay an involuntarily terminated employee their final wages immediately upon termination. However, there is an exception for when an employer and employee have an agreement for the return of money or other property and the money or property hasn't been returned at the time of termination. Beginning in 2023, regardless of the terms of such agreements, employers will need to provide an employee with a specific notice before taking a deduction from their wages for failing to return the money or property. The notice must be provided no later than 10 days after termination and include all of the following:

• A statement that the employer is deducting from their wages the amount of money or value of property that the employee failed to return
• A written statement identifying the amount of money or the property the employee didn’t return
• The replacement value of non-money property
• When the money or property was provided to the employee, if known
• When the employer thinks the employee should have returned the money or property

If the employee returns the money or property to the employer within 14 days after the employer provides the notice, the employer must pay the employee the amount deducted from their paycheck within 14 days of getting the money or property back.

Note that Colorado law prohibits deductions for property damage and any deduction that would take the employee below minimum wage.

Compliance Calendar

February

2/1 – Deadline for Posting OSHA Form 300A

2/28 – Forms 1094-B, 1095-B, 1094-C, and 1095-C Filing Deadline (paper filers)

March

3/2 – Deadline to Distribute Forms 1095-B and 1095-C 3/2 – Deadline to Submit Form 300A Data to OSHA

3/2 – Medicare Part D Creditable Coverage Disclosure Deadline for Calendar Year Plans 3/31 – Forms 1094-B, 1095-B, 1094-C, and 1095-C Filing Deadline for Electronic Filers

April

4/29 – Remove OSHA Form 300A 04/30 – Form 941 Filing Deadline (Q1)

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