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California Expands Leave Under the CFRA

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Effective January 1, 2021, there are amendments to expand the leave law requirements of the California Family Rights Act (CFRA) and requires employers with at least five employees to comply, includes new reasons for leave, and adjusted leave limits.

 

What is California Leave Rights Act?

CFRA provides 12 weeks of unpaid, job-protected leave in a 12-month period to eligible employees to bond with a new child, adoption of a child, employee’s own serious health condition, a child, spouse, or parent’s serious health condition.  Prior to January 1, 2021, the law only applied to employers with 50 or more employees within a 75-mile radius of the employee’s worksite. When an employee’s leave is covered under both FMLA and CFRA, employers must apply the provisions of each federal and state law that are most generous to the employees.

To be eligible for family and medical leave under CFRA, an employee must:

  • Have a total of at least 12 months of service with the employer;
  • Have worked at lease 1,250 hours in the 12 months prior to the leave; and
  • Be employed at a work site with five or more employees (effective January 1, 2021)

If an employee is not eligible for CFRA leave at the beginning of their leave because he/she has not met the 12-months of service requirement, the employee may meet this requirement while on leave.

 

California Leave Rights Act Amendments as of January 1, 2021

The amendments to this law increases the employers are covered under the CFRA amendment by:

  • The law applies to employers with five or more employees;
  • Eliminated the 75-mile requirement
  • The amendment also expanded the law to allow for employee leave to care for grandparents, grandchildren, siblings, and domestic partners and their children, and for exigencies related to a family member’s active military duty.
  • Parents who work for the same employer will now EACH be allowed to take 12 weeks of child-related leave.
  • The amendment eliminates the job reinstatement exemption for salaried employees in the highest-paid 10% of the employer’s employees.

During an employee’s CFRA leave period, employers must continue providing group health plan coverage for the employee.  The health coverage must be continued under the same conditions as those provided prior to the leave.  However, employers are not required to pay for retirement benefits for the employee during a leave period.

For more information on employee leave laws in California, please contact your broker at MNJ Insurance Solutions at (714) 716-4303.

 

This content is provided for informational purposes only and is summarizing the CFRA amendments as of January 1, 2021 and not the law in its entirety.  While we have attempted to provide current, accurate and clearly expressed information, this information is provided “as is” and MNJ Insurance Solutions makes no representations or warranties regarding its accuracy  and completeness.  The information provided should not be construed as legal or tax advice or as a recommendation of any kind.  External users should seek professional advice form their own attorneys and tax and benefit plan advisers with respect to their individual circumstances and needs.

2021 ACA Pay or Play Penalties Increase

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On August 19, 2020, the IRS updated its Pay or Play Frequently Asked Questions to include the annual adjusted penalty amounts for the 2021 calendar year.

When the Affordable Care Act was first implemented, there were two penalties for the Pay or Play, 4980H(a) penalty and the 4980H(b) penalty for Applicable Large Employers, also referred to as an “ALE.”

  • The Section 4980H(a) penalty can apply when an ALE, does not offer group health insurance to “substantially all” full-time employees (and dependents). The penalty is calculated as ALE number of full-time employees (minus 30) x $2,000 (as adjusted).

 

  • The Section 4980H(b) penalty can apply when an ALE does not offer coverage to all full-time employees or the ALE’s coverage is unaffordable or does not provide minimum value, and the employee receives an Exchange subsidy. The penalty is calculated as $3,000 (as adjusted) x the number of ALE’s full-time employees who receive an Exchange subsidy.

 

  • For 2021, the adjusted 4980H(a) $2,000 penalty amount is $2,700.
  • For 2021, the adjusted 4980H(b) $3,000 penalty amount is $4,060.

 

Employers with 50 or more full time equivalent employees, also known as Applicable Large Employers (“ALE”), should keep these penalty amounts in mind when reviewing benefit eligibility and employer contributions for 2021 calendar year to avoid penalties.

 

For more information, contact MNJ Insurance Solutions at (714) 716-4303.

 

This content is provided for informational purposes only.  While we have attempted to provide current, accurate and clearly expressed information, this information is provided “as is” and MNJ Insurance Solutions makes no representations or warranties regarding its accuracy  and completeness.  The information provided should not be construed as legal or tax advice or as a recommendation of any kind.  External users should seek professional advice form their own attorneys and tax and benefit plan advisers with respect to their individual circumstances and needs.

CA UPDATE: Commissioner Lara issues Order resulting in workers’ compensation premium savings for California businesses affected by COVID-19

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FOR IMMEDIATE RELEASE:
June 17, 2020
MEDIA INQUIRIES ONLY:
Michael Soller or Byron Tucker: 916-492-3566 916-661-0556 cell
Email inquiries: cdipress@insurance.ca.gov

Commissioner Lara issues Order resulting in workers’ compensation premium savings for California businesses affected by COVID-19
Commissioner’s action mandates workers’ compensation carriers reflect reduced risk of loss in premiums due to “stay-at-home” orders

LOS ANGELES, Calif. — Insurance Commissioner Ricardo Lara today issued an Order adopting emergency workers’ compensation regulations in response to the COVID-19 pandemic. These new regulations will mandate insurance companies to recompute premium charges for policyholders to reflect reduced risk of loss consistent with Commissioner Lara’s April 13 and May 15, 2020 Bulletins, and will result in savings for many policyholders as businesses continue to struggle financially during the COVID-19 pandemic.

“California’s business owners have been hit hard by COVID-19,” said Commissioner Lara. “Workers’ compensation premiums should reflect that many employees are performing less risky duties, and my Order will provide some financial relief for employers when they need it most.”

Under these emergency regulations, employers are permitted to reclassify an employee if the employee’s duties have changed to a clerical classification that has reduced risk than the employee’s previous classification. This reclassification will reduce the employer’s premiums for employees who are a lower risk because they are now working from home even though they may not have previously done so. This change would be retroactive to March 19, 2020, the first day of the Governor’s statewide stay-at-home order, and conclude 60 days after the order is lifted.

“We applaud Commissioner Lara’s efforts to meet the needs of California’s small businesses as they continue to navigate the COVID-19 crisis,” said Mark Herbert, Vice President, California for Small Business Majority. “These new rules will allow small business owners to correctly reclassify their workforce if their duties have changed, helping businesses keep more money in their pockets as they respond to a decline in revenue and adapt their business models. These rules will also ensure small businesses are better positioned for the long-term by protecting them from future increases in workers’ compensation premiums due to COVID-19. This kind of smart action will ensure our state’s job creators and innovators have the tools they need to succeed after this crisis.”

These emergency regulations also exclude from premium calculations the payments made to an employee, including sick or family leave, while the employee is not performing duties of any kind for the employer. Typically, these payments would be used as a basis for the employer’s workers’ compensation premium. This change will lower the employer’s rate by reducing the amount of payroll assessed, and the employer will not pay premium for paid workers who are otherwise being furloughed.

“These changes provide clarity to employers while helping to share any financial costs of work-related COVID-19 cases among all employers—not just those who found themselves at the center of the epidemic,” said Mitch Steiger, Advocate for the California Labor Federation, who is also a member of the Workers’ Compensation Insurance Rating Bureau (WCIRB) Governing Board. “In doing so, both workers and employers most affected by this crisis can more quickly begin the process of recovery.”

This new regulation will also exclude claims related to a COVID-19 diagnosis from being included in future rate calculations so that employers are not penalized with higher rates due to COVID-19 claims.

Insurers will also be required to report injuries involving a diagnosis of COVID-19 which will allow the Commissioner’s statistical agent—the WCIRB—to keep track of COVID-19 injuries, and will aid in the WCIRB’s future analyses of the workplace and market impacts.

The new regulations will go into effect on July 1, 2020.

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Media note:
• Link to Commissioner’s Decision and Order

Insurance Carriers’ Responses to COVID-19

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We recognize this is a challenging time for everyone and MNJ Insurance Solutions remains committed to be a resource to those we serve, our clients, our prospect clients, our business partners, our insurance carriers, and our communities.

We continue to monitor the spread of COVID-19 and the impact around us.  One of the most common questions that we are receiving from our clients is “How are the insurance carriers covering COVID-19?”

Use the links below for Frequently Asked Questions, resources, and more information on how our carriers are covering COVID-19:

Our work does not stop in light of this pandemic and our team is here to answer your questions and help with you and your employees’ insurance needs.  Contact us at (714) 716-4303 if you have any questions regarding your health insurance plans and COVID-19 and we will do our best to help find solutions.

Disclaimer:  Information is subject to change at any time.  For the most current information on COVID-19 and recommendations on how to protect yourself and others during this pandemic, please visit the CDC for more details.

President Trump Announces National Guidelines to Limit Coronavirus Spread

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On Monday, March 16, 2020, President Trump held a news conference to reinforce guidelines intended to slow the spread of COVID-19. He asked Americans to follow the guidelines for the next 15 days:

  • President Trump and his advisors now say to avoid social gatherings and if needed, limit gatherings to under 10 people (down from the “under 50 people” recommendation days earlier).
  • Trump emphasized the importance of self-isolation during this critical time. It was recommended children should be schooled at home, and employees should work from home.
  • Continue to wash your hands, cover your mouth when coughing or sneezing, and create social distancing of 6-feet.

This isolation strategy will hopefully contain individuals who may be carrying the virus and are not aware of it. The administration acknowledged the prevalence of young, healthy individuals without severe symptoms have been unknowingly spreading COVID-19 and want to prevent further spread of the virus.

Unfortunately, no one can be certain how long this pandemic will last. When prompted, Trump suggested the virus may “wash through” the country by July or August, if the administration’s proposed guidelines are followed.

Stay tuned for more updates from MNJ Insurance Solutions about this ongoing pandemic.

Practical Tips for Employers & Employees: Coronavirus Pandemic

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In uncertain times such as these, employees are looking for guidance wherever they can find it. Listed below are practical tips Employers can help calm some of their employees’ fears by taking the following actions:

  • Communicate the future of the business with employees in meetings, on the company intranet site, in newsletters.
  • Educate employees that there are cyber criminals that may prey on individuals during times of panic and hardship.  Be careful of cyber scams.
  • Be empathetic in your communications, as every employee’s situation may be different.

 

In these uncertain times, it’s imperative that you communicate your business’ plans as frequently as possible. While it is impossible to control the pandemic, it is possible for you to help ease the stress your employees are experiencing.

For additional employee communications or resources regarding the COVID-19 pandemic, contact MNJ Insurance Solutions.

California Individual Mandate Returns in 2020

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Beginning in 2020, California imposes a state individual mandate that requires individuals in California to maintain health coverage or pay a penalty. The California law largely mirrors the federal individual mandate requirement under the Affordable Care Act (ACA) that was effectively eliminated, beginning in 2019.  California’s individual mandate requires most individuals in the state (and their family members) to be covered under minimum essential coverage for each month of the year, beginning in 2020.

Similar to what we saw in the past with the ACA individual mandate, California’s individual mandate penalty is calculated in the same manner. The penalty is the greater of two amounts, the flat dollar amount ($695) or the percentage of income amount (2.5% of income).

For a limited time, you can still sign up through April 30, 2020 but you’ll have to enroll quickly to avoid paying the penalty.

You have until April 30, 2020 to apply if you just learned about the new financial help available to almost 1 million Californians or the new state penalty for not having insurance. You can still apply even if you already have coverage through a company like Kaiser Permanente, Blue Shield, Health Net or any other plan outside of Covered California. After you enroll, your coverage will start the first day of the next month, but April 30th is a firm deadline, unless you have a qualified event/special enrollment period.

Let us know if you have any questions or need help applying for Health Insurance coverage.

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