NABIP-TX Applauds Bipartisan Introduction of the Independent BROKERS TIME Act of 2025 and Court Decision Protecting Broker Compensation
The Texas chapter of the National Association of Benefits and Insurance Professionals (NABIP-TX) commends both Congress and the courts for actions that protect seniors’ access to trusted, licensed insurance professionals.
On August 18, Senators Mike Rounds (R-SD) and Catherine Cortez Masto (D-NV) introduced the Independent Broker Relief and Oversight of Knowingly Egregious and Repetitive Sales Tactics in Medicare Enrollment Act of 2025, known as the Independent BROKERS TIME Act of 2025 (S. 2625).
The legislation addresses urgent issues impacting seniors and the professionals who serve them by:
• Clarifying the definition of Third Party Marketing Organizations (TPMOs) to distinguish independent agents and brokers from large, unregulated call centers.
• Strengthening oversight of call centers, including whistleblower rewards.
• Creating a standardized registration process for independent brokers and carriers to reduce redundant and inconsistent compliance requirements
• Eliminating the 48-hour waiting period rule, which delays seniors’ ability to meet with a trusted professional.
• Directing the HHS Inspector General to review and report on harmful call center practices targeting Medicare beneficiaries.
“Texans deserve clear, professional guidance when navigating Medicare options,” NABIP-TX President Scott Long stated. “This bill helps ensure seniors can rely on licensed, independent brokers while reducing unnecessary compliance burdens.”
In a separate development, U.S. District Judge Reed O’Connor recently vacated two provisions of CMS’s 2024 Compensation Rule: the Fixed Fee requirement and the Contract-Terms Restriction. Had they taken effect, these provisions would have redefined compensation for insurance agents and brokers to include administrative payments and capped all compensation at a fixed national rate.
Such restrictions would have decreased earnings for licensed agents and eliminated incentives for brokers to specialize in products tailored to seniors’ needs. NABIP-TX applauds the court’s decision, which protects fair compensation and ensures the continued vitality of the profession.
Together, these wins highlight NABIP-TX’s commitment to defending both consumer protection and professional advocacy. By curbing deceptive marketing while safeguarding fair broker compensation, policymakers and the courts have reinforced the essential role independent brokers play in helping Texans access quality, affordable healthcare coverage.
About NABIP-TX
NABIP-TX is the Texas chapter of the National Association of Benefits and Insurance Professionals, representing thousands of licensed health insurance agents, brokers, and benefits consultants across the state. Our members work daily to ensure that Texans have access to high-quality, affordable healthcare and benefits.
BREAKING TEXAS LEGISLATIVE NEWS (DING, DONG, THE SENATE BILL 51 WITCH IS DEAD!)
Authored by Mike and Shannon Meroney, Meroney Public Affairs
A long-awaited legislative fix to one of the most burdensome administrative rules in group health insurance has passed the Texas Legislature. Senate Bill 1332, authored by Sen. Kelly Hancock (R-North Richland Hills), and its companion House Bill 2583, sponsored by Rep. Lacey Hull (R-Houston), have both passed their respective chambers with a two-thirds majority vote, positioning the bill to take immediate effect upon becoming law.
While Governor Greg Abbott’s signature is still pending, the supermajority passage means that even if unsigned, the bill will automatically become law 10 days after being presented to the Governor (excluding Sundays). This timeline ensures the law will be effective in time for retroactive group health plan terminations processed as soon as June 2025 (for terminations in late May 2025). It also provides important relief ahead of the upcoming July 4th holiday—a holiday that has historically proven especially problematic for retroactive terminations.
The Problem: SB 51 and a 20-Year-Old Headache for Employers
SB 1332 / HR 2583 addresses a long-standing issue originating from Senate Bill 51, passed during the 79th Legislative Session in 2005. That law created one of the most rigid deadlines in benefits administration: if an employee’s group coverage ends during the last seven days of a month, the employer must notify the insurer no later than the third day of the following month. Missing that deadline results in the employer being charged a full additional month of premiums — even if the former employee used no covered services.
Additionally, while technological advancements have streamlined many aspects of benefits administration over the past 20 years, they have also revealed just how outdated and unforgiving these rules have become. Many employers and insurance carriers now rely on Electronic Data Interchange (EDI) feeds, which typically transmit weekly. If a termination occurs during the last week of the month and the EDI feed doesn’t transmit before the third day of the following month, the employer can be held financially responsible for an entire extra month of premium — without recourse.
This disconnect between modern systems and legacy policy rules has only increased the urgency for reform—and this legislative change provides a clear path forward.
What SB 1332 / HB 2583 Does
The new legislation gives insurers the discretion to waive premium liability in cases where the employer submits a termination notice late—but only if no covered services were used after the employee’s eligibility ended.
Key Provisions:
- Applies to fully insured group health plans issued in Texas
- Allows the carrier to waive premiums for months following late-submitted terminations
- Waiver is only allowed if no claims were incurred after the end of the eligibility month
- Does not apply to self-funded or level-funded (ERISA) plans (note: these plans are already unaffected by SB 51 rules)
- Will become immediately effective once the Governor signs the bill or allows it to become law after 10 days without action
Timing and Implementation
Because both the Senate and House passed the legislation with a two-thirds vote, the law is eligible for immediate effect—meaning it will go into effect as soon as it becomes law, rather than waiting until the usual default September 1, 2025 date.
This timing is especially meaningful for employers processing late-May terminations (in early June) or preparing for administrative challenges around the July 4th holiday. Once the 10-day constitutional window has passed, insurers will be permitted to begin applying the waiver as outlined in the law.
Congratulations to NABIP-TX’s Legislative Council on a job well done for our membership and their customers!
Squatters How to Protect and Evict
by Ron Byrd
Last fall, my friend Brian Thompson, who manages a senior 55+ community, was startled whenhe discovered unauthorized occupancy in one of the properties under his care. Upon investigation, he reached out to the owner, a Winter Texan from the Midwest, to inquire if they had arrived early for their scheduled check-in date. To Brian's dismay, the owner confirmed that they were not due to arrive until the following month. It became evident to Brian that there was a squatter residing in the property without invitation and later found out that the person who had taken up residence, was an illegal immigrant. Brian promptly informed the owner of the situation, initiating a challenging endeavor to regain rightful possession of the property on behalf of its legal owner from the Midwest.
Squatters, enigmatic individuals who take up residence in abandoned or unoccupied properties,have always fascinated and puzzled property owners. Their ability to potentially gain legal ownership of the premises they inhabit often leaves people wondering and worrying. Squatters' rights, a legal concept present in various forms across the United States, including Texas, add complexity to the situation. The criteria for asserting these rights differ from state to state, underscoring the importance of understanding local laws thoroughly. In Texas, the specifics of squatters' rights diverge from those in other states. While it's reassuringly challenging for squatters to meet all the prerequisites for a successful legal claim to your property, beingproactive is wise. This article will delve into squatters' rights in Texas and elucidate the workings of adverse possession within the state.
When a squatter asserts legal possession of your property, they are not required to make any payments for it. It underscores the importance of comprehending the pertinent Texas laws to prevent finding yourself in such a predicament. Failing to initiate eviction proceedings or notify the authorities can lead to the squatter transitioning from being seen as a criminal trespasser to potentially acquiring rights to your property and initiating a claim for it. It's crucial to note that self-eviction is unlawful in Texas. Adhering to the correct eviction procedures is imperative throughout the legal dispute, regardless of the outcome of the eviction lawsuit. Attempting to evict a tenant independently is prohibited at any stage.
Squatter's rights, also termed adverse possession, encompass the legal principles permitting squatters to acquire ownership of a property through prolonged occupation, even in the absence of the owner's consent. Though squatter's rights may appear outdated in modern times, adverse possession principles were originally established to incentivize productive land use and deter property neglect. While there is no overarching federal legislation concerning squatter's rights, legal precedents exist for them in each state, along with laws delineating certain requirements for asserting an adverse possession claim.
To establish adverse possession in Texas, a squatter must satisfy one of the following conditions outlined in Tex. Prop. Code § 16.024-16.026:
- Occupy the property with color of title continuously for a minimum of three years.
- Occupy the property, possess a recorded deed in their name, fulfill all property tax obligations,and cultivate the land uninterruptedly for at least five years.
- Occupy the property and enhance the land continuously for a minimum of ten years. (Note: The parcel must be smaller than 160 acres unless enclosed.)
It's important to note that the shorter the duration of occupation, the more stringent the requirements become for asserting an adverse possession claim. In Texas, color of title is solely necessary for adverse possession if a squatter seeks to claim the land after three years of occupation. "Color of title" denotes a legal assertion to a property lacking one or more of the appropriate documents, such as an official deed.
Squatters must also fulfill five general criteria:
- Hostile/Adverse Possession: The squatter must lack a valid lease or rental agreement with the property owner.
- Actual Possession: The squatter must have actively resided on the property for a specific duration.
- Open and Notorious Possession: The squatter's occupancy of the property must be openly evident to neighbors or anyone else; they cannot reside there covertly or attempt to conceal their presence.
- Exclusive Possession: The squatter must possess the property solely, without sharing it with others, and must prevent others from occupying it as an owner would.
- Continuous Possession: The squatter must maintain uninterrupted and continuous possession of the property for a specified period (three to ten consecutive years in Texas).
How to Evict a Squatter in Texas
In Texas, as in nearly all other states, removing a squatter requires following the complete judicial eviction process. Treating the squatter akin to any other tenant ensures the invalidation of any adverse possession claim they might attempt. Upon discovering a squatter residing in your property, it's imperative to serve them with a proper eviction notice, file a formal eviction complaint in court, and either personally attend or have your attorney represent you at a hearing to lawfully evict the squatter.
Here's an outline of the eviction procedure for squatters in Texas:
- The property owner must issue a formal eviction notice, adhering to Texas eviction laws. Typically, in Texas, a three-day notice to quit is the default, although landlords can stipulate a shorter or longer notice period if specified in the lease agreement.
- Following the expiration of the notice period, the property owner must file a complaint of forcible detainer with the Texas Justice of the Peace Court. Opting for immediate possession may hasten the eviction process.
- The court will issue a summons or "citation" to court, which the sheriff or constable must serve to the squatter.
- The property owner must appear at a hearing to present evidence of lawful ownership of the property to the judge.
- After confirming ownership, the judge will issue a writ of possession, typically five days following the judgment. This writ serves as final notice for the squatter to vacate the premises.
- If the squatter fails to vacate within 24 hours after receiving the writ, the sheriff will return to forcibly remove the squatter and restore legal possession to the owner.
- Remember that police officers cannot remove squatters—you must call the sheriff, who has the appropriate jurisdiction to remove the squatter.
Tips for Preventing Squatters in Your Vacant Texas Property
To safeguard your vacant property from potential squatters, consider implementing these
practical measures:
- Conduct regular inspections of your property to detect any unauthorized occupation.
- Create an appearance of occupancy during vacancy periods by maintaining the property's appearance.
- Install robust lighting and security systems to discourage unlawful entry.
- Ensure all entry points, including doors, windows, and access points, are securely locked andreinforced.
- Display conspicuous "No Trespassing" signs on the premises.
- Encourage neighbors to report any suspicious activities or individuals.
- Consider enlisting a property management company to oversee and upkeep the property in your absence.
- If possible, keep the property in use, even temporarily, to deter potential squatting.
- Foster a positive relationship with local law enforcement and inform them of the property's vacancy to enhance patrols and response to trespassing incidents.
- Educate yourself about Texas squatters' rights and stay informed about any legislative changes regarding adverse possession laws in the state.
- Seek guidance from a knowledgeable real estate attorney regarding any inquiries or concerns regarding Texas laws pertaining to squatters or adverse possession.
RE: Brian and the squatter, upon the arrival of the Sheriff after being called, the unauthorized occupant voluntarily vacated the premises and was turned over to Border Patrol. This incident served as a valuable lesson for all parties involved.
Illegal Immigrants and Medicaid And The Cost To Texans
By Ron Byrd
As it has been the talk from some time now about Illegal border crossing and the cost to host and help those in need, often we don’t stop and think about the burden on our healthcare system and what it cost Texas taxpayers.
While the Texas Department of State Health Services (DSHS) post about the care that hospitals and doctors should adhere to, when it comes to the Immigrant Rights Healthcare Fact Sheet, it plainly states that you can still get health care without insurance. This applies to all citizens and those crossing the border.
Doctors and nurses care about your health, not your immigration status. Health care workers are reminded that they shouldn’t ask for immigration status for those who are admitted to Hospital emergency rooms. ER’s should help anyone that is needing emergency services. DSHS instructs people that if asked about your health insurance, people are allowed to say, “I am not eligible for health insurance and don’t want to apply.”
AG Ken Paxton in his January lawsuit discovered that Texans pay between $579 and $717 million each year for public hospital districts to provide
uncompensated care for illegal aliens.
Texans paid $152 million to house illegal criminal aliens for just one year.
Texans pay between $62 million and $90 million to include illegal aliens in the state Emergency Medicaid program.
Texans paid more than $1 million for The Family Violence Program to provide services to illegal aliens for one year.
Texans pay between $30 million and $38 million per year on perinatal coverage for illegal aliens through the Children’s Health Insurance Program.
Texans pay between $31 million and $63 million to educate unaccompanied alien children each year.
In a House Homeland Security Committee report noted that health care costs, including Medicaid expenditures for illegal immigrants estimated at over $5 billion a year, the costs of the fentanyl crisis, law enforcement costs, and costs for states to educate migrant children. It also points to the costs of housing and sheltering— particularly in the enormous costs seen in cities like New York City where tens of thousands of migrants have traveled after being released into the U.S., and the costs to ranchers and local businesses near the border. New York City Mayor Eric Adams earlier this year estimated the city’s crisis alone could cost $12 billion by 2025.” The Center for Immigration Studies in May 2023 stated that spending could cost as much as an astounding $451 billion per.
With the United States population roughly at 330 million, and the additional 15 million illegal migrants if federal and state government are spending only $160 billion per year, that would be equivalent of $500 per American man, woman child and retiree.
If the $500 per American was not spent on migrants, it would otherwise go to American needs, vs higher wages, lower taxes and lower rents, reduced government deficits or more investment in Americans’ schools, technology, and infrastructure.
Even if the migrants can secure jobs, their wages are often too little to pay off their smuggling debts, their rental checks, and basic needs.
In Texas alone, it’s reported that Undocumented immigrants (UDI’s) represent and estimated 6.7% of the population of Texas (1.65 million people).
Trauma literature from the southwest US had documented that smuggling of immigrants in overloaded vehicles resulted in 38 crashes being chased by border patrol that send many to Hospitals emergency rooms with severe trauma.
In a study over four years at Texas A&M/CHRISTUS Spohn Memorial Hospital in Corpus Christi, (150 miles by road from the closest border with Mexico), a total of 128 patients were enrolled that reveled 79.7% were male, the length of stay was 13.2 days with a maximum stay of 210 days . Motor vehicle accidents accounted for 75% of trauma patients brought to the Hospital by Border Patrol.
Thirty of these patients were admitted on 4 distinct calendar days in separate months while fleeing from Border Patrol in vehicles that resulted in multiple-casualty accidents totaling over $6.8 million in hospital charges.
So, the question is, where and when will it all end. Compliance and ethical standards are in playas many families want a better life for their children and as most of would agree, we would beg, borrow, or steal to feed hungry children. But breaking the law brings consequences.
Today, illegal aliens and their U.S. children are eligible to receive emergency medical service, primary and secondary education, school nutrition services and Aid to Families with Dependent Children (AFDC) and food stamps. With the few facilities that can collect to date in Southern Texas, Attorney General Paxton says, “Texas will always welcome those who legally immigrate, but we cannot continue forcing taxpayers to foot the bill for individuals who skirt the law and skip the line. I will continue to fight for justice, safety, and prosperity for all Texans.”
OpEd: Thankful for Ban on Surprise Medical Bills
OpEd: Thankful for Ban on Surprise Medical Bills
By Angela Theesfeld, Texas Association of Health Underwriters (TAHU)
Let’s say you injure yourself in the backyard. You trip over an extension cord, fall off a 3-foot ledge and land face-first onto concrete pavers. You chip a front tooth, dislocate a pinkie, bash your forehead, splatter your nose, and suffer a mild concussion.
Someone carts you to an emergency room where you’re treated by an ER doctor, who orders X-rays and cleans you up, but then decides you need to spend the night at the hospital for observation because she doesn’t like the look of the big bump on your head.
The next day, you’re released, return home and vow to get rid of all the extension cords!
Fortunately, you have state-regulated, fully-insured health insurance so your pain and loss are merely pain and loss. But two or three years ago, if this had happened to you, it might have been financially catastrophic.
For example, if you had damaged an eye socket, torn a tendon, or ruptured fibrous muscles that allow you to wiggle your fingers, you might have been forced to see several specialists. And if those specialists weren’t in your insurance company’s network, then they were not contractually required to limit their rates in any way. They could have sent you a “surprise medical bill”, charged whatever they wanted, whether it seemed fair or reasonable at all.
So, now imagine what it might have been like if you had had a heart attack or a stroke. Unable to consent to treatment, you might have been taken by air-ambulance to a critical care center and treated by multiple specialists — a cardiologist, a radiologist, an anesthesiologist. If one or more of them were not “in-network,” the surprise medical bills might have not only ruined you financially, they could have sent you back into cardiac arrest.
Nearly half of Americans fear unexpected medical bills, according to a 2020 Harris poll. More than four out of 10 say they couldn’t pay a $1,000 surprise medical bill, so support for some type of relief cuts across all political lines in all corners of the nation.
Fortunately, Texans covered by state-regulated health insurance can rest comfortably, knowing that if they face a medical emergency, they won’t be sucker-punched with these surprise bills.
In 2019, the Texas Legislature passed Senate Bill 1264 by Sen. Kelly Hancock (R-North Richland Hills) and Rep. Tom Oliverson (R-Cypress), which took effect in January 2020. It prohibits health care providers — doctors, nurses, clinics, hospitals, and labs — from demanding that consumers pay through the nose when out-of-network services are provided, either with or without the patient’s consent. The law now bans them from sending surprise medical bills directly to patients.
If a dispute arises between a medical provider and an insurance carrier, SB 1264 requires them to enter dispute resolution – first an informal phone call; then mediation; or finally, arbitration if the dispute can’t be solved.
Here’s the best part: the patient is no longer part of the equation. In the case of billing disputes, the provider and carrier must work out their differences, and not involve patients. This Thanksgiving season, we can be thankful that state lawmakers have gotten this policy right for consumers.
Inspired by Texas, similar federal legislation takes effect January 1, 2022, and should provide relief for people covered by a self-funded plan or ERISA (Employee Retirement Income Security Act), which sets minimum standards for health plans obtained directly by employers for their employees.
Texas’ 2019 law change was strongly supported by the Texas Association of Health Underwriters (TAHU) which represents more than 1,400 health insurance agents and brokers across Texas and serves as the chief advocate for consumers at the Texas Capitol. Independent agents play a crucial role in helping individuals and businesses shop for and find the best health insurance plan for their needs.
According to the Texas Department of Insurance (TDI), it has received in the past 18 months 98,586 eligible requests to resolve medical billing disputes totaling $450 million.
Of those that went to arbitration, 49% were settled in the first 30-days. 35% were settled by an arbitrator. 15% were withdrawn or deemed ineligible.
Of those that went to mediation, 82% were settled in the first 30-days. 1% was settled by a mediator. 17% were withdrawn or deemed ineligible.
Meanwhile, according to the TDI, consumer complaints about surprise billings have plummeted by 96% — from 1031 in 2019 to just 40 in 2020.
So, what are the big takeaways?
- Americans universally express deep fears of being saddled with unexpected medical expenses.
- Under significant political pressure to respond, Texas lawmakers adopted ground-breaking reforms that are being replicated nationwide.
- Medical bill disputes are still happening, and requests for mediation and arbitration continue to climb. The dispute resolution process will undoubtably require additional data, definition and interpretation.
- This issue is very complicated, and it’s been made even more complicated by COVID-19.
- While SB 1264 faces procedural, institutional, practical, and political challenges ahead, Texas lawmakers should be commended for passing a well-written and carefully researched piece of legislation.
Through TAHU, health insurance agents and brokers remain committed to supporting efforts to find a solution to this most challenging problem, and we give thanks for the progress already made. Finally, watch out for those extension cords, raised ledges and concrete pavers!
Angela Theesfeld of San Antonio, chairs the Legislative Council of the Texas Association of Health Underwriters (TAHU): more than 1,400 members in Texas – agents, brokers and carrier representatives – who help clients and employers of all sizes find the best health insurance for their needs. [email protected] or (210) 384-5349
Texas Department of Insurance hosted a webinar on the new Agent Licensing Rules
https://www.tdi.texas.gov/
Click HERE For a high level executive summary.
The few glimmers of hope for negotiation seem to be long gone, and neither side appears to be in the mood for dialogue. Republicans believe they have already compromised plenty on the legislation, while Democrats are distrustful of both the policy driving the legislation and their GOP colleagues after seeing how they managed the process around the bill, especially at the end of the regular session in May.
Gov. Greg Abbott has vowed to call special session after special session until the elections bill passes, and he has said the next one will begin the day after this one ends; a special session can end early, but can’t go longer than 30 days, and Friday is the 30th day.
Other than the elections bill, there has been little progress made toward restoring legislative funding that Abbott vetoed in retaliation for the Democrats’ initial walkout over the bill. The clock is ticking — the funding was set to begin on September 1st. That issue could be resolved at the Texas Supreme Court, after a group that includes House Democrats and legislative staffers asked the court to override Abbott’s veto.
TDI recently hosted the plain language webinar series, "Writing policies in plain language: Learn how to cut jargon, save time, and earn customer trust."
|
Wichita Falls Insurance Agent Kelly Fristoe Named Vice President of NAHU
Wichita Falls Insurance Agent Kelly Fristoe Named Vice President of NAHU
WASHINGTON, DC -- Kelly Fristoe, a Wichita Falls, Texas-based insurance agent, was appointed vice president of the National Association of Health Underwriters’ Board of Trustees at its 90th Annual Convention, hosted virtually earlier this week.
"Kelly has spent over two decades supporting and leading his fellow NAHU members," said Janet Trautwein, CEO of NAHU. "I am confident he will continue his excellent track record as our next vice president."
Fristoe has worked in the insurance industry for 30 years, most recently as a partner and founding member of Wichita Falls, TX based Financial Partners. He joined NAHU in 1993 and has served in over two dozen leadership positions across his local and national chapters. Fristoe served as president of the Texoma Association of Health Underwriters from 1995-96 and president of the Texas Association of Health Underwriters from 2012-13. He was secretary of the NAHU Board of Trustees from 2018-19 and treasurer from 2019-20.
Fristoe attended both Lubbock Christian University and Texas Tech University. He currently resides in Wichita Falls with his wife, Jana.
"I am thrilled to be serving as vice president of NAHU's Board of Trustees," Fristoe said. "I have spent three decades working to improve our industry, and I look forward to continuing that work with my fellow board members."
The National Association of Health Underwriters represents 100,000 professional health insurance agents and brokers who provide insurance for millions of Americans. NAHU is headquartered in Washington, DC. For more information, visit www.nahu.org.
###
IRS Releases FAQs on COVID-19-related Tax Credits
IRS website, "COVID-19-Related Tax Credits for Required Paid Leave Provided by Small and Midsize Businesses FAQs"
On its website, the IRS has released a series of frequently asked questions regarding credits for wages paid for family and medical leave and for emergency paid sick time.
Background. The Families First Coronavirus Response Act (P.L. 116-127, the FFCRA or the Act), which is intended to ease the economic consequences stemming from the novel coronavirus disease (COVID-19) outbreak, provides family and medical leave, and sick leave, to employees and providing tax credits to employers providing the leave.
Family and medical leave. The Act includes the Emergency Family and Medical Leave Expansion Act (EFMLEA) (Division C of the Act), which requires employers with fewer than 500 employees ("Eligible Employers") to provide both paid and unpaid public health emergency leave to certain employees through December 31, 2020. The first 10 days of leave may be unpaid and then paid leave is required, calculated based on an amount not less than two-thirds of an employee's regular rate of pay and the number of hours the employee would otherwise be normally scheduled to work, not to exceed $200 per day and $10,000 in the aggregate.
Emergency paid sick time. Under the Emergency Paid Sick Leave Act (EPSLA) (Division E of the Act), private employers with fewer than 500 employees, and public employers of any size, must provide 80 hours of paid sick time to full-time employees who are unable to work (or telework) for specified virus-related reasons.
For more information on EFMLEA and EPSLA, see Coronavirus information relevant to tax professionals - a summary, Federal Tax Update (03/20/2020).
Employer tax credits. The Act provides tax credits to employers to cover wages paid to employees while they are taking time off under the EPSLA and EMFLEA (referred below as "qualified leave wages"). (Act Sec. 7001; Act Sec. 7003) The credits have three components:
-
- The EPSLA credit for each employee is equal to the lesser of the amount of his leave pay or either
- $511 per day while the employee is receiving paid sick leave to care for themselves, or
- $200 if the sick leave is to care for a family member or child whose school is closed.
An additional limit applies to the number of days per employee: the excess of 10 days over the aggregate number of days taken into account for all preceding calendar quarters. (Act Sec. 7001(b))
- The EMFLEA credit for each employee is the amount of his leave pay limited to $200 per day with a maximum of $10,000. (Act Sec. 7003(b)(1))
- The EPSLA credit for each employee is equal to the lesser of the amount of his leave pay or either
- The amount of the EPSLA and EMFLEA credits are increased by the portion of the employer's "qualified health plan expenses" that are properly allocable to qualified sick leave wages or qualified family and medical leave wages. Qualified health plan expenses means amounts paid or incurred by the employer to provide and maintain a group health plan (as defined in Code Sec. 5000(b)(1)), but only to the extent that such amounts are excluded from the gross income of employees by reason of Code Sec. 106(a). (Act Sec. 7001(d); Act Sec. 7003(d))
- In addition, the credits allowed to employers for wages paid under the EPSLA and EFMFLEA are increased by the amount of the tax imposed by Code Sec. 3111(b) (the 1.45% hospital insurance portion of FICA) on qualified sick leave wages, or qualified family leave wages, for which credit is allowed under Act Sec. 7001 or Act Sec. 7003. (Act Sec. 7005(b))
IRS FAQs. The IRS has issued a series of FAQs regarding the credits.
General issues. FAQ 4 says that Eligible Employers claiming the credits for qualified leave wages (and allocable qualified health plan expenses and the Eligible Employer's share of Medicare taxes), must retain records and documentation related to and supporting each employee's leave to substantiate the claim for the credits, and retain the Forms 941, Employer's Quarterly Federal Tax Return, and 7200, Advance of Employer Credits Due To COVID-19, and any other applicable filings made to the IRS requesting the credit.
FAQ 16 explains that a business is considered to have fewer than 500 employees if, at the time an employee's leave is to be taken, the business employs fewer than 500 full-time and part-time employees within the US, which includes any State of the United States, the District of Columbia, or any Territory or possession of the US. Department of Labor (DOL) guidance provides a more detailed summary of which workers must be taken into account for purposes of the fewer than 500 employee threshold. DOL guidance also explains when business entities should be treated as separate employers and when they should be aggregated as a single employer for purposes of determining their total number of employees. For more information, see the Department of Labor's Families First Coronavirus Response Act: Questions and Answers.
FAQ 18 asks whether an Eligible Employer can receive both the tax credits for qualified leave wages under the FFCRA and the employee retention credit under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act)?
The IRS says yes. If an Eligible Employer also meets the requirements for the employee retention credit, it may receive both credits, but not for the same wage payments.
For more information about the employee retention credit, see Business tax provisions in Senate-passed third coronavirus relief package (03/27/2020).
Qualified health plan expenses. FAQ 31 says that the amount of qualified health plan expenses taken into account in determining the credits generally includes both the portion of the cost paid by the Eligible Employer and the portion of the cost paid by the employee with pre-tax salary reduction contributions. However, the qualified health plan expenses should not include amounts that the employee paid for with after-tax contributions.
FAQ 32 asks, for an Eligible Employer that sponsors more than one plan for its employees (e.g., both a group health plan and a health flexible spending arrangement (health FSA)), or more than one plan covering different employees, how are the qualified health plan expenses for each employee determined?
The IRS says that the qualified health plan expenses are determined separately for each plan. Then, for each plan, those expenses are allocated to the employees who participate in that plan. In the case of an employee who participates in more than one plan, the allocated expenses of each plan in which the employee participates are aggregated for that employee.
FAQ 33 and FAQ 34 ask, for an Eligible Employer who sponsors a fully-insured group health plan (FAQ 33) or a self-insured group health plan (FAQ 34), how are the qualified health plan expenses of that plan allocated to the qualified sick or family leave wages on a pro rata basis?
The IRS says that an Eligible Employer may use any reasonable method to determine and allocate the plan expenses, including
- The COBRA applicable premium for the employee typically available from the insurer,
- One average premium rate for all employees, or
- A substantially similar method that takes into account the average premium rate determined separately for employees with self-only and other than self-only coverage.
FAQ 35 asks, for an Eligible Employer who sponsors a health savings account (HSA), or Archer Medical Saving Account (Archer MSA) and a high deductible health plan (HDHP), are contributions to the HSA or Archer MSA included in the qualified health plan expenses?
The IRS says that the amount of qualified health plan expenses does not include Eligible Employer contributions to HSAs or Archer MSAs. Eligible Employers who sponsor an HDHP should calculate the amount of qualified expenses in the same manner as an insured group health plan, or a self-insured plan, as applicable.
FAQ 36 asks, for an Eligible Employer who sponsors a health reimbursement arrangement (HRA), a health flexible spending arrangement (health FSA), or a qualified small employer health reimbursement arrangement (QSEHRA), are contributions to the HRA, health FSA, or QSEHRA included in the qualified health plan expenses?
The IRS says that the amount of qualified health plan expenses may include contributions to an HRA (including an individual coverage HRA), or a health FSA, but does not include contributions to a QSEHRA. To allocate contributions to an HRA or a health FSA, Eligible Employers should use the amount of contributions made on behalf of the particular employee.
Wages and credits included and deducted from employer income. An Eligible Employer must include the full amount of the credits for qualified leave wages (and any allocable qualified health plan expenses and the Eligible Employer's share of the Medicare tax on the qualified leave wages) in gross income. (FAQ 49)
In addition, generally, an Eligible Employer's payments of qualified leave wages (and any allocable qualified health plan expenses and the Eligible Employer's share of the Medicare tax on the qualified wages) are deductible by the Eligible Employer as ordinary and necessary business expenses in the tax year that these wages are paid or incurred.
An Eligible Employer may deduct as a business expense the amounts paid to an employee for qualified leave wages (and any allocable qualified health plan expenses and the Eligible Employer's share of Medicare tax on the qualified leave wages) for which the Eligible Employer expects to claim the tax credits under sections 7001 or 7003 of the FFCRA, if the Eligible Employer is otherwise eligible to take the deduction. (FAQ 50)
The IRS continues that, generally, an employer's payment of certain federal employment taxes is deductible by the employer as an ordinary and necessary business expense in the tax year that these taxes are paid or incurred, and the amount deductible is generally reduced by credits allowed. Although the tax credits under Sec. 7001 and Sec. 7003 of the FFCRA are allowed against the Eligible Employer's portion of the social security tax, the credits are treated as government payments to the employer that must be included in the Eligible Employer's gross income. If the employer is otherwise eligible to deduct its portion of the social security tax on all wages, the proper amount deductible by the employer is the amount of federal employment taxes before reduction by the tax credits. (FAQ 51)
Other issues for employers. FAQ 54 asks whether employees can make salary reduction contributions from the amounts paid as qualified leave wages for their employer sponsored health plan, a 401(k) or other retirement plan, or any other benefits?
The IRS says that the FFCRA does not distinguish qualified leave wages from other wages an employee may receive from the employee's standpoint as a taxpayer; thus, the same rules that generally apply to an employee's regular wages (or compensation, for RRTA purposes) would apply from the employee's standpoint. To the extent that an employee has a salary reduction agreement in place with the Eligible Employer, the FFCRA does not include any provisions that explicitly prohibit taking salary reduction contributions for any plan from qualified sick leave wages or qualified family leave wages.
FAQ 55 asks whether Eligible Employers should withhold federal employment taxes on qualified leave wages paid to employees?
The IRS says yes. Qualified leave wages are wages subject to withholding of federal income tax and the employee's share of social security and Medicare taxes. Qualified leave wages are also considered wages for purposes of other benefits that the Eligible Employer provides, such as contributions to 401(k) plans.
FAQ 56 asks whether a tax-exempt employer can receive the credits?
The IRS says yes. Tax-exempt organizations that are required to provide such paid sick leave or expanded paid family and medical leave may claim the tax credits.
Special issues for employees. Qualified sick leave wages and qualified family leave wages are taxable to employees. (FAQ 57) And they are not excluded from gross income as "qualified disaster relief payments." (FAQ 58)
An employee can receive both "qualified sick leave wages" and "qualified family leave wages," but at different times. Qualified sick leave wages are available for up to 80 hours during which an employee cannot work or telework for any of six reasons related to COVID-19, including because the employee must care for his or her child whose school or place of care is closed, or whose child care provider is unavailable, due to COVID-19 related reasons. By contrast, qualified family leave wages are available only because the employee must care for his or her child whose school or place of care is closed, or because the employee's child care provider is unavailable, due to COVID-19 related reasons, and only after an employee has been unable to work or telework for this reason for 80 hours. (FAQ 59)
U.S. Department Of Labor Announces New Paid Sick Leave and Expanded Family and Medical Leave Implementation
Today, the U.S. Department of Labor announced new action regarding how American workers and employers will benefit from the protections and relief offered by the Emergency Paid Sick Leave Act and Emergency Family and Medical Leave Expansion Act, both part of the Families First Coronavirus Response Act (FFCRA). The Department’s Wage and Hour Division (WHD) posted a temporary rule issuing regulations pursuant to this new law, effective today, April 1, 2020.
FFCRA helps the United States combat the workplace effects of COVID-19 by reimbursing American private employers that have fewer than 500 employees with tax credits for the costs of providing employees with paid leave for specified reasons related to COVID-19. The law enables employers to keep their workers on their payrolls, while at the same time ensuring that workers are not forced to choose between their paychecks and the public health measures needed to combat the virus. WHD administers the paid leave provisions of the Emergency Paid Sick Leave Act and Emergency Family and Medical Leave Expansion Act.
WHD will post a recorded webinar on Friday, April 3, 2020 to provide interested parties a more in-depth description and help them learn more about the FFCRA.
To view the webinar visit https://www.dol.gov/agencies/whd/pandemic
WHD invites webinar viewers to call the agency’s toll-free help line at 866-4US-WAGE to speak with a trained WHD professional about any questions they may have.
WHD offers a number of plain-language compliance assistance materials to explain the FFCRA’s benefits and requirements. Tools include a Fact Sheet for Employees and a Fact Sheet for Employers, available in both English and Spanish, and an expansive list of Questions and Answers addressing the questions WHD has most frequently received from stakeholders to-date. Available guidance also includes two new posters, one for federal workers and one for all other employees, available in both English and Spanish, that will fulfill notice requirements for employers obligated to inform employees about their rights under this new law, Questions and Answers about posting requirements, and a Field Assistance Bulletin describing WHD’s 30-day non-enforcement policy.
WHD provides additional information on common issues employers and employees face when responding to COVID-19 and its effects on wages and hours worked under the Fair Labor Standards Act and job-protected leave under the Family and Medical Leave Act at https://www.dol.gov/agencies/whd/pandemic.
For more information about the laws enforced by the WHD, call 866-4US-WAGE, or visit www.dol.gov/agencies/whd.
For further information about COVID-19, please visit the U.S. Department of Health and Human Services’ Centers for Disease Control and Prevention.
TDI Bulletins and Guidance on COVID-19
The Texas Department of Insurance (TDI) has been busy over the last few days with guidance and bulletins for industry, relating to the COVID-19 pandemic:
April 1st - Coverage for COVID-19 testing and network adequacy
March 31st - Alternative health plan coverage for COVID-19 testing
March 30th - TDI expedites review of COVID-19 filings
March 27th - Claim-submission deadlines; Managed Care Quality Assurance filing requirements; Electronic signatures for escrow checks and directly issued policies; and Suspension of certain provisions of the Labor Code and DWC rules.
Update: COVID-19 Executive Order GA-14, Issued 3/31/20
TAHU and TWC Commissioner Conference Call 03.26.20
Listen to the recording of the conference call on 03/26/20 between TAHU members and TWC Commissioner, Aaron Demerson and his staff, who represent employers in Texas. It's about an hour and 10 minutes long. If you encounter any issues with the recording, please email [email protected].
FFCRA: Employer Paid Leave Requirements
The Families First Coronavirus Response Act (FFCRA or Act) requires certain employers to provide their employees with paid sick leave or expanded family and medical leave for specified reasons related to COVID-19.[1] The Department of Labor’s (Department) Wage and Hour Division (WHD) administers and enforces the new law’s paid leave requirements. These provisions will apply from the effective date through December 31, 2020.
https://www.dol.gov/agencies/whd/pandemic/ffcra-employer-paid-leave
TWC Shared Work Program
The Shared Work program provides Texas employers with an alternative to layoffs.
US Department of Labor Q&A
Furlough Questions and Answers
Information which supplements the OPM Guidance on Furloughs
Guidance on Paid Sick Leave and Expanded FMLA
U.S. Department Of Labor Publishes Guidance Explaining Paid Sick Leave And Expanded Family and Medical Leave Under The Families First Coronavirus Response Act
https://www.dol.gov/newsroom/releases/whd/whd20200324
COVID-19 Important Memorandum
Date: Wednesday, March 25, 2020
To: Members of the Texas Association of Health Underwriters (TAHU)
From: Tonya Booth, TAHU President
Re: Important Updates on Emergency Orders, Bulletins and Document Regarding Insurance as an “Essential Service”
In the event of a “Shelter-in-Place” order in their county or municipality and they are stopped by law enforcement, TAHU suggests that all insurance employees carry a copy of this memorandum and letter with them during their normal course of business. This is not a guarantee that it will be accepted.
Each municipality has the authority to interpret the definition of an “essential business.” We recommend you contact your local government leaders and review their Orders for guidance as well. TAHU is advocating on behalf of our independent insurance agents and brokers and carrier representatives to achieve acknowledgement from the Texas state leadership that insurance is indeed an essential business. Some Orders already reference insurance agents, underwriters and/or brokers by name (Austin). Others define “Essential Services” as those professional services that supply other essential businesses with the support or supplies needed to operate or necessary to assist with compliance of legally mandated activities (Dallas). In those cases, print out a copy of the actual Order and keep it handy along with proof of your TDI license. We will communicate news as soon as we have more information and get clarification. Thank you for serving your communities in this time of need.
This letter is based on guidance from the U.S. Department of Homeland Security’s memo on critical infrastructure workforce. For more clarification about specific jobs, visit: https://www.cisa.gov/publication/guidance-essential-critical-infrastructure-workforce
Here is the language about Financial Services:
FINANCIAL SERVICES
- Workers who are needed to process and maintain systems for processing financial transactions and services (e.g., payment, clearing, and settlement; wholesale funding; insurance services; and capital markets activities)
- Workers who are needed to provide consumer access to banking and lending services, including ATMs, and to move currency and payments (e.g., armored cash carriers)
UPDATES FROM TDI EFFECTING LICENSURE REQUIREMENTS
The Texas Department of Insurance has created a special page with COVID-19 updates and resources. You can access it from their homepage at www.tdi.texas.gov
In addition, there are several Bulletins of note to our members under “Guidance to the Industry” on TDI’s COVID-19 page. Yesterday the Commissioner adjusted licensing and continuing education requirements including waivers and extensions of many deadlines and fees. On Monday, he extended the Prompt Pay deadlines by 15 days and encouraged use of the Grace Period for premium payments. Last week the Governor relaxed telemedicine regulations to allow for increased use during the crisis. Both TDI and the TMB are releasing rules specific to their stakeholders on this issue. The website also lists the carriers agreeing to waive consumer costs for medically necessary testing of COVID-19. There are also helpful Q&As on Travel Insurance, Business Interruption and Workers’ Comp.
Our lobbyists have asked TDI for some relief on Senate Bill 51 requirements around data feeds of employer terminations to carriers in light of the volume of terminations TAHU agents are receiving daily.
As you no doubt have experienced, the situation is fluid and things are changing daily. We encourage you to check our resources at www.tahu.org, our Facebook and Linked In pages for up to the minute details.
OTHER HELPFUL LINKS
Centers of Disease Control and Prevention (CDC)
https://www.cdc.gov/coronavirus/2019-ncov/index.html
World Health Organization (WHO)
https://www.who.int
Texas Department of State Health Services (DSHS)
https://www.dshs.texas.gov/coronavirus/
Texas Workforce Commission (TWC)
https://twc.texas.gov/news/covid-19-resources-employers
Texas State Comptroller
https://comptroller.texas.gov/about/emergency/
Stay calm and stay well.
2020 DATC Presentations
Thanks again to all of you for attending the TAHU 2020 Day at the Capitol in Austin last week. We hope the event exceeded your expectations. As promised, attached are copies of the presentations by Rich Lunsford, TDI Deputy Commissioner and Stacey Pogue, Center for Public Priorities. In addition, Marcy Buckner, NAHU Vice President of Government Affairs' presentation can be found at this link https://prezi.com/view/zppVa8E3epiDe0sHqJPj/.
Please reach out to us if you need anything else. Thanks again for your support of the Texas Association of Health Underwriters!
TAHU PAC, Why Join and Donate?
Ever wondered why the PAC is so important to our Association? Find out HERE
