Benefit Considerations in Light of Employee Terminations/Layoffs

San Francisco Chronicle, by Kathleen Pender

California employees who lose work because of the coronavirus may be eligible for a range of benefits including paid sick leave, paid family leave, unemployment insurance and state disability insurance.

To inform employees and employers of their rights and responsibilities, the California Department of Industrial Relations and Employment Development Department have issued FAQs related to COVID-19, the disease caused by the coronavirus, for programs
they administer. For an overview, see labor.ca.gov/coronavirus2019/.

Here are some benefits that employees sidelined by the coronavirus might get.

Disability insurance: If a medical professional has certified that you can’t work because you have or have been exposed to COVID-19, you can file a claim for state disability insurance. It provides short-term payments to eligible workers who lose some or all wages due to a non-work-related illness, injury, or pregnancy for up to 52 weeks.

Paid family leave: If you can’t work because you are caring for a relative who is sick or quarantined by COVID-19, you can file for paid family leave, which provides up to six weeks of benefits (up to eight weeks starting July 1). The family member must be a relative covered by the program and have a medical certification.

Disability insurance and paid family leave are part of the same program, called state disability insurance. It’s funded by employees through payroll deductions, usually marked as CASDI. Each provides about 60% to 70% of pay up to a maximum of $1,300 a week. Not all  California employees participate in the program. State and local government employees, including those employed by public schools, are exempt, although some workplaces participate through an elective coverage program.

Also, some employers offer a voluntary plan for disability insurance and paid family leave instead of the state program. Contact your employer for claims related to voluntary plans.

Independent contractors may be eligible for these benefits if they pay into disability insurance elective coverage, said EDD spokeswoman Loree Levy.

Unemployment benefits. If your employer has reduced your hours or shut down operations due to COVID-19, you can file for unemployment insurance. You must be able and available to work to get benefits, which generally range from $40-$450 per
week for up to six months. However, if you are getting reduced benefits because you are working less than full time, you could get more than 26 weeks, Levy said.

Self-employed people can opt in to elective coverage, and if they meet all the  requirements, could qualify for unemployment benefits, Levy said.

Work sharing: Employers whose business has slowed down because of the coronavirus can apply for the unemployment insurance work sharing program. It lets employers  reduce employees’ hours and wages, which can be partially offset with unemployment insurance.

Paid sick leave: The industrial relations department administers the state’s paid sick leave law, which requires almost all public- and private-sector employers to give almost all workers in California at least three paid sick days per year.  If they have leave available, employees can use it “for absences due to illness, the diagnosis, care or treatment of an existing health condition or preventative care for the employee or the employee’s family member. Preventative care may include self-quarantine as a result of potential exposure to COVID-19 if quarantine is recommended by civil authorities” or in other situations, such as exposure to the virus or travel in a high-risk area, the department says.

For other FAQs related to paid sick leave and its coordination with other benefits, see www.dir.ca.gov/dlse/2019-Novel-Coronavirus.htm.
Note that some cities have paid sick leave ordinances that provide higher benefits.  San Francisco’s requires employers to provide paid sick leave to all employees who work in the city. Employees earn one hour of paid sick leave for every 30 hours worked, but employers can cap their balances at 72 hours (10 or more employees) or 40 hours (smaller employers).

COVID 19 Responses by Carrier

Agency Referrals: A Value-First Approach for New Business w/ Jim Morrison

Today, Wednesday, March 18th the Senate passed the Families First Coronavirus Response Act, and President Trump is expected to sign the bill shortly. The Act includes several provisions to protect American workers and assist employers in providing emergency paid sick leave, as well as paid family leave in the case of school closures, for working families impacted by COVID-19.

The FFCRA requires employers with up to 500 employees to provide paid sick leave and paid family leave while providing a refundable payroll tax credit to employers to cover 100% of the cost of wages. There is also a refundable income tax credit made available for self-employed individuals. Employers with less than 50 employees must apply for a hardship exemption in order to qualify.

Employers must offer two weeks (10 days) of paid sick leave for COVID-19-related reasons (existing leave offered can count toward the 10 days). If the sick leave is for an employee who is sick or seeking a diagnosis, the benefit must replace all of the employee’s wages up to a maximum benefit of $511 per day. If an employee is caring for another individual who is sick, the benefit must replace at least two-thirds of the employee’s wages up to a maximum benefit of $200 per day. The paid sick leave credit offsets 100% of employer costs for providing mandated paid sick leave. The credit also offsets, uncapped, the employer contribution for health insurance premiums for the employee for the period of leave.

Employers must offer 12 weeks of paid family leave for employees who have been employed for at least 30 days with a minor child in the event of the closure of the child’s school or place of care. The first 10 days are unpaid, but the employee can overlap this with the 10 days of paid sick leave. This benefit must replace at least two-thirds of the employee’s wages up to a maximum of $200 per day. The paid family leave credit offsets 100% of employer costs for providing mandated paid family leave. The credit also offsets, uncapped, the employer contribution for health insurance premiums for the employee for the period of leave.

Under FFCRA, self-employed individuals are provided similar credits as refundable income tax credits in an amount of what self-employed workers would have received if they had been an employee receiving paid leave benefits pursuant to the mandates. For a given day that a self-employed worker could not work, they can claim a “rough justice” tax credit in the amount of their average daily self-employment income for the year.

This action taken by Congress follows several pieces of emergency guidance released by the Trump Administration. We are expecting more action from Congress and the Administration to address other aspects of the coronavirus pandemic.

Hello everyone! With all the news being dominated with COVID-19, it’s normal to feel anxious, especially with all the school closures and the doomsday messaging going on in social media.

We feel it is our role as facilitators of healthcare financing to provide you on the latest details on how your health plan is handling coverage. The insurance carriers have each released guidelines to help with providing some financial relief concerning the testing and treatment for the COVID-19 (Coronavirus) virus. We at Morrison Insurance Services felt it is important to have a summary of that information for you all in one source. Please click here to see the attached information. We hope you find this helpful. Please keep in mind this is an evolving situation and things can change.

In addition here are links to additional resources:

FAQs on Essential Health Benefit Coverage

Trump Declares National Emergency

If there is anything we can help you with, my team and I are here to assist in any way we can.

On November 29, 2018, the IRS issued Notice 2018-94, which provides a limited extension of time for employers to provide 2018 Forms 1095-C to individuals. It also extends good-faith transition relief from certain penalties for the 2018 reporting year. The deadline for employers to provide Forms 1094-C and 1095-C to the IRS was not extended.

Q1: What was Extended? 2018 Forms 1095-C statements must be furnished to individuals by March 4, 2019 (rather than January 31, 2019). This extension of time also applies to carriers providing Forms 1095-B to individuals in insured plans.

Q2: Were the deadlines for reporting to the IRS extended? No. The 2018 Form 1094-C and all supporting Forms 1095-C (collectively, “the return”) is due to the IRS by April 1, 2019 if filing electronically (or February 28, 2019 if filing by paper). These deadlines were not extended as part of the relief announced in Notice 2018-94. Per the Notice, the government determined there was no similar need for additional time for employers to file these Forms with the IRS. As a reminder, employers that file at least 250 Forms 1095-C must file electronically. The IRS encourages all filers to submit returns electronically.

Q3: Is there penalty relief? Yes. Notice 2018-94 extends transition relief from penalties to reporting entities that have made good-faith efforts to comply with the information reporting requirements for the 2018 reporting year, both for furnishing the Form 1095-C to individuals and for filing with the IRS. Specifically, this relief applies to missing or inaccurate taxpayer identification numbers and dates of birth, as well as other information required on the return or statement. No relief is available if the reporting entity does not make a good-faith effort to comply with the regulations or for a failure to file a return or furnish a statement by the applicable due dates. This relief does not absolve an employer from correcting an incorrect Form if so instructed by the IRS

Q4: What if the submissions are late? Employers that do not comply with these due dates are subject to penalties. However, employers should still furnish and file the forms and the IRS will take such furnishing and filing into consideration when determining whether to abate penalties.

Q5: What if employees do not have Forms 1095-C (or Forms 1095-B from the carrier) before they file their tax returns? Some taxpayers may not receive their Form 1095-C (or 1095-B from the carrier) by the time they are ready to file their personal tax return for 2018. Taxpayers do not need to wait until they receive their Form 1095-C (or 1095-B) to file their annual tax return, and may rely on other information from their employer (or carrier) for purpose of filing individual taxes. Individuals need not send this information to the IRS when filing their returns but should keep it with their tax records.

Q6: Will the IRS offer this relief for 2019 reporting? According to the Notice, because the individual shared responsibility payment is reduced to zero for months beginning after December 31, 2018, the Departments are looking into whether the reporting requirements should change, if at all, for future years.

Source: The Hill

The $69 billion merger between CVS and Aetna will close imminently after New York signed off on the deal late last month.

Aetna and CVS say that the merger will improve health-care outcomes and reduce costs immediately.

They have plans to turn CVS’s 10,000 pharmacies and clinics into community-based sites of care with nurses and other health professionals available to give diagnoses or do lab work.

The merger also means that there will no longer be any independent pharmacy benefit managers in the U.S.

The deal was cleared by the Department of Justice in October, and New York was the last state regulatory approval that the companies needed.

As part of New York’s approval, CVS and Aetna agreed to some concessions, including enhanced consumer and health insurance rate protections, privacy controls, cybersecurity compliance, and a $40 million commitment to support health insurance education and enrollment.