Category: Uncategorized

The National Emergency was ended April 10, 2023 and the Public Health Emergency is set to end May 11, 2023. This means that many of the deadlines around COBRA, HIPAA special enrollment, and other benefit deadlines will be begin to resume. Another key date to note is July 11, 2023 which is the DOL clarified duration of the Outbreak Period, which ends the earlier of (a) one year from the original deadline date; or (b) July 10, 2023.

July 11, 2023, the Outbreak Period will no longer apply. Applicable timeframes that would have otherwise been suspended will resume as stated in the Plan Document. Those suspended plan deadlines resuming July 11, 2023 will include:
• Making COBRA elections
• Making initial or monthly COBRA payments
• HIPAA special enrollments
• COBRA qualifying events

This is a good time for plan sponsors to review their plan documents, and coverage for COVID-19 related costs. Changes around out-of-network testing and treatment will be in effect May 11, 2023 at the national level. Please check for any specific state requirements. Over the counter COVID-19 testing supplies will be paid out of pocket or as permitted under the Plan’s Prescription Benefit Manager (PBM).

Recently the state has provided some additional updates around the WA Cares Fund.

If you live in another state but work in WA, the state of Washington has opened an exemption application as of January 1, 2023. It includes a few additional cases where someone may be able to apply for an exemption.

Beginning Jan. 1, 2023, Washington workers became eligible for exemptions from WA Cares if any of the following apply to them:
o Live outside of Washington.
o Are the spouse or registered domestic partner of an active-duty service member of the United States armed forces.
o Have non-immigrant work visas.
o Are veterans with a 70% service-connected disability rating or higher.
The Employment Security Department is responsible for processing applications for those wishing to seek an exemption under these new categories.

For those who have an exemption for a private LTC policy the policy must still have been in place prior to November 1, 2021, nothing has changed in regards to the private insurance exemption.

Under the current law there is no ongoing re-verification process, however legislators have asked that this be reviewed in 2023 and a re-certification process is possible in the future.

Premium collection from employers is still set to begin July 1, 2023.

The U.S. Department of Homeland Security (DHS) is ending its temporary COVID-19-related policy of allowing employers to use expired List B identity documents (including driver’s licenses and state ID cards) for I-9 purposes. The temporary policy was instituted by the Department of Homeland Security in May 2020 due to the fact many issuing authorities were unable to renew documents on time due to the COVID-19 pandemic.

Beginning May 1, employers will no longer be able to accept expired documents when verifying an employee’s work eligibility on the Form I-9. Employers are also required to update the Form I-9’s of current employees who presented expired List B documents between May 1, 2020 and April 30, 2022 by no later than July 31, 2022. If the employee is no longer employed by the company no action is necessary.

During the pandemic the DHS also announced COVID-19 related guidance allowing employers to review Form I-9 documents virtually, as of now this flexibility remains in place until April 30th.

On March 11, 2022 the state of Washington amended laws around wage payments. Beginning June 9, 2022 there is a new employer requirement in regards to dishonored paychecks due to nonacceptance or nonpayment. Current Washington law requires that wages must be paid in lawful U.S. currency by using cash, check (must be convertible into cash on demand at full face value), direct deposit or other means of payment that pose no cost to the employee.

In a situation where employers pay their employees with an instrument, such as a check, that is returned for insufficient funds the employer will need to reimburse the employees the fees they are charged by their financial institution. Employees are able to request the fee reimbursements within 30 days of receiving a dishonored payment.

The amended law does provide protection to employers from paying any fees when the employer’s financial institution can provide written evidence that the instrument was returned for nonsufficient funds due to an error.

Employers should familiarize themselves with this amendment and implement procedures as necessary to handle dishonored wage payments due to nonsufficient funds and any fees employees may be charged as a result of them.

On January 27, 2022 Governor Inslee signed HB 1732 and HB 1733, House Bills which provide changes to the WA Cares Fund initiative. HB 1732 delays the WA Cares Fund tax until July 1, 2023, and WA Cares Fund benefits will be available beginning July 1, 2026. It also allows those nearing retirement (born prior to 1968) to receive partial benefits even if they are not fully vested. Workers will begin contributing to the fund through a payroll tax premium beginning July 2023. If you have collected WA Cares Fund tax premiums from your employee paychecks in Q1 of 2022 this bill also requires that employers refund employees.

Under HB 1733 workers who live out of state but work in Washington, as well as military spouses, workers on non-immigrant visas, and certain veterans with disabilities, are able to opt-out of the program if they choose.

To assist with the changes from HB 1732 and HB 1733 the Washington ESD has updated their WA Cares Fund website with additional instructions for employers. First and foremost, if you are withholding the WA Cares Fund premium from employee paychecks you will need to stop the withholding from any further checks. Employers will need to reimburse employees for deducted WA Cares Fund premiums within 120 days of the date premiums were collected.

For those employees who purchased a private insurance policy employers will want to maintain copies of the exemption approval letters. If an employee who has a private policy has not yet applied for an exemption with the State they should do so as soon as possible, but no later than December 31, 2022. It is important to note that as of now the date for having a private policy has not changed, to qualify for an exemption it would have to be in place prior to November 1, 2021. Should an individual cancel their private policy due to the change in start date for the WA Cares Fund there is no guarantee they will be able to purchase a private policy that will meet the exemption requirements.

As of January 15, 2022, insurance plans need to cover the cost of over-the-counter (OTC) at-home COVID-19 Tests. For most individuals with health insurance the cost of these tests must be covered, even if they are obtained without the involvement of a health care provider.

Health plans and issuers must cover the costs of COVID-19 tests during the COVID-19 public health emergency without imposing any cost-sharing requirements, prior authorization, or other medical management requirements.

Tests are covered up to a maximum of $12 per test, with a limit of eight (8) tests per month or 30- day period. However, plans are only required to cover tests intended for diagnosis or treatment. Coverage of routine screenings for employment, school, or recreational purposes will continue to be excluded.

On January 10, 2022, the Department of Labor, Health and Human Services (HHS), and the Treasury issued FAQ guidance regarding the requirements for group health plans and health insurance issuers to cover over-the-counter (OTC) COVID-19 diagnostic tests.

Several types of OTC at-home tests have been approved by the FDA, and may be available through your health care provider, local pharmacies or online retailers. Each medical provider may have their own requirements for seeking reimbursement for tests purchased online or at local pharmacies such as CVS, Rite-Aid, etc. Check with your health care insurance provider for more information.

On December 17th, Governor Inslee’s office released a statement declaring a delay in the Washington Cares Fund RCW 50B.04 premium assessment, specific dates were not provided.

What does this mean to employers? The assessed premiums scheduled for deduction on January 1st, 2022 from all employees working at least 12.5 hours per week, will be postponed until legislature can make amendments to the Act. Until further notice at this point. A statement released by Senator Andy Billig, House Majority Leader and Laurie Jinkins, speaker of the House provided a somewhat hazy timeline:
“In addition to delaying the premium assessment, we also support employers pausing premium collections from employees in Washington so lawmakers can take necessary action. While we cannot direct employers not to collect, we strongly encourage them to pause on collecting premiums from employees, giving us time to pass legislation extending implementation dates until next year. We know that this extra time will allow us to find solutions and craft updates to the Fund that allows Washingtonians to age with dignity in their own homes.”

Many Employers proactively researched and offered LTC coverage through various insurance platforms that provided employees the option to choose private coverage over the State’s fund. The caveat was that alternate and “qualified” coverage had to be in place on or before October 31, 2021. Due to the extremely high demand for private coverage, many insurers have not yet completed implementation of some contracts nor submitted bills for payment. It is important to stress to employees that despite the delay in the release of premium statements and collection, insurers will expect back premiums be paid retroactively to the effective date of the policies.

The short-term win is the state has delayed until further notice the earmarked income tax. The long- term challenge will be for Employers and Employees alike to determine the appropriate course of action specific to their respective insurance policies.

So, what should Employers do?
Immediately make your employees aware of the change. The employee announcement communicates the following:
– Choose to maintain coverage they requested and pay the required premiums until legislation communicates changes and a new implementation date.
– Change or cancel personal coverage and see how the legislation responds in late 2022 / 2023.
– Make them aware of the risks with an early termination – early termination may lead to a surrender charge.
– If their employer offers one of the State approved permanent life with LTC rider policies with a future enrollment period, they would most likely be able to re-enroll at that time. However, they may not be eligible for guarantee issue and subjected to evidence of insurability.
– As the law stands now, to be eligible for the exemption, employees had to enroll in a policy effective by 11/1/21.
– At this point in the legislative discussions, we are not aware of any commitment by the State to extend the exemption period.
– As of now, if employees cancel their policies with a future plan to re-enroll at a later date, there is nothing that suggests they would be exempt from paying into the State income tax
once settled by the State Legislature.
– During this pause of the tax the State has said they will work to assure that those who have opted out of the program maintain their private insurance policies going forward.

Now that we are reaching the end of the Open Enrollment period the State established, it is time to encourage employees to access the waiver process by logging into https://wacaresfund.wa.gov/apply-for-an-exemption and follow the steps to opt out. The ability to OPT out began October 1^st at 9:00am. Those wanting additional information on the exemption can go here: https://wacaresfund.wa.gov/private-insurance/. The first step is for eligible employees to create a Secure Access Washington (SAW) account if they don’t already have one.

Several reminders regarding the final few weeks leading up to October 31^st:

• The last day to enroll in a plan to qualify to opt out is October 31 – The policy must be purchased PRIOR TO 11/1 – that means Halloween is the drop-dead date.
• The ability to secure a waiver through the State’s website ends December 31, 2022.
• The payroll tax for the WA Cares Fund for those without an approved exemption begins January 1, 2022.
• Employees are required to present their exemption approval letter to all current and future employers.

FUTURE RULE MAKING

There is much speculation that since Medicaid is experiencing double digit utilization (2012 $112 billion, 2014 $134 billion, 2016 $158 billion and 2018 $183 billion), Washington State will pursue enforcement of waivers achieved from the State’s LTC tax. The purpose of the program is to create a financial buffer before Federal dollars are received to administer Medicaid long term care services and demographic trends show increasing pressure on long term needs.

Currently there are nine other states looking to enact similar legislation. It has been widely speculated that Oregon is next. Some experts claim that insurers with a stake in the Washington LTC market are lobbying for enforcement and the removal of the permanent exemption. The logistics to accomplish enforcement is not complex. For example, the state sends an exemption file to all insurance companies.  In return, insurance companies send a canceled policy report.  Once received the state chases down the resident, assesses a fine and re-enrolls the tax payor.  Though not officially confirmed, enforcement strategies are part of actual conversations with senior leadership at the LTC insurer level. On September 22, the American Council of Life Insurers (ACLI) sent a letter to the Washington Long Term Services and Supports Commission, which oversees the implementation of the Washington Cares Fund.  The letter called attention to the demand for LTC in advance of the November 1 deadline to qualify for an exemption from the payroll tax.  The letter suggested that the Commission support repeal of the lifetime exclusion of those who buy a private LTC policy and then drop coverage once they receive the exemption. It pointed out that high wage earners could contribute more in tax than the benefit they could receive and that it would create a financial burden on the Washington Cares Fund and Medicaid, which falls disproportionately on those at lower income levels. Failing to repeal the permanent exemption or failing to verify that residents maintain continual LTC coverage, could result in people gaming the system to avoid the tax, some of whom may become reliant on Medicaid to cover long term support and services.  The letter offered support for changes to the Washington Cares program to allow coordination between public and private coverage.

The Commission recently met on September 23 and will meet again on November 10 to discuss implementation of the program and possible legislative proposals. We believe the industry (through the ACLI) is lobbying for what is deemed “necessary reform.” Insurers are suggesting that if the Commission changes the rules to add a mandate for continuous coverage, they can and should change rules and explore making it more difficult to cancel coverage.

At this time, this is strictly speculation based on industry response to a concerning retention issue. We will continue to update clients as information is received.

We encourage you to visit the State’s website on the WA Cares Fund for updates and further resources as information continues to be updated.