As a consequence of the global pandemic, employers are struggling to provide voluntary benefits plans and profit-sharing bonuses to their employees. Thus, the Department of Treasury and the Department of Labor (DOL) announced relief measures to help the participants and beneficiaries of the International Foundation of Employee Benefit Plans.
These rules will allow extensions for the deadlines, making it easier for participants to exercise their right to basic life insurance coverage, portability, and group health plan coverage under COBRA (Consolidated Omnibus Budget Reconciliation Act).
The following points can help you understand the impact of this new announcement on your healthcare plan.
Temporary Closure of Your Business
As an employer, you may continue paying for your employees’ (both current and retired) healthcare benefits even when the physical location of your business is closed.
As long as you continue to keep your employees on the payroll or grant them a profit-sharing bonus, they will be covered by your existing healthcare plan even if the physical location of your business is shut.
However, if you are not paying them a salary, it is possible that their insurance contribution will not be auto-debited from salary, and they might have to pay it themselves.
In case your place of business is closed, and your employees are unable to directly get in touch with you, connect them to someone who can assist them with forms and claims. It is recommended that you notify them before reducing or ceasing benefits.
Providing Healthcare Coverage During COVID-19
The inability to comply with any of these will not be considered a failure based on the amended Employee Retirement Income Security Act of 1974 (ERISA).
According to the Department of Labor, employers and employee benefit plans have a one-year extension on all and any deadlines until further notice. To know more about the extension, read the full FAQs here.
If you are unable to provide executive bonus plans or healthcare coverage during the pandemic, you can guide your employees to the following:
- Enrollment in other healthcare plans that their spouse or another family member may be eligible for.
- Electing COBRA continuation coverage that would retain their coverage and allow them to pay the premium themselves on their existing healthcare plan.
- Seeking special enrollment in individual market insurance coverage.
- Looking for healthcare coverage through federal health insurance plans and/or state health benefit plans.
As an employer, you must look after your employees’ healthcare despite seeing a slump in your business. To learn more about employee benefits and assistance with your insurance needs, contact the experts at CIA Insurance and Risk Management.
Post written by Janelle Morck, Vice President | Employee Benefits Risk Management (ERM)
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