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Important Changes to UC Benefits / FSA Programs

In response to the COVID-19 pandemic, the Departments of Labor and Treasury issued a rule extending the time periods during which participants may take certain actions relating to their group health plan coverage. The rule, “Extension of Certain Timeframes for Employee Benefit Plans, Participants and Beneficiaries Affected by the COVID-19 Outbreak,” is published in the Federal Register.

In addition, two guidance documents were issued after the rule described above, which allow employers, at their discretion, to (1) expand employees’ and non-Medicare retirees’ opportunities to make changes to their Section 125 benefit plans, which for UC includes the medical plans and the Health and Dependent Care (DepCare) Flexible Spending Arrangements (Notice 2020-29), and (2) to increase the amount that can be carried forward to the next plan year under the Health FSA (Notice 2020-33).

The UCR Health & Welfare Benefits team have been working closely with UCPath, the Office of General Counsel, the plan administrators and carriers, and their consulting partners to understand the impact of the new rule and guidance and develop implementation plans.  Following is an explanation of what has been determined to date. Please note that this is a constantly evolving landscape, and we will continue to share information as it becomes available.  

Participants are able to request changes as of June 1, 2020.  The article"Important changes to UC benefits programs for relief during the pandemic " has been posted to UCnet to inform participants about the opportunities to make changes to their benefit plans.

Program Updates

Update - Week of July 20, 2020
  • United Healthcare

    The extension of cost-share waivers for COVID-19 treatment and testing for the UC Medicare Choice members was initially through July 24, 2020. The Trump administration renewed the coronavirus public health emergency for another 90 days.  To read the Renewal of Determination That A Public Health Emergency Exists, please visit the U.S. Department of Health and Human Services website.
     
    United Health Care (UHC) will follow the federal emergency on extending the COVID-19 related waivers tied to urgent care, inpatient coverage and testing for members.
     
    UHC continues to waive copays for PCP & Specialist for all diagnoses through September 30, 2020.

Update - Week of June 29, 2020
  • New IRS guidance on CARES Act relief provisions available through the Retirement Savings Program:

    The criteria for meeting the “experiencing financial consequence” requirement has been expanded and is now defined as:

    You, your spouse or someone who shares your principal residence faced at least one of the following adverse financial consequences as a result of COVID-19:

    • Being quarantined, furloughed or laid off, or having work hours reduced
    • Being unable to work due to lack of childcare
    • A reduction in pay (or self-employment income)
    • Having a job offer rescinded or start date for a job delayed
    • Closing or reducing hours of a business owned or operated by you, your spouse or a member of your household

    The end date of the increased loan maximum provision has been specified as September 22, 2020 originally stated as “180 days from enactment”, which Fidelity determined to be September 23).

Update - Week of June 22, 2020
Update - Week of June 1, 2020
  • Anthem
    • UC Health will extend the cost share waiver for telehealth/telephone-only visits through September 30, 2020, for the PPO plans. You may recall that the original timeline was through mid-June 2020.
  • UnitedHealthCare
    • The extension of cost-share waivers for COVID-19 treatment and testing for the UC Medicare Choice members is through July 24, 2020. UHC will continue to waive copays for PCP & Specialist for all diagnoses through September 30, 2020.

Extension of Certain Timeframes for Employee Benefit Plans, Participants and Beneficiaries Affected by the COVID-19 Outbreak

  • How Eligible Individuals Will Make Plan Changes
    Eligible individuals may begin requesting changes as of June 1, 2020.

    For employees on UCPath, including those at recently-converted UCSF and UCSD, the employee will need to contact the UCPath Center to request an event be opened.  The employee will be asked a few questions to determine to which plans they are eligible to make changes.  Here are the steps the employee will need to follow:

    Step 1
    Log in to UCPath online
    Step 2
    From the home page, select Ask UCPath Center
    Step 3
    On the menu bar, select My Inquiries or Submit an Inquiry.
    Step 4
    From the inquiry page select:
    • Topic = Benefits
    • Category = Benefits Election Inquiry
    • Type Subject = Request COVID-19 Event
    • Type Description = In this box, please provide answers to the following questions:
      • Did you add a family member, through marriage, establishment of a domestic partnership, birth, adoption, or placement for adoption?
      • Did you lose medical coverage (for example, loss of coverage through your spouse/domestic partner or parent, moved out of the HMO service area, or became ineligible for Medicaid/CHIP)?
      • Did you become eligible for Medicaid or the CHIP Premium Assistance Program?
        Please number your answers, for example:
        1.  Yes
        2.  No
        3.  No

    The answers will determine what type of COVID event will be opened for you.  Even if you answer “No” to all questions, you will be able to make changes to your medical, Health FSA and DepCare FSA elections.

    The employee will receive an email notifying them when the event has been opened and they can log in to UCPath to make their desired changes.

    Once the event is opened, the employee will have 31 days to log into the UCPath portal and make their desired changes. After making changes, the employee will receive a confirmation email.The event will close automatically after 31 days if no action is taken.

    The effective date of coverage will be:

    • For HIPAA Special Enrollment Rights events under the Extension Rule, retroactive to date of the event date, and the employee will be responsible for all retroactive premiums owed.
    • For all other changes to elections, the first of the month following the date the event was opened, not the date the employee makes changes. For example, if UCPC opens the event on June 25 and the employee makes changes on June 26, the changes will go into effect prospectively on July 1. If the employee makes changes on July 2, the changes will go into effect retroactively on July 1. The date of the changes is subject to payroll deadlines.

    Individuals may not make multiple elections during the election period provided to them as a result of the Extension Rule and Notice 2020-29. If an exception is requested due to extenuating circumstances, appeals may be submitted (using the standard process) and will be evaluated on a case-by-case basis.

    For your convenience, we are providing Frequently Asked Questions , an iterative document that grows as additional questions are received, and the Employee Benefit Extensions for the COVID-19 Pandemic, a graphic illustrating the different timelines for allowed changes.

     

  • Notice 2020-29 – COVID-19 Guidance under Sec. 125 Cafeteria Plans and Related to High Deductible Health Plans
  • Notice 2020-33 - Section 125 Cafeteria Plans – Modification of Permissive Carryover Rule for Health Flexible Spending Arrangements
    • This guidance allows employers, at their discretion, to increase the Health FSA carry-over amount from $500 to $550 (the maximum unused amount from the 2020 plan year that can be carried forward to the 2021 plan year). UC will adopt this change. 
  • Final Rule for Extension of Certain Timeframes for Employee Benefit Plans, Participants and Beneficiaries Affected by the COVID-19 Outbreak

    The Departments of Labor and Treasury issued this rule to extend the time periods during which participants may take certain actions relating to their group health plan coverage, including submitting claims for coverage, electing and paying for COBRA continuation coverage, enrolling in group health plan coverage under HIPAA special enrollment rights, and filing appeals for adverse benefit determinations. The rule also allows additional time for a group health plan sponsor or plan administrator to provide certain notices, disclosures, or other documents to participants. This rule is hereafter referred to as the “Extension Rule.”

    Specifically, the Extension Rule provides that the “Outbreak Period” - defined as the period beginning March 1, 2020 and ending 60 days after the date on which the federal government declares the COVID-19 national emergency has ended – will be disregarded with respect to certain plan deadlines. Therefore, if a qualifying event occurs during the Outbreak Period, the amount of time allowed for participants to take action allowed by the qualifying event begins at the end of the Outbreak Period. Please note that the end date of the National Emergency has not yet been determined.

    The new rule applies to employee health and welfare group plans governed by ERISA. Although UC’s plans are not subject to ERISA, historically we have made an effort to comply with ERISA regulations where possible and applicable. Since the intent of the new rules are to provide relief to participants adversely affected by the COVID-19 pandemic, UC will apply the rules to the following plans:

    • Medical (excluding UC Medicare plans)
    • Dental
    • Vision
    • Basic & Voluntary Disability (for claims-related provisions only, not enrollment)
    • Life/AD&D (for claims-related provisions only, not enrollment)
    • Health Flexible Spending Account

    Please note that the DepCare FSA, Supplemental Health Plans and Legal plan are not included.

    The new rule will apply to active employees and retirees enrolled in UC’s non-Medicare health plans.

    The rule extends the deadlines for the following events and transactions.

    Deadline for Making Elections Due to HIPAA Special Enrollment Rights

    The amount of time a participant has to make an election will be extended for events defined under HIPAA Special Enrollment Rights (26 US Code Sec 9801(f)), as follows:

    • Loss of eligibility from other coverage
    • Termination of eligibility for CHIP/Medicaid
    • Newly eligible for CHIP/Medicaid premium subsidy
    • Acquisition of spouse or dependent by marriage, birth, adoption, or placement for adoption

    Under UC’s GIRs, a normal PIE is 31 days. Under the new rule, a PIE that is triggered by HIPAA Special Enrollment rule extends 91 days (31 days after 60 days) following the end of the National Emergency.

    Note that this provision of the rule does not apply to Disability or Life/AD&D insurance.

    Changes made under this rule will be retroactive to the date of the event that triggered the Special Rights. Employees will be responsible for the employee share of any retroactive premium.

    The HIPAA Special Enrollment Rights correlate to the PIE-triggering events in the UC Group Insurance Regulations listed below.  Any provision of the GIRs not listed below is not subject to the deadline extension for HIPAA Special Enrollment Rights.

    • GIR provisions corresponding to “loss of eligibility from other coverage”
      • Involuntary Loss of Coverage (1003.D.7)
        • Coverage lost
        • Employer contributions terminated
        • COBRA exhaustion
        • Reduction in hours of employment
      • Move Out of/Return to Medical and/or Dental HMO Plan Service Area (1003.D.11)
      • Change in Family/Employee Status (1003.D.19)
        • Change in Marital Status
          • Legal separation, divorce
        • Death of Family Member
        • Change in Employment Status of Employee or Employee’s Family Members resulting in loss of coverage
        • Child ceases to be eligible family member
          • Ages out
    • GIR provisions corresponding to “termination of eligibility for CHIP/Medicaid”
      •  Involuntary Loss of Coverage (1003.D.7)
        • CHIP/Medicaid eligibility lost
    • GIR provisions that correspond to “eligibility for Medicaid/CHIP Premium Assistance Program”
      • Eligibility for Medicaid or CHIP Premium Assistance Program (1003.D.15)
    • GIR provisions that correspond to “acquisition of spouse or dependent by marriage, birth, adoption, or placement for adoption”
      • Acquisition of Eligible Family Member (1003.D.14)
    Claims - Filing Extension/Appeals/Request for External Review
    • Deadlines for filing claims (e.g., medical/dental/vision claims for services, disability claims, Health FSA claims for reimbursement, life/AD&D insurance claims), filing claim appeals, requesting external review and filing information related to external reviews are extended until the allowed number of days after the end of the Outbreak Period (End of National Emergency + 60 days + the amount of time normally allowed for that transaction). The deadlines will vary depending on the typical deadlines set by the carrier/plan administrator.  
    • For Health FSA, the debit card substantiation period will be extended to 60 days after the end of the Outbreak Period; that is, debit cards will not be suspended during that time.  Any debit cards suspended since March 1 will be reactivated.
    Disability – Extension of Date to Notify Plan of Disability
    • The deadline for employees to notify a disability carrier of a date of disability is extended for the allowed number of days after the end of the Outbreak Period. UC’s Disability Plans do not have a notification deadline, so this provision does not apply.
    COBRA Deadlines
    • The deadline for employees to notify WageWorks of a qualifying event (e.g., divorce, child aging out of coverage) is extended for the allowed number of days after the end of the Outbreak Period (End of National Emergency + 60 days + 30 days). UC will continue to send COBRA eligibility files to WageWorks on the usual schedule.  
    • The deadline for electing COBRA continuation coverage is extended for 60 days after the Outbreak Period (i.e., the end of the National Emergency + 120 days)
    • The deadline for making COBRA premium payments disregards the Outbreak Period. Initial payment will be due 45 days past the end of the Outbreak Period, and ongoing payments will be due 30 days past the end of the Outbreak Period.
    • We are working with the medical plans to determine how claims will be handled when a COBRA participant takes advantage of the extended deadline for premium payment. We will share more information as this becomes available.
    • The rule allows plan administrators more time to issue COBRA election notices; however, WageWorks will continue to send the election notices within the usual 14-day deadline.
    Important Notes about the Extension Rule
    • You will note that there is some overlap between the provisions of Notice 2020-29 and the Extension Rule. The Extension Rule applies not only to medical plans and the Health FSA, but also dental, vision and, to a limited extent, disability and life/AD&D insurance. It does not apply to DepCare. Supplemental Health Plans and the Legal plan are not included in either set of changes.
    • HIPAA Special Enrollment Rights are defined to apply to spouses and dependents of plan participants. Domestic partners are not included in the definition under the law. However, UC will honor the extension of the deadlines for the addition or termination of coverage for domestic partners.
    • The Outbreak Period is defined as being retroactive to March 1, 2020. Therefore, if an employee with a PIE due to a HIPAA Special Enrollment Rights event which ended on or after March 1 missed the deadline to enroll, they now have an extended deadline.

Important Changes to the  UC FSA Program for Pandemic Relief

The deadline for Health FSA participants to submit claims for expenses incurred in 2019 has been extended.

In order to make 2019 carry-over funds available for 2020 expenses while the 2019 deadline has been extended, WageWorks will need to make manual adjustments to certain claims.  Claims will be reviewed and necessary adjustments made on a daily basis.

  • Scenarios that illustrate the claim payout process from the unused 2019 balance, funds carried-over to 2020, and the 2020 contribution.
    Example 1
    2019 Remaining Balance
    (After carry-over)
    Carry-Over to 2020
    2020 Election
    $250
    $500
    Decline
    • If the participant submits a 2019 claim for $100, it will be paid out from the 2019 remaining balance. 
    Example 2
    2019 Remaining Balance
    (After carry-over)
    Carry-Over to 2020
    2020 Election
    $250
    $500
    $1,000
    • If the participant submits a 2019 claim for $500, a $250 payment will be made from the 2019 remaining balance and the WageWorks system will automatically reject the remaining $250 due to an insufficient balance in 2019. WageWorks will identify the rejected claim on the following business day and move $250 from the 2020 carry-over balance to pay the remaining $250.
    • Unfortunately, WageWorks cannot suppress the rejection letter which is generated automatically. Participants should disregard the letter.
    Example 3
    2019 Remaining Balance
    (After carry-over)
    Carry-Over to 2020
    2020 Election
    $250
    $500
    $1,000
    • If the participant uses their debit card for $1,500 for a 2020 service date, the amount will be debited against the $500 carry-over plus the $1,000 2020 election. The remaining balance in 2020 will be zero.  
    • If the participant then submits a 2019 claim for $500, they will receive $250 from the 2019 remaining balance, and the rest of the claim amount will be denied, since the carry-over funds were used to pay for the 2020 claim. 
    Example 4
    2019 Remaining Balance
    (After carry-over)
    Carry-Over to 2020
    2020 Election
    $250
    $500
    $1,000
    • If the participant submits a 2020 claim for $1,700, they will be reimbursed $1,500 ($1,000 2020 election + $500 carry-over). The remaining $200 of the claim will be rejected. Remaining balances from 2019 (after carry-over) cannot be used to pay for expenses incurred in 2020. 
    The end date of the extended filing period for 2019 Health FSA claims is dependent on the end date of the COVID-19 National Emergency, and therefore has not been determined. Any unused 2019 remaining balance will be forfeited after the extended deadline has passed.
Update - Week of July 20, 2020
  • United Healthcare

    The extension of cost-share waivers for COVID-19 treatment and testing for the UC Medicare Choice members was initially through July 24, 2020. The Trump administration renewed the coronavirus public health emergency for another 90 days.  To read the Renewal of Determination That A Public Health Emergency Exists, please visit the U.S. Department of Health and Human Services website.
     
    United Health Care (UHC) will follow the federal emergency on extending the COVID-19 related waivers tied to urgent care, inpatient coverage and testing for members.
     
    UHC continues to waive copays for PCP & Specialist for all diagnoses through September 30, 2020.