COVID-19 Coronavirus: Employee Benefits and Executive Compensation
To address problems faced by participants and beneficiaries in exercising their healthcare coverage continuation rights, the U.S. Departments of Labor and Treasury jointly issued a notice on May 4, which gave plan participants an extended period of time to elect continued healthcare coverage under COBRA. While the COBRA changes provided by the Notice are very favorable for qualified beneficiaries, by extending the option period to elect COBRA coverage, they increase the risk of adverse selection for insurers – i.e., only those most in need of coverage, and therefore the most expensive group to insure, will elect COBRA coverage.
Read our guidance: DOL and Treasury Defang COBRA's Deadlines in a Time of National Emergency (U.S.) - May 13, 2020
Companies receiving assistance under Title IV of the Coronavirus Aid Relief and Economic Security Act will be required to limit compensation payable to certain highly paid officers and employees. This OnPoint identifies various interpretative and operational challenges under the new rules that companies seeking assistance will need to address.
Read our guidance: Care To Elaborate? – Interpretive Issues Under The CARES Act Compensation Limits (U.S.) – April 21, 2020
On March 25, 2020, the Senate passed the stimulus bill known as the Coronavirus Aid, Relief and Economic Security Act, which contains provisions that (i) relax rules governing certain early distributions, loans and required minimum distributions from tax-qualified retirement plans and individual retirement accounts, (ii) makes adjustments to the rules relating to the funding of tax-qualified single-employer defined benefit plans, and (iii) limits compensation paid by employers to certain officers and other employees where those employers seek to qualify for loans under the Act.
Read our guidance: Congress Formulates Retirement-Related and Executive Compensation Provisions for the COVID-19 Stimulus Bill (U.S.) - March 26, 2020