In April 2020, unemployment rates peaked at nearly 15%. Since that time, there has been a steady decline and current unemployment is near 10%. While this is still a far cry from our pre-COVID-19 unemployment rates of 3.5%, employers are increasingly bringing employees back on payroll.
However, this task is bringing new challenges to employers, including sorting through the details of getting affairs in order. To help realign benefits, employers should consider following these seven tips.
(1) Make sure elections are updated in payroll and any benefits vendors, like BRI.
Employers should make sure that participants’ current elections are correct in payroll and all benefits administration systems. Issues are common if elections were changed or suspended during a furlough or unemployment. You may need to recalculate per pay deductions.
(2) Make sure all payments and deposits are correct and up-to-date.
Temporary furloughs or terminations can have payment considerations both for insurance and for pre-tax benefit accounts. If an employee was offered COBRA, it is good to confirm the status and payment of those benefits.
If you are bringing employees back on payroll and they are resuming participation in a pre-tax account, confirm what deposits have been made year-to-date and if future contributions need to be adjusted to collect any missed payments while on furlough.
(3) Help employees with high commuter benefit balances.
Employees that have build up high commuter benefit balances should be encouraged to temporarily stop per pay deductions and use those balances that have built up for parking and/or commuting costs.
(4) Be on the look out for Non-discrimination testing.
Non-discrimination testing is required by the IRS for any plan sponsor offering benefits on a pre-tax or tax-free basis. It ensures that plans are nondiscriminatory or do not favor highly compensated employees.
Employers should ensure that they complete the testing timely. Due to COVID-19, unexpected mid-year changes from employees may affect typical test results and may require you to make adjustments to plans in order to pass.
BRI will be reaching out beginning in October for calendar year plans.
(5) Confirm all employment status information is up to date.
As employers are bringing employees back on payroll, they should make sure that all employee status changes (on behalf of plan participants) have been reported correctly.
Employees who were offered COBRA in response to COVID-19 and are then re-hired must be sent a General Rights Notice. This notice will let them know what their COBRA rights are if they experience another qualifying event.
If employees were being directly billed for a portion of an insurance premium during COVID-19 (furlough), the billing would end based on their return to work date.
(6) Review your Plan Highlights or Plan Documents.
Employers had the ability to make certain one-time or recurring changes to their plans due to COVID-19. Employers should review their Plan Highlights and Plan Documents (if applicable) to ensure that they correctly reflect how they intend plan parameters to be outlined going forward.
For plan administered by BRI, Plan Highlights are found under the Documents section, accessible under the employer’s secure login at the BRI website.
(7) Help employees get off and running.
When employees are returning to payroll, it is sometimes best to treat them similarly to a new employee. Be sure to communicate how to make changes (if applicable), where to login, and what they will need to access their benefits.
For example, if participants have lost, misplaced or accidentally destroyed their benefits cards, the employer may request a new one on the employee’s behalf.
We are here for you!
We understand that COVID-19 has been anything but straightforward. Additionally, as you are bringing employees back, you are likely to run into some nuances that you haven’t seen before.
We get that and encourage you to reach out to your Assigned Representatives for further assistance and clarity.