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DOL Issues Emergency Extensions to COBRA

The U.S. Department of Labor’s Employee Benefits Security Administration (EBSA) today issued opens in a new windowFrequently Asked Questionsopens PDF file under the Consolidated Omnibus Budget Reconciliation Act (COBRA) and revised opens in a new windowCOBRA model notices. Plan administrators can use these model notices to notify plan participants and beneficiaries of their rights under COBRA and qualified beneficiaries of their rights to elect COBRA.

“The information we’re providing today will help Medicare-eligible Americans make key decisions regarding their healthcare coverage,” said U.S. Secretary of Labor Eugene Scalia. “As many individuals face economic hardship related to coronavirus, the Department will continue to inform workers and help them avoid incurring unnecessary health costs.” Scalia added, “This change was prompted by a letter from members of Congress –Representatives Kevin Brady, Virginia Foxx, Richard Neal, Frank Pallone, Bobby Scott, and Greg Walden. We thank them for their attention to the issue.”

In general, COBRA allows employees (and their families) who would otherwise lose their group health coverage due to certain life events to continue their same group health coverage. These events include termination or reduction in hours, death of a covered employee, divorce or legal separation, Medicare entitlement and loss of dependent status. COBRA generally lasts for 18 months but, in some cases, can last up to 36 months.

Under COBRA, group health plans must also provide covered employees and their families with certain notices explaining their COBRA rights. The revised model notices provide additional information to address COBRA’s interaction with Medicare. The model notices explain that there may be advantages to enrolling in Medicare before, or instead of, electing COBRA. It also highlights that if an individual is eligible for both COBRA and Medicare, electing COBRA coverage may impact enrollment into Medicare as well as certain out-of-pocket costs.

These documents will provide important information to COBRA-eligible individuals as they make healthcare choices for themselves and their families while assisting employers that must comply with the notice requirements under COBRA.

EBSA’s mission is to assure the security of the retirement, health, and other workplace-related benefits of America’s workers and their families. EBSA accomplishes this by developing effective regulations; assisting and educating workers, plan sponsors, fiduciaries and service providers; and vigorously enforcing the law.

The mission of the Department of Labor is to foster, promote and develop the welfare of the wage earners, job seekers, and retirees of the United States; improve working conditions; advance opportunities for profitable employment; and assure work-related benefits and rights.

Source:  opens in a new windowU.S. Department of Labor News Release, May 1st, 2020

 

The Coronavirus Aid, Relief and Economic Security Act (CARES Act)

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law on Friday, March 27, 2020, and is the most massive economic relief bill in U.S. History.  It will allocate $2.2 trillion in health care relief and emergency assistance for individuals, families, and businesses affected by the COVID-19 pandemic crisis.

opens in a new windowCoronavirus Aid, Relief, and Economic Security Act (CARES Act)

The CARES Act was designed to distribute capital quickly and broadly.  The Paycheck Protection Program (PPP) prioritizes millions of Americans employed by small businesses by authorizing up to $349 billion toward job retention and certain other expenses.  Small businesses and eligible nonprofit organizations, Veterans organizations, and Tribal businesses described in the Small Business Act, as well as individuals who are self-employed or are independent contractors, are eligible if they also meet program size standards. opens in a new window(1)

Below you will find links to additional information, along with a few attachments, that may help covered businesses access the other resources available through the recently passed stimulus package:

Guidance from the U.S. Senate Committee on Small Business & Entrepreneurship

Guidance from the U.S. Chamber of Commerce

Guidance from the US Department of Treasury

The CARES Act also provides support for opens in a new windowpublic transportationopens WORD file .  To find out more information, please visit the opens in a new windowFederal Transit Administration COVID-19opens WORD file landing page.

Individuals & Families

For individuals and families, $250 billion has been allocated for direct payments in the form of recovery rebates to help soften the economic challenges many are currently facing.  Recovery rebates are refundable tax credits that will be applied to 2020 tax returns but will be advanced to taxpayers now based on their 2019 or 2018 adjusted income.

How much of a rebate will I receive?

Individuals with a Social Security Number (SSN) and who are not dependents may receive $1,200 (single filers and heads of household) or $2,400 (joint filers), with an additional rebate of $500 per qualifying child, if they have adjusted gross income (AGI) under $75,000 (single), $150,000 (joint), or $112,500 (heads of household) using 2019 tax return information. (The IRS will use 2018 tax return information if the taxpayer has not yet filed for 2019.) The rebate phases out at $50 for every $1,000 of income earned above those thresholds. opens in a new window(2)

CARES Act Rebate chart

How do I get my rebate?

For most Americans, no action is required. The IRS will use data from the most current tax returns or Social Security data to provide a rebate to Americans either via direct deposit (if such information is available) or through a paper check in the mail to the last address on file.

U.S. Treasury Secretary Steven Mnuchin said he hopes to distribute rebates to taxpayers who e-filed with direct deposit banking information in three weeks. Taxpayers receiving rebate checks may have to wait six to eight weeks to receive a paper check in the mail.

Treasury will be developing a web-based portal for individuals to provide their banking information to the IRS online. Taxpayers will be able to receive payments immediately as opposed to checks in the mail. opens in a new window(3)

Additional information regarding Rebate Relief, Social Security, Payroll Tax Changes, and Unemployment concerning the CARES Act can be found here:

opens in a new windowTax Foundation – FAQ on Federal Cornovirus Relief Bill (CARES Act).

Provisions of the CARES Act also address healthcare needs, expand individual access to retirement accounts, support education, and provide state and local governments with additional funds to help mitigate the on-going COVID-19 crisis.

Understanding the $2 Trillion Stimulus Package, Managing Remote Employees and more…

opens in a new window03.27.2020 – Benefits Info COVID-19 Resources Newsletter

If you need help understanding the 2 Trillion Dollar Stimulus Package, you are not alone.  In this update we have included a document that provides an overview of the package, which is designed to provide financial assistance for those struggling as a result of the coronavirus (COVD-19) outbreak.  Another attachment contains answers to questions employees may have about those payments.

COVID-19 has caused many employers across the country to make significant changes to their standard procedures, including shifting their employees from working at the office to working from home. We have prepared a guide to serve as an introduction to managing remote employees which includes best practices for keeping employees engaged. It should be used for informational purposes only and not be considered as legal advice.  You will also find a Families First Coronavirus Response Act (FFCRA or Act) Poster. Applicable employers should post and/or send employees electronically no later than April 2nd.

Finally, carriers continue to schedule webinars and FAQ’s as they attempt to keep us all posted on changes as a result of COVID-19. Here are a few you may consider:

Aetna has provided the latest information on their response and steps consumers should take to stay healthy through their opens in a new windowfrequently-updated COVID-19 resource center.

Anthem will host their next session at 12:00 p.m. (CST) on Tuesday, March 31. They will cover a variety of relevant topics and look to address many of the most common questions they are receiving. opens in a new windowPlease click this link to register for the event and save to your calendar.

Cigna Group Insurance has updated their opens in a new windowFrequently Asked Questions sheet with new information.

We have included the schedule below for the next round of COVID-19 Update Briefings for UnitedHealthcare brokers, consultants and customers.  Due to the fluidity of this situation, replays are not available for the external calls. UnitedHealthcare is committed to keeping its brokers, consultants, and employers informed, and they encourage attendance to the live weekly calls., which are scheduled as follows:

As always, if you have questions we have not addressed, please do not hesitate to contact your Crane Agency team member.  We hope you have a great weekend!

2019 Novel Coronavirus (COVID-19) FAQ UPDATED 3.24.2020

This UPDATED FAQ covers the general topic of COVID-19 virus to explain how various insurance policies could respond to claim scenarios related to the COVID-19 virus. If your business experiences a loss, we recommend you submit a claim to your insurer. They will give their position about coverage under your policy. No one can say for certain what might happen in the future, but we always recommend insureds should submit a claim.  As always, please contact your Crane Agency Service Team with any questions and check the opens in a new windowCrane Agency Blog frequently for updates.

opens in a new window2019 Novel Coronavirus (COVID-10) FAQ UPDATEDopens PDF file

2019 Novel Coronavirus (COVID-19) FAQ

opens in a new window03.24.2020 – Please see our updated FAQ for additional guidance, as it pertains to COVID-19.

As concerns about COVID-19 continue to rise, many are left wondering what they can do to protect their families, businesses and their workforce.  In order to help our clients plan and prepare, Crane Agency has created a opens in a new windowFAQ opens PDF file document to help explain how some commercial insurance policies may respond.

The CDC has also provided interim guidance for opens in a new windowBusinesses and opens in a new windowFamilies on their website.  Recommended strategies for employers to use now:

Actively encourage sick employees to stay home

  • Employees who have symptoms of acute respiratory illness are recommended to stay home and not come to work until they are free of fever (100.4° F [37.8° C] or greater using an oral thermometer), signs of a fever, and any other symptoms for at least 24 hours, without the use of fever-reducing or other symptom-altering medicines (e.g. cough suppressants). Employees should notify their supervisor and stay home if they are sick.
  • Ensure that your sick leave policies are flexible and consistent with public health guidance and that employees are aware of these policies.
  • Talk with companies that provide your business with contract or temporary employees about the importance of sick employees staying home and encourage them to develop non-punitive leave policies.
  • Do not require a healthcare provider’s note for employees who are sick with acute respiratory illness to validate their illness or to return to work, as healthcare provider offices and medical facilities may be extremely busy and not able to provide such documentation in a timely way.
  • Employers should maintain flexible policies that permit employees to stay home to care for a sick family member. Employers should be aware that more employees may need to stay at home to care for sick children or other sick family members than is usual.

Separate sick employees

  • CDC recommends that employees who appear to have acute respiratory illness symptoms (i.e. cough, shortness of breath) upon arrival to work or become sick during the day should be separated from other employees and be sent home immediately. Sick employees should cover their noses and mouths with a tissue when coughing or sneezing (or an elbow or shoulder if no tissue is available).

Emphasize staying home when sick, respiratory etiquette and hand hygiene by all employees

  • Place opens in a new windowposters that encourage staying home when sick, cough and sneeze etiquette, and hand hygiene at the entrance to your workplace and in other workplace areas where they are likely to be seen.
  • Provide tissues and no-touch disposal receptacles for use by employees.
  • Instruct employees to clean their hands often with an alcohol-based hand sanitizer that contains at least 60-95% alcohol, or wash their hands with soap and water for at least 20 seconds. Soap and water should be used preferentially if hands are visibly dirty.
  • Provide soap and water and alcohol-based hand rubs in the workplace. Ensure that adequate supplies are maintained. Place hand rubs in multiple locations or in conference rooms to encourage hand hygiene.
  • Visit the  opens in a new windowcoughing and sneezing etiquette and  opens in a new windowclean hands web page for more information.

Perform routine environmental cleaning

  • Routinely clean all frequently touched surfaces in the workplace, such as workstations, counter tops, and doorknobs. Use the cleaning agents that are usually used in these areas and follow the directions on the label.
  • No additional disinfection beyond routine cleaning is recommended at this time.
  • Provide disposable wipes so that commonly used surfaces (for example, doorknobs, keyboards, remote controls, desks) can be wiped down by employees before each use.

Advise employees before traveling to take certain steps

  • Check the opens in a new windowCDC’s Traveler’s Health Notices for the latest guidance and recommendations for each country to which you will travel. Specific travel information for travelers going to and returning from China, and information for aircrew, can be found at on the CDC website.
  • Advise employees to check themselves for symptoms of  opens in a new windowacute respiratory illness before starting travel and notify their supervisor and stay home if they are sick.
  • Ensure employees who become sick while traveling or on temporary assignment understand that they should notify their supervisor and should promptly call a healthcare provider for advice if needed.
  • If outside the United States, sick employees should follow your company’s policy for obtaining medical care or contact a healthcare provider or overseas medical assistance company to assist them with finding an appropriate healthcare provider in that country. A U.S. consular officer can help locate healthcare services. However, U.S. embassies, consulates, and military facilities do not have the legal authority, capability, and resources to evacuate or give medicines, vaccines, or medical care to private U.S. citizens overseas.

Additional Measures in Response to Currently Occurring Sporadic Importations of the COVID-19

  • Employees who are well but who have a sick family member at home with COVID-19 should notify their supervisor and refer to CDC guidance for opens in a new windowhow to conduct a risk assessment of their potential exposure.
  • If an employee is confirmed to have COVID-19, employers should inform fellow employees of their possible exposure to COVID-19 in the workplace but maintain confidentiality as required by the Americans with Disabilities Act (ADA). Employees exposed to a co-worker with confirmed COVID-19 should refer to CDC guidance for  opens in a new windowhow to conduct a risk assessment of their potential exposure.  Please visit the CDC website for more information.

Other helpful resources include:

opens in a new windowHR Insights – Coronavirusopens PDF file

opens in a new windowRisk Insights – Protecting Workers from Coronavirusopens PDF file

opens in a new windowOSHA Safety Cornerstones Q1 2020opens PDF file

opens in a new windowLive Well, Work Well – Coronavirusopens PDF file

Helpful Websites:

opens in a new windowNational Institutes of Health – COVID-19 Landing Page

opens in a new windowNational Retail Federation – Coronavirus Resources for Retailers

opens in a new windowOSHA COVID-19 Website Landing Page

opens in a new windowUS Department of Education COVID-19 Landing Page

opens in a new windowUS Food & Drug Coronavirus Disease 2019 (COVID-19) Landing Page

opens in a new windowWorld Health Organization Website

We will continue to monitor current events, but as with any developing situation, please consult local and governmental health agencies for the newest developments.

Frequently Asked Insurance Questions When Buying A Business

opens IMAGE file

When buying a business, it is important to be aware of any potential insurance challenges a business owner may face depending on the type of purchase.  In this FAQ, Crane Agency will  examine the differences between a Stock Acquisition and an Asset-Only Purchase.

1. I’m going to buy someone else’s business. What insurance issues do I need to worry about?

This can be a complicated situation. Typically, the first question your insurance broker will ask you is what type of purchase – a stock acquisition or an asset-only purchase?

2. What is the general difference between the two?

A stock purchase is where you purchase the entire company as it is currently structured. “XYZ, Inc.” will continue to operate as exactly the same company after your purchase. From an insurance perspective, the most important thing to understand is that you have purchased XYZ’s liabilities along with their assets. You’ll be responsible for any claims that are discovered even if they took place prior to your purchase.  An asset purchase means that you have purchased only the physical assets of the company, typically along with their customer list and goodwill. The responsibility for liabilities that were incurred prior to the purchase remain with the seller. This arrangement typically means you will need to change the name, even if slightly. “XYZ, Inc.” could become “XYZ, LLC” for example.

3. What potential insurance issues might I face with a stock purchase?

A stock purchase means you need to review the existing liability policies (general liability, auto liability, workers’ compensation, umbrella, professional and management liability) very carefully.  In liability claim situations, it can be months or even years before someone comes forward with their claim or lawsuit. For example, consider a company that sells small household appliances. A fire breaks out in a home and, months later, investigators determine the fire was caused by the faulty toaster purchased from the business that now belongs to you.  Since the fire started before you bought the company, the claim would be paid for by the general liability policy that was in force the day the fire happened. That means you will need to report the claim under the insurance policy in force prior to your purchase. If the prior owner had inadequate insurance, or none, that means you are responsible for an uninsured or underinsured claim.

4. What does potential insurance issues might I face with an asset purchase?

An asset purchase means that while you acquire the business assets of the company, the preexisting liabilities of all types – loan and contractual obligations, lawsuit liabilities, etc. – remain with the seller. This applies even if the prior liabilities are unknown at the time of the sale.  Generally speaking, this is good news for the buyer. However, this doesn’t automatically make all problems go away. The public at large is often unaware of the change of ownership (particularly if the company name or DBA doesn’t change much). If a lawsuit or claim arises, you stand a good chance of having those papers delivered to you. While the prior owner may still end up ultimately responsible for the claim, you may incur legal expenses to defend yourself and get dropped as a defendant.  Even that doesn’t necessarily guarantee that you’re out of the picture, especially if the prior owner had inadequate or no insurance. Plaintiff attorneys can be quite the bulldogs when looking for a deep pocket. From that perspective, it still behooves you to make sure the prior owner had appropriate coverage in place. You may even want them to purchase a specialty “tail” policy that continues to provide coverage for claims that happen after the sale, but which involve products sold or operations performed prior to that.

5. What about other policies such as those for property insurance, contractors’ equipment, crime, auto physical damage and others?

Prior to the purchase, these types of policies are primarily for the seller’s benefit. As “first-party” policies, they provide coverage for the physical loss of the seller’s own property. However, for both stock and asset purchase sales, a buyer still has a general interest in knowing that the property he is buying is fully insured prior to his purchase. What if there is a fire, auto accident or embezzlement discovered just days or weeks before the closing date of the sale? If underinsured (or no insurance at all), this could greatly complicate things, even to the point of canceling the purchase of the business. With proper coverage in place, both the seller and the buyer will know that the property will be repaired or replaced to its condition prior to the loss.

6. Can I simply keep the seller’s current policies in place with no changes?

The answer to that question is “it depends.” Most commercial insurance policies contain a condition that states the policy may not be transferred to another party without the insurance company’s written consent.  This means that if the acquisition is a stock purchase and the named insured will remain exactly as before, with only a change in the underlying ownership, you may be able to continue the existing policies as-is. Even then, many insurers will want to re-underwrite the policies once they find out the ownership has changed.  If the sale is an asset purchase, this will mean that the named insured will be changing. You will not be able to assume the prior owner’s policies unless the insurance company specifically approves the change and issues a policy endorsement. Often, even if the carrier is willing to continue writing coverage, they will want to cancel the current policies and issue new ones effective the date of the sale.  Either way, we recommend that you use this opportunity to completely review the insurance program. Often you will find that the insurance philosophy of the old owner is not the same as yours. The date of the sale is an excellent time to review and update coverages, whether you maintain the existing policies or not.

7. What other issues should be considered?

It is important that both the buyer and seller work closely with their respective attorneys, accountants and other advisors as well as their respective insurance brokers. The types of insurance needed for various businesses can vary widely depending on the nature of their operations, products and business activities.  For example, some businesses may have a serious need for pollution insurance, while that may be a relatively remote potential for loss for others. Pollution can be a big issue if you are buying a building or land that may have had hazardous operations in the past. Under the Federal Superfund law, you can find yourself responsible for the clean-up of that pollution and related claims even though you had no part in creating the problem.  Also let your insurance broker see at least the indemnification and insurance sections of the buy/sell agreement. Who is required to indemnify who and under what circumstances can vary widely. Also, keep in mind that just because the buyer requests the seller provide a certain type of insurance or indemnification does not mean that the seller will agree to it. The results of those business negotiations may increase the buyer’s risk in certain areas and therefore the need for certain types of insurance.

For the best possible outcome, it is most important to keep all of your advisors informed and working together as a team on your behalf.  If you would like more information on how Crane Agency can help protect your business, please contact us today.