Compliance December 28, 2020

Partial Plan Termination Relief Provided in New Stimulus Bill

The legislation also includes rules for qualified disaster relief payments and extends some provisions of the CARES Act.

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The latest COVID-19 relief bill, attached to the Consolidated Appropriations Act, 2021, enables certain retirement plan sponsors that laid off or furloughed employees due to the economic effects of the pandemic to avoid a partial plan termination. The bill was signed last night by President Donald Trump.

The bill states: “A plan shall not be treated as having a partial termination (within the meaning of 411(d)(3) of the Internal Revenue Code of 1986) during any plan year which includes the period beginning on March 13, 2020, and ending on March 31, 2021, if the number of active participants covered by the plan on March 31, 2021, is at least 80% of the number of active participants covered by the plan on March 13, 2020.”

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As law firm Eversheds Sutherland notes on its website, “In effect, this provision gives companies until March 31, 2021, to rehire laid off workers and avoid a partial plan termination.”

The new bill doesn’t extend the time available for plan participants to take coronavirus-related distributions (CRDs); however, it does add money purchase pension plans as a plan type from which participants may take a CRD. The provision is retroactive to the passage of the Coronavirus Aid, Relief and Economic Security (CARES) Act. The CARES Act provision of CRDs expires December 30.

The Consolidated Appropriations Act, 2021, also allows for distributions from retirement plans for participants affected by disasters other than the COVID-19 pandemic, as declared by the president. Participants in 401(k), 403(b), money purchase pension and government 457(b) plans may take up to $100,000 in aggregate from whatever retirement plan accounts they own without tax penalties. Income tax on these distributions may be spread over three years, and participants may repay them into a plan that is designed to accept rollovers within three years.

Participants have until 180 days after enactment of the bill to take qualified disaster distributions.

The new bill also extends the expanded limits for qualified retirement plan loans allowed under the CARES Act for that same 180-day period. It similarly extends the one-year delay in loan repayment for participants with repayment due dates between the first day of the disaster incident period and ending 180 days after the last day of the period.

The newly passed stimulus bill also includes provisions related to employer benefits other than retirement plans. The CARES Act allows employers to make payments of up to $5,250, tax free, toward employees’ student loans through the end of this year. The new bill extends that until the end of 2025.

In addition, the bill allows employers to extend the grace period for unused flexible spending account (FSA) benefits for 12 months after plan years ending in 2020 or 2021.

Products December 28, 2020

Brighton Enhances Self-Insured Health Plan Administration Platform

Brighton Health Plan Solutions says its platform removes barriers that keep many small and medium-sized employers from realizing significant health care cost savings and quality improvement.

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Brighton Health Plan Solutions has announced new capabilities and updates to its technology solution, which combines a mobile app, enrollment portal, member portal and administrator portal into one platform.

With the latest enhancements, self-insured employers and health systems can harness Brighton’s Create Technology to administer direct contracts, reference-based pricing models, tiered benefits and trust and welfare benefits.

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Brighton notes that “intimidating administration requirements and in-house expertise they believe they need to administer the plan” may be a barrier to small and mid-sized employers sponsoring self-insured health benefits for employees. Large employers have been able to provide flexible benefits and realize cost savings through self-insured benefit offerings for years. Use of self-insured benefits increased among smaller employers in recent years before leveling off.

The Create Technology platform can support any provider network, insurance carrier, third party health care vendor or payroll platform. Brighton designed the SOC 2-certified secure platform with modular and scalable architecture that allows clients to select the services they want to use, as well as integration capabilities for connecting to external partner solutions.

The newest enhancements to the Create Technology platform simplify administration of:

  • Direct Contracting: Health systems and provider groups can effortlessly administer direct network contracts with self-insured employers, allowing these employers to bypass traditional insurance carriers and save on their medical expenses.
  • Reference-Based Pricing: Pay claims according to any carrier’s reference-based pricing model, whether the model is based on Medicare rates or custom fee schedules.
  • Tiered Benefits: Reimburse according to tier level, with different copays or coinsurance applied to each tier.
  • Trust and Welfare Fund Administration: Manage contribution accounting, delinquency and collection management, online payment collection, hours administration, eligibility determination and enrollment, and COBRA administration.
Brighton says these new capabilities are in addition to the platform’s existing health plan administration functionality: benefits enrollment, member communications, employer communications, collaboration tools, provider search, claims and coverage summaries, spending accounts, appointment scheduling, data reporting, claims adjudication, claims repricing, pre-payment review, and integration with payroll, dental and disability benefits, pensions, 401(k) and other voluntary benefits.

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