Articles Posted by Elizabeth Engert Manzo

On May 21, 2020, the U.S. Department of Labor (“DOL”) announced a final rule allowing employers to post retirement plan disclosures online or furnish them to workers via email.  The rule is aimed at reducing administrative expenses for employers and making information more readily available to workers.

ERISA-covered retirement plans must furnish multiple disclosures each year to participants and beneficiaries. The exact number of disclosures per year depends on the specific type of retirement plan, its features, and in some cases the plan’s funding status.  To deliver these disclosures electronically, plan administrators were previously required to comply with the regulatory safe harbor established in 2002 under 29 CFR 2520.104b-1(c), which required that disclosures be reasonably calculated to ensure that workers actually received the information, including confirmation that the transmitted information was actually received (e.g., using return-receipt or notice of undelivered electronic mail features, conducting periodic reviews or surveys to confirm receipt of the transmitted information).

On August 31, 2018, Executive Order 13847, entitled Strengthening Retirement Security in America, was issued. The Order directed the DOL to review whether regulatory or other actions could be taken to make retirement plan disclosures more understandable for participants and beneficiaries and to focus on reducing the production and distribution costs that retirement plan disclosures impose on employers.  In October 2019, the Department published a proposed regulation with a solicitation for public comment.  In response to the commentary received, a final rule creating a new voluntary safe harbor was established.  The new safe harbor permits the following two optional methods for electronic delivery:

The Department of Labor (“DOL”) and other federal agencies released updated model COBRA notices and expanded COBRA deadlines in an effort to reduce the risk of participants and beneficiaries losing benefits during the COVID-19 pandemic.

Updated Model COBRA Notices

Under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”), an individual who was covered by a group health plan on the day before the occurrence of a qualification event, i.e. termination of employment or a reduction in hours that results in loss of coverage under the plan, may be able to elect COBRA continuation coverage upon that qualifying event. Under COBRA, group health plans must provide covered employees and their families certain notices explaining their COBRA rights. The first is a written notice of COBRA rights, called a “general notice,” which is given to an employee and spouse at the time of commencement of coverage. A group health plan must also provide an employee and spouse with an “election notice” upon a qualifying event, which outlines how to make an election under COBRA continuation coverage. The DOL has created model notices, which plans can use to satisfy these requirements under COBRA.

The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), signed into law on Friday March 27, 2020, introduced the Paycheck Protection Program (the “PPP”) with the intended goal of preventing job loss and small businesses failure due to losses caused by the COVID-19 pandemic. The PPP was designed to support small business and employees by providing forgivable loans to employers if they maintained their employees and payroll. It was initially funded with $349 billion on a first come, first serve basis. Initial applications from small businesses and sole proprietorships opened on April 3, 2020 and all of this initial funding was exhausted within 13 days, or by April 15, 2020.

On Tuesday, April 21, 2020, the Senate passed an “interim” coronavirus relief Bill, titled the “Paycheck Protection Program and Health Care Enhancement Act” (the Senate Bill). The Senate Bill amends the CARES Act to (i) increase the amounts authorized for the PPP in accordance with Section 7(a) of the Small Business Act, increase the Economic Injury Disaster Loans (EIDL loans), and increase emergency grants under the CARES Act, and (ii) authorize additional funding for hospital and provider recovery and

coronavirus testing.