Compliance Check - April 2021

OVERVIEW

March 2021 was an eventful month with regard to new guidance on recently passed legislation and expanded provisions from the IRS to provide relief to individuals and businesses impacted by the continuing COVID-19 pandemic. Most significantly, on March 11, 2021, the American Rescue Plan Act of 2021 (overview) was enacted into law which, in part, mandates that eligible individuals receive a six-month 100% COBRA.

Below is a summary of the many changes and updates for review.

IRS Notice 2021-21

Due to the COVID-19 national emergency, the Internal Revenue Service (IRS) released Notice 2021-21 (Notice) that extends the deadline for filing income returns on Form 1040, Form 1040-SR, Form 1040-NR, Form 1040-PR, Form 1040-SS, or Form 1040 (SP). The Notice extends the general April 15, 2021, deadline to May 17, 2021. The Notice provides that individuals with a deadline to file a claim for credit or refund of federal income tax filed on the Form 1040 series or on a Form 1040-X that falls on or after April 15, 2021, and before May 17,
2021, have until May 17, 2021, to file the claims for credit or refund.

The Notice also extends the deadline to file and furnish Form 5498 (individual retirement account (IRA) Contribution Information), Form 5498-ESA (Coverdell education savings account (ESA) Contribution Information), and Form 5498-SA (health savings account (HSA), Archer Medical Savings Account (Archer MSA), or Medicare Advantage Medical Savings Accounts (Medicare Advantage MSA) Information). The Notice extends the general June 1, 2021, deadline to June 30, 2021. The deadline for making contributions to IRAs, Roth IRAs, HSAs, Archer MSAs, and Coverdell ESAs has also been extended from April 15, 2021, to May 17, 2021.

 

PPE as Section 213(d) Qualified Medical Expenses

The Internal Revenue Service (IRS) released Announcement 2021-7 providing that amounts paid for personal protective equipment (PPE) such as masks, hand sanitizer and sanitizing wipes, for the primary purpose of preventing the spread of COVID-19, are qualified medical expenses under Internal Revenue Code Section 213(d). Therefore, these expenses are eligible for reimbursement from account-based plans, including health flexible spending arrangements (health FSAs), Archer medical savings accounts (Archer MSAs), health reimbursement arrangements (HRAs), and health savings accounts (HSAs). Note that if the expense is reimbursed under an account-based plan, it is not deductible for the taxpayer under Section 213 (no double benefit).

The IRS provides that group health plans, including health FSAs and HRAs, will need to be amended if the plans prohibit reimbursement of PPE. Group health plans may be amended to provide for such reimbursement of PPE expenses incurred for any period beginning on or after
January 1, 2020. Such an amendment must be adopted no later than the last day of the first calendar year beginning after the end of the plan year in which the amendment is effective. The amendment can have a retroactive effective date (unless it is adopted after December 31, 2022) if the plan is operated consistent with the terms of the amendment beginning on the effective date of the amendment. The IRS provides that the amendment will not cause plans to fail the Section 125 cafeteria plan requirements.

 

Executive Order on Strengthening Medicaid and the Affordable Care Act

3/24/2021 Update: CMS has extended the new special enrollment period for marketplaces using the Heathcare.gov platform until August 15, 2021. See the updated CMS FAQs for more information. On January 28, 2021, President Biden signed an Executive Order on Strengthening Medicaid and the Affordable Care Act. The Executive Order instructs the Department of Health and Human Services (HHS) to consider establishing a special open enrollment period (SEP) for individuals to enroll in or change their current coverage under federally facilitated health insurance marketplaces. The Centers for Medicare and Medicaid Services (CMS) initially established that the special enrollment period would begin on February 15, 2021, and would continue through May 15, 2021. CMS extended the SEP to apply from February 15, 2021, through August 15, 2021. This SEP will be available to individuals in the 36 states with marketplaces using the Healthcare.gov platform. Individuals can check their eligibility for this SEP on Healthcare.gov.

The Executive Order instructs HHS, the Department of Labor (DOL), the Department of the Treasury (Treasury), and all other executive departments and agencies with authorities and responsibilities related to Medicaid and the ACA (Agencies) to review all existing  regulations and other guidelines or policies (agency actions) as soon as possible to examine:

  • policies or practices that may undermine protections for people with pre-existing conditions, including complications related to COVID-19, under the ACA;
  • demonstrations and waivers, as well as demonstration and waiver policies, that may reduce coverage under or otherwise undermine Medicaid or the ACA;
  • policies or practices that may undermine the Health Insurance Marketplace or the individual, small group, or large group markets for health insurance in the United States;
  • policies or practices that may present unnecessary barriers to individuals and families attempting to access Medicaid or ACA coverage, including for mid-year enrollment; and
  • policies or practices that may reduce the affordability of coverage or financial assistance for coverage, including for dependents.

The Executive Order instructs the Agencies to suspend, revise, or revoke, as soon as possible, agency actions that are inconsistent with the policy of the Biden Administration to protect and strengthen Medicaid and the ACA and to make high-quality healthcare accessible and affordable for every American. The Executive Order also instructs the Agencies to consider whether to issue additional agency actions to more fully enforce this policy.

Finally, the Executive Order revokes Executive Order 13765 Minimizing the Economic Burden of the Patient Protection and Affordable Care Act Pending Repeal issued on January 20, 2017, and Executive Order 13813 Promoting Healthcare Choice and Competition Across the United States issued on October 12, 2017. As part of the review of agency actions, the Executive Order instructs the Agencies to consider, as soon as possible, whether to suspend, revise, or rescind agency actions related to these executive orders.

 

American Rescue Plan Act of 2021 – COBRA Premium Assistance

On March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 (Act). The Act is a $1.9 trillion legislative package that includes pandemic relief for individuals and families. The Act contains several provisions including funding to the Centers for Disease Control and Prevention, stimulus checks, unemployment benefits, the child tax credit, tax credits for paid sick leave and family and medical leave, the Paycheck Protection Program, grants to state educational agencies, and low-income family assistance. The Act also contains several provisions affecting group health plans. This series of Advisors will focus on the provisions affecting group health plans. Below is an overview of the Consolidated Omnibus Budget Reconciliation Act (COBRA) coverage premium assistance provisions contained in the Act.

The Act provides COBRA relief for assistance-eligible individuals. An assistance-eligible individual is an individual who is eligible for COBRA due to the COBRA qualifying event of termination of employment or reduction in hours, except for an individual’s voluntary termination of employment, and if he or she elects coverage during the period beginning April 1, 20201, and ending on September 30, 2021.

COBRA Premium Assistance

COBRA premiums for any period of coverage for an assistance-eligible individual covered under COBRA in the period of time beginning April 1, 2021, and ending on September 30, 2021, will be considered paid (that is, assistance-eligible individuals will not be required to pay the COBRA premiums). If an assistance-eligible individual pays any portion of the COBRA premiums, the amount must be reimbursed within 60 days of the date on which the individual made the premium payment.

Permitted Alternative (Different) COBRA Coverage

If an assistance-eligible individual enrolled in a group health plan experiences the COBRA qualifying event of termination of employment or reduction in hours, other than voluntary employment termination, an employer may choose to offer the COBRA-qualified individual different coverage (in addition to the offer of normal COBRA coverage) that is not the same plan as the plan the individual was covered under at the time the COBRA qualifying event. The individual must elect this coverage no later than 90 days after receiving notice of the option. The premium for this different coverage must not exceed the premium for coverage in which the individual was enrolled in at the time the qualifying event occurred. The different coverage in which the individual elects to enroll in must be coverage that is also offered to similarly situated active employees of the employer at the time the individual elects the different coverage. The different coverage cannot be a) coverage that only provides excepted benefits, b) a qualified small employer health reimbursement arrangement (QSEHRA), or c) a flexible spending arrangement (FSA). This coverage will be treated as COBRA coverage.

Extension of COBRA Election Period

An individual who a) does not have a COBRA election in effect on April 1, 2021, but who would otherwise be an assistance-eligible individual if an election were in effect; or b) elected COBRA continuation coverage, but discontinued the coverage before April 1, 2021, may elect COBRA continuation coverage during the period beginning April 1, 2021, and ending 60 days after the date on which the administrator of the applicable group health plan (or other entity) provides the additional notification, described below, to the individual.

Any COBRA continuation coverage elected by a qualified beneficiary during an extended election period noted above must begin on or after April 1, 2021, and will not extend beyond the maximum period of COBRA coverage that would have applied had the coverage had been elected and maintained without the extension.

Limitation of the COBRA Premium Subsidy

This COBRA premium subsidy will expire upon the earlier of:

    • The first date that the individual is eligible for benefits under Medicare or eligible for coverage under any other group health plan (not including coverage that a) only provides excepted benefits, b) is a QSEHRA, or c) is an FSA); or
    • The earlier of:
      • the date following the expiration of the applicable maximum COBRA coverage period due to the qualifying event, or
      • The end of the COBRA period that would have applied had the coverage had been elected and maintained without the extension.

An assistance-eligible individual must notify the group health plan when his or her premium subsidy period has expired as noted above. The Act provides that the Department of Labor (DOL) will determine the way the notice must be provided and the deadline by which the notice must be provided.

Notices to Individuals

The required COBRA election notice provided by the plan administrator to individuals that become eligible to elect COBRA continuation coverage during the period of time beginning April 1, 2021, and ending on September 30, 2021, must include an additional written notification (included in the election notice or by a separate document) to the recipient in clear language of the availability of the premium assistance and the option to enroll in different coverage if the employer permits assistance-eligible individuals to elect enrollment in different coverage as described above. In a situation in which the election notice is not required to be provided by the plan administrator, the DOL and Department of Health and Human Services (HHS) will provide rules requiring the provision of such notice.

The additional notice must include:

    • the forms necessary for establishing eligibility for premium assistance;
    • the name, address, and telephone number necessary to contact the plan administrator and any other person maintaining relevant information in connection with such premium assistance;
    • a description of the extended election period noted above;
    • a description of the obligation of the qualified beneficiary to notify the group health plan when his or her premium subsidy period has expired and the penalty provided under section 6720C of the Internal Revenue Code of 1986 for failure to carry out this obligation;
    • a description, displayed in a prominent manner, of the qualified beneficiary’s right to a subsidized premium and any conditions on entitlement to the subsidized premium; and
    • a description of the option of the qualified beneficiary to enroll in different coverage if the employer permits the beneficiary to elect to enroll in different coverage.

In the case of any assistance-eligible individual (or any individual who qualifies for an extended election period noted above who became eligible to elect COBRA continuation coverage before April 1, 2021) the administrator of the applicable group health plan (or other entity) must provide, within 60 days after April 1, 2021, the additional notification required above. Failure to provide the additional notice will be treated as a failure to meet the election notice requirement under COBRA.

The Act instructs the DOL, HHS, and the Department of the Treasury to issue models for the additional notification described above no later than 30 days after the enactment of this Act.

The administrator of the applicable group health plan (or other entity) also must provide an assistance-eligible individual a written notice in clear language that the premium assistance will expire soon and must prominently identify the date the assistance will expire and that the individual may be eligible for COBRA or coverage under a group health plan without premium assistance. This notice must be provided no earlier than 45 days before the expiration date of the assistance and no later than 15 days before the expiration date. Notice is not required to be provided if an individual’s premium assistance expires due to expiration of the COBRA coverage period or the date that the individual is eligible for benefits under Medicare or eligible for coverage under any other group health plan (not including coverage that a) only provides excepted benefits, b) is a QSEHRA, or c) is an FSA).

The Act instructs the DOL, HHS, and the Treasury to issue models for the premium assistance expiration notification described above no later than 45 days after the enactment of this Act.

Premium Assistance Credit

The employer maintaining the plan that is subject to COBRA (or the plan in the case of a multiple employer plan under Section 3(37) of ERISA; in all other cases, the issuer providing coverage) is entitled to a premium assistance credit against the FICA Medicare tax imposed on it. The amount of the premium assistance credit for each calendar quarter is equal to the amount of premiums not paid by assistance-eligible individuals. The credit allowed for each calendar quarter cannot exceed the tax imposed by Internal Revenue Code (IRC) Section 3111(b), or so much of the taxes imposed under section 3221(a) as are attributable to the rate in effect under Section 3111(b), for such calendar quarter (reduced by any credits allowed against such taxes under Sections 3131, 3132, and 3134) on the wages paid with respect to the employment of all employees of the employer. If the premium assistance credit that an employer is entitled to exceed this limitation, the excess amount must be treated as an overpayment by the employer and refunded to the employer. The premium assistance credit may be advanced according to forms and instructions provided by the IRS. Note that the IRS will waive penalties for failure to pay the FICA Medicare tax up to the premium assistance credit amount if the IRS determines that the failure was due to the anticipation of the credit. If an entity overstates the amount of credit it is entitled to, this will be treated as an underpayment of the FICA Medicare tax.

No premium assistance credit will be allowed for any amount that is taken into account as qualified wages under the employee retention credit or qualified health plan expenses under the federal paid sick leave and paid family and medical leave credit.

The premium assistance credit applies to premiums and wages paid on or after April 1, 2021.

 

American Rescue Plan Act of 2021 – DCAPs and Exchange Health Insurance

On March 11, 2021, President Biden signed the American Rescue Plan Act of 2021. The Act is a $1.9 trillion legislative package, which contains several provisions intended to relieve employers and families from some of the economic burdens associated with COVID-19. The Act contains funding for the Centers for Disease Control and Prevention, stimulus checks, unemployment benefits, a child tax credit, tax credits for paid sick leave and family and medical leave, the paycheck protection program, grants to state educational agencies, and low-income family assistance. The Act also contains several provisions affecting group health plans.

Increase in the Maximum Exclusion Under DCAPs

The Act increases the maximum amount that can be excluded from an employee’s income under a dependent care flexible spending arrangement (DCAP) from $5,000 to $10,500 if the employee is married and filing a joint return or if the employee is a single parent ($2,500 to $5,250 for individuals who are married but filing separately) for any taxable year beginning after December 31, 2020, and before January 1, 2022. An employer may amend a DCAP to apply this increased limit retroactively to January 1, 2021, if the amendment is adopted no later than the last day of the plan year in which the amendment is effective and the plan is operated consistent with the terms of the amendment during the period beginning on the effective date of the amendment and ending on the date the amendment is adopted.

Expanded Premium Tax Credit Eligibility and Lower Required Contribution Percentages on the Health Insurance Marketplace/Exchange

For the taxable years of 2021 and 2022, the Act has expanded eligibility for the premium tax credit for individuals who purchase health insurance on an Exchange. Under the Act, there is no upper-income limit on individuals who are eligible for a premium tax credit for 2021 and 2022 (under the existing Patient Protection and Affordable Care Act (ACA) rules, the premium tax credit is limited to individuals with household income between 100% and 400% of the federal poverty level (FPL)). The Act also lowers the percentage of household income that individuals must contribute for health insurance coverage purchased on an Exchange.

In the case of an individual who has received, or has been approved to receive, unemployment compensation for any week beginning during 2021, for that taxable year an Exchange must not take into account any household income of the individual in excess of 133 percent of the poverty limit for a family of the size involved.

 

Mandatory Coverage of COVID-19 Vaccines Under Group Health Plans

3/5/2021 Update: ACIP recommended the Janssen (Johnson & Johnson) vaccine.

On December 11, 2020, the Food and Drug Administration (FDA) issued an Emergency Use Authorization for the Pfizer-BioNTech COVID-19 vaccine (Pfizer vaccine). The following day, December 12, 2020, the Centers for Disease Control Advisory Committee on Immunization
Practices (ACIP) issued an interim recommendation for use of the Pfizer vaccine in persons aged 16 years or older for the prevention of COVID-19.

On December 18, 2020, the FDA issued an Emergency Use Authorization for the Moderna COVID-19 (mRNA-1273) vaccine (Moderna vaccine). The following day, December 19, 2020, ACIP issued an interim recommendation for use of the Moderna vaccine in persons aged 18 or older for the prevention of COVID-19.

On February 27, 2021, the FDA issued an Emergency Use Authorization for the Johnson & Johnson COVID-19 vaccine. The following day, February 28, 2021, ACIP issued an interim recommendation for use of the Johnson & Johnson vaccine in persons aged 18 or older for the prevention of COVID-19.

Alternative COVID-19 vaccines are likely to be approved by the FDA under emergency authority in the coming weeks. Group health plans are encouraged to prepare to cover the cost of the Pfizer, Moderna, Johnson & Johnson, and other approved COVID-19 vaccines.

Under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), non-grandfathered individual and employer-sponsored group health plans are required to cover the entire cost of preventative services by not imposing cost-sharing in the form of deductibles, copays, coinsurance or other amounts on the following:

  • An item, service, or immunization that is intended to prevent or mitigate the coronavirus disease and is an evidence-based item or service that has a rating of “A” or “B” in the current recommendations of the United States Preventive Services Task Force (USPSTF); and
  • An immunization that is intended to prevent or mitigate the coronavirus disease that has a recommendation from ACIP with respect to the individual involved.

The CARES Act requires that the above services be covered as preventive care 15 business days after the date on which a recommendation is made by the USPSTF or ACIP relating to the service. Accordingly, non-grandfathered individual and group health plans must cover the Pfizer vaccine as preventive care no later than January 5, 2021 (based on the December 12, 2020, recommendation from ACIP), the Moderna vaccine as preventive care no later than January 12, 2021 (based on the December 19, 2020, recommendation from ACIP), and the Johnson & Johnson vaccine as preventive care no later than March 19, 2021 (based on February 28, 2021 recommendation from ACIP).

ACIP has recommended that only health care personnel and residents of long-term care facilities receive the vaccine in the initial phase (Phase 1a) of the COVID-19 vaccination program. ACIP previously recommended that during Phase 1b, the vaccine should be distributed to essential workers such as members of the education sector, food and agriculture, utilities, police, firefighters, corrections officers, and transportation. ACIP has revised this recommendation so that during Phase 1b the vaccine should be offered to persons aged 75 years or older and frontline essential workers (non–health care workers).

ACIP previously recommended that during Phase 1c, the vaccine should be distributed to adults with high-risk medical conditions and adults aged 65 years or older. ACIP has revised this recommendation so that during Phase 1c, the vaccine should be offered to persons aged 65 to 74 years old, persons aged 16 to 64 years old with high-risk medical conditions, and essential workers not recommended for vaccination in Phase 1b.

Phase 2 includes all other persons aged 16 years or older that are not included in Phases 1a, 1b, or 1c.

Employers should ensure that their non-grandfathered group health plans, whether self-insured, or fully insured through carriers, are prepared to cover COVID-19 vaccines as provided under the CARES Act and that the plan documents reflect such coverage. Further, participant communications should be distributed that provide information regarding the availability of COVID-19 vaccinations with no cost-sharing. Grandfathered plans are not required to cover COVID-19 vaccines under the CARES Act. However, employers with such plans should review their plan documents to determine whether COVID-19 vaccines are or should be covered.

 

EBSA Disaster Relief Notice 2021-01

3/2/2021 Update: The DOL issued EBSA Disaster Relief Notice 2021-01 providing that the outbreak period relief noted below ends on the earlier of one year from the date an individual or plan was first eligible for relief (extension period) or the original outbreak period of 60 days after the announced end of the COVID-19 National Emergency. As of the date of this writing, the COVID-19 National Emergency has not ended.

On March 13, 2020, former President Trump issued the Proclamation on Declaring a National Emergency Concerning the Novel Coronavirus Disease (COVID-19) Outbreak and by a separate writing made a determination, under Section 501(b) of the Robert T. Stafford Disaster Relief and Emergency Assistance Act, that a national emergency exists nationwide beginning March 1, 2020, as the result of the COVID-19 outbreak.

The Department of Labor (DOL) recognizes that the COVID-19 outbreak may impede efforts to comply with various requirements and deadlines under the Employee Retirement Income Security Act (ERISA). As a result, the DOL’s Employee Benefits Security Administration (EBSA) issued Disaster Relief Notice 2020-01 (Notice 2020-01) that applies to employee benefit plans, employers, labor organizations, and other plan sponsors, plan fiduciaries, participants, beneficiaries, and covered service providers. Notice 2020-01 supplements the extended timeframes final rule issued by the DOL and the Department of the Treasury.

ERISA Notice and Disclosure Relief

In addition to the final rule, Notice 2020-01 provides an extension on deadlines for furnishing other required notices or disclosures to plan participants, beneficiaries, and other persons to grant plan fiduciaries and plan sponsors additional time to meet their obligations under Title I of ERISA during the COVID-19 outbreak. This extension applies to the furnishing of notices, disclosures, and other documents required by provisions of Title I of ERISA over which the DOL has authority, except for those notices and disclosures addressed in the final rule. See the DOL Reporting and Disclosure Guide for Employee Benefit Plans for an overview of the various notice and disclosure requirements under Title I of ERISA.

Under the EBSA Disaster Relief Notice 2021-01, an employee benefit plan and the responsible plan fiduciary may disregard the period from March 1, 2020, and ending on the earlier of one year from the date the plan was first eligible for relief (extension period) or the original outbreak period of 60 days after the announced end of the COVID-19 National Emergency when determining the date that a notice or disclosure must be provided under Title I of ERISA. This relief will only apply if the plan and responsible fiduciary act in good faith and furnish the notice, disclosure, or document as soon as administratively practicable under the circumstances. Good faith acts include use of electronic alternative means of communicating with plan participants and beneficiaries whom the plan fiduciary reasonably believes have effective access to electronic means of communication, including email, text messages, and continuous access websites.

Plan Loans and Distributions

The DOL has taken a temporary non-enforcement position on retirement plan loan and distribution procedural deficiencies. Under Notice 2020-01, retirement plans that do not follow procedural requirements for plan loans or distributions imposed by the terms of the plan, will not be treated as in violation of Title I of ERISA if: 1) the failure is solely attributable to the COVID19 outbreak; 2) the plan administrator makes a good-faith diligent effort under the circumstances to comply with those requirements; and 3) the plan administrator makes a reasonable attempt to correct any procedural deficiencies, such as assembling any missing documentation, as soon as administratively practicable. The relief is limited to the DOL’s authority under Title I of ERISA and does not extend to Title II of ERISA, which contains provisions analogous to those under the Internal Revenue Code and subject to the jurisdiction of the IRS, such as the spousal consent rules for distributions.

Under Notice 2020-01, the DOL will not consider any person to have violated Title I of ERISA, including the requirement that the loan be adequately secured by the account balance, solely because: 1) the person made a plan loan to a qualified individual during the loan relief period in compliance with the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and the provisions of any related IRS notice or other published guidance; or 2) a qualified individual delayed making a plan loan repayment in compliance with the CARES Act and the provisions of any related IRS notice or other published guidance.

Notice 2020-01 provides that an employee pension benefit plan may be amended to provide the relief for plan loans and distributions described in section 2202 of the CARES Act and the DOL will treat the plan as being operated in accordance with the terms of the amendment prior to its adoption if: 1) the amendment is made on or before the last day of the first plan year beginning on or after January 1, 2022, or such later date prescribed by the Secretary of the Treasury, and 2) the amendment meets the conditions of section 2202(c)(2)(B) of the CARES Act.

Participant Contributions and Loan Repayments

Under Notice 2020-01, as amended by Notice 2021-01, the DOL will not take enforcement action with respect to a temporary delay in forwarding participant payments and withholdings to employee pension benefit plans during the period from March 1, 2020, and ending on the earlier of one year from the date the plan was first eligible for relief (extension period) or the original outbreak period of 60 days after the announced end of the COVID-19 National Emergency if the delay is solely attributable to the COVID-19 outbreak. However,  employers and service providers must act reasonably, prudently, and in the interest of employees to comply as soon as administratively practicable under the circumstances.

Blackout Notices

Notice 2020-01 provides individual account plan administrators with relief from the requirement that 30 days’ advance written notice be provided to participants before implementing a blackout period that restricts participants’ ability to direct investments and to obtain loans and other distributions from the plan. The relief is available when a plan administrator is unable to comply with the advance notice requirement due to events beyond the reasonable control of the plan administrator. The DOL will not require plan administrators to make a written determination when seeking relief from the 30 days’ advance notice requirement due to a pandemic, such as COVID-19.

General ERISA Fiduciary Compliance

Notice 2020-01 provides that plan fiduciaries should make reasonable accommodations to prevent the loss of benefits or undue delay in benefits payments and should attempt to minimize the possibility of individuals losing benefits because of a failure to comply with pre-established timeframes. The DOL recognizes that there may be instances when plans and service providers may be unable to achieve full and timely compliance with claims processing and other ERISA requirements. The DOL notes that it will implement grace periods and other relief where appropriate, including when physical disruption to a plan or service provider’s principal place of business makes compliance with pre-established timeframes for certain claims’ decisions or disclosures impossible.

The DOL will continue to monitor the effects of the COVID-19 outbreak and may provide additional relief when necessary.

 

Final Rule on the Extension of Certain Timeframes for Employee Benefit Plans, Participants, and Beneficiaries Due to COVID-19

3/2/2021 Update: The DOL issued EBSA Disaster Relief Notice 2021-01 providing that the outbreak period relief noted below ends on the earlier of one year from the date an individual or plan was first eligible for relief (extension period) or the original outbreak period of 60 days after the announced end of the COVID-19 National Emergency. As of the date of this writing, the COVID-19 National Emergency has not ended. If a deadline noted below fell on March 1, 2020, it would be extended until February 28, 2021 (one year from March 1, 2020). However, if a deadline fell after March 1, 2020, the deadline would be extended to a date after February 28, 2021 because the extension is up to one year following the deadline or 60 days after the announced end of the COVID-19 National Emergency, if earlier.

On March 13, 2020, former President Trump issued the Proclamation on Declaring a National Emergency Concerning the Novel Coronavirus Disease (COVID-19) Outbreak and by separate letter made a determination, under Section 501(b) of the Robert T. Stafford Disaster Relief and Emergency Assistance Act, that a national emergency exists nationwide beginning March 1, 2020, as the result of the COVID-19 outbreak.

The Department of Labor (DOL) and the Department of the Treasury (Treasury) issued a final rule that extends certain timeframes under the Employee Retirement Income Security Act (ERISA) and Internal Revenue Code (IRC) for group health plans, disability, and other welfare plans, pension plans, and participants and beneficiaries of these plans during the COVID-19 national emergency. The timing extensions are issued to help alleviate problems faced by health plans to comply with strict ERISA and IRC timeframes and problems faced by participants and beneficiaries in exercising their rights under health plans during the COVID-19 national emergency. The final rule provides the timeframe extensions based on the end date of the “national emergency” (as of the date of this publication, the national emergency end date has not been announced) and the end date of the “outbreak period” which is the 60th day after the end of the national emergency. Under EBSA Disaster Relief Notice 2021-01, the end of the outbreak period relief is the earlier of one year from the date they were first eligible for relief (extension period), or the original outbreak period of 60 days after the announced end of the national emergency. Under the final rule the outbreak period will be disregarded, meaning the timeframes for the group health plan requirements noted below will be paused until after the outbreak period has ended.

HIPAA Special Enrollment Periods

Under HIPAA, group health plans must provide special enrollment periods in certain circumstances, including when an employee or dependent loses eligibility for any group health plan or other health insurance coverage in which the employee or the employee’s dependents were previously enrolled (including coverage under Medicaid and the Children’s Health Insurance Program), and when a person becomes a dependent of an eligible employee by birth, marriage, adoption, or placement for adoption. Generally, group health plans must allow such individuals to enroll in the group health plan if they are otherwise eligible and if enrollment is requested within 30 days of the occurrence of the event (or within 60 days, in the case of loss of Medicaid or state Children’s Health Insurance Program (CHIP) coverage or eligibility for state premium assistance subsidy from Medicaid or CHIP).

Under the final rule and EBSA Disaster Relief Notice 2021-01, the one-year extension period or original outbreak period, if earlier, must be disregarded when determining if a participant timely requested HIPAA special enrollment (i.e., the 30-day or 60-day period will begin to run the day after the outbreak period). See the Appendix for examples.

COBRA

The COBRA continuation coverage provisions generally provide a qualified beneficiary a period of at least 60 days to elect COBRA continuation coverage under a group health plan. Plans are required to allow payment of premiums in monthly installments, and plans cannot require payment of premiums before 45 days after the day of the initial COBRA election. COBRA continuation coverage may be terminated for failure to pay premiums on time. Under the COBRA rules, a premium is considered paid on time if it is made no later than 30 days after the first day of the period for which payment is being made. Notice requirements prescribe time periods for employers to notify the plan of certain qualifying events and for individuals to notify the plan of certain qualifying events or a determination of disability. Notice requirements also prescribe a time period for plans to notify qualified beneficiaries of their rights to elect COBRA continuation coverage.

Under the final rule and EBSA Disaster Relief Notice 2021-01, the one-year extension period or original outbreak period, if earlier, must be disregarded when determining the 60-day COBRA election period, the date for making COBRA premium payments, and the date for qualified beneficiaries to notify the plan of a qualifying event or determination of disability. The outbreak period must also be disregarded when determining the date by which a COBRA election notice must be provided to a qualified beneficiary. See the Appendix for examples.

Claims Procedure

ERISA-covered employee benefit plans and non-grandfathered group health plans and health insurance issuers offering non-grandfathered group or individual health insurance coverage are required to establish and maintain a procedure governing the filing and initial disposition of benefit claims, and to provide participants with a reasonable opportunity to appeal an adverse benefit determination to an appropriate named fiduciary. Plans may not have provisions that unduly inhibit or hamper the initiation or processing of claims for benefits. Further, group health plans and disability plans must provide participants at least 180 days following receipt of an adverse benefit determination to appeal (60 days in the case of pension plans and other welfare benefit plans).

Under the final rule and EBSA Disaster Relief Notice 2021-01, the one-year extension period or original outbreak period, if earlier, must be disregarded when determining the date for participants to file a benefit claim under the plan’s claims procedures and the date by which a participant may file an appeal of an adverse benefit determination under the plan’s claims procedure.

External Review Process

ERISA sets forth standards for external review that apply to non-grandfathered group health plans and health insurance issuers offering non-grandfathered group or individual health insurance coverage and provides for either a state external review process or a federal external review process. Standards for external review processes and timeframes for submitting claims to the independent reviewer for group health plans or health insurance issuers may vary depending on whether a plan uses a state or federal external review process. For plans or issuers that use the federal external review process, the process must allow at least four months after the receipt of a notice of an adverse benefit determination or final internal adverse benefit determination for a request for an external review to be filed. The federal external review process also provides for a preliminary review of a request for external review. The regulation provides that if such request is not complete, the federal external review process must provide for a notification that describes the information or materials needed to make the request complete, and the plan or issuer must allow a claimant to perfect the request for external review within the four-month filing period or within the 48-hour period following the receipt of the notification, whichever is later.

Under the final rule and EBSA Disaster Relief Notice 2021-01, the one-year extension period or original outbreak period, if earlier, must be disregarded when determining the date by which a participant may file a request for an external review after receiving an adverse benefit determination or final internal adverse benefit determination and the date by which a participant must file a corrected request for external review upon a finding that the request was not complete.

Plan Administrator/Fiduciary Obligations Regarding the End of the Outbreak Period

The DOL instructs that if the plan administrator or other responsible plan fiduciary knows, or should reasonably know, that the end of the outbreak period for an individual action is exposing a participant or beneficiary to a risk of losing protections, benefits, or rights under the plan, the administrator or other fiduciary should consider sending a notice regarding the end of the outbreak period. The DOL also notes that plan disclosures issued prior to or during the pandemic may need to be reissued or amended if such disclosures failed to provide accurate information regarding the time in which participants and beneficiaries were required to take action (e.g., COBRA election notices and claims procedure notices). The DOL provides that group health plans should consider ways to ensure that participants and beneficiaries who are losing coverage are made aware of other coverage options that may be available to them, including the opportunity to obtain coverage through the Health Insurance Marketplace in their state.

The DOL acknowledges that there may be instances when full and timely compliance with ERISA’s disclosure and claims processing requirements by plans and service providers may not be possible, such as when pandemic or natural disaster-related disruption to a plan or service provider’s principal place of business makes compliance with pre-established time frames for certain claims’ decisions or disclosures impossible. The DOL will take into account fiduciaries that have acted in good faith and with reasonable diligence under the circumstances when enforcing ERISA requirements.


ARPA: What Employers Need to Know

On March 10, 2021 Congress passed the American Rescue Plan Act (ARPA) of 2021, which was signedImage inspiring hope for 2021 and the coronavirus relief offered with American Rescue Plan Act ARPA into law on March 11th. The ARPA attempts to address and help mitigate some of the far-reaching financial impacts of the COVID-19 pandemic. In addition to those provisions, the ARPA contains provisions that are of special interest to employers and employees

 

The ARPA Nitty Gritty

  • COBRA Subsidy - A 100% premium subsidy is provided, funded through employer tax credits. 
  • FFCRA Leave - Employer tax credits have been extended through September 30, 2021.
  • FFCRA Leave - Inclusion of testing and immunization as qualifying reasons for FFCRA leave.
  • FFCRA Tax Credits - Definition of employee earnings eligible have been expanded.
  • Unemployment - The $300 weekly increase has been extended and expanded.
  • ACA - Exchange insurance subsidies are increased. 
  • DCAP - Contribution limits have been increased.
  • Employee Retention Tax Credit - Extended and expanded eligibility for some businesses. 

 

Let's Break It Down

 

COBRA Subsidy

What is it?

COBRA (Consolidated Omnibus Budget Reconciliation Act of 1986) allows employees who would lose employer-sponsored health insurance because of job loss (or reduction in working hours) to continue that insurance for 18 months. However, the employer can require the employee that elects COBRA coverage to pay the entire cost of the premium oftentimes creating a necessary, but an unexpected financial burden for the employee. 

 

ARPA Provisions

  • 100% subsidy of COBRA premiums from April 1, 2021, through September 30, 2021, for employees and their family members who lost health insurance due to involuntary termination or reduction in hours of their employment
  • Allows employees who declined COBRA coverage, or elected it and dropped it, to elect subsidized COBRA
  • Does not apply to employees who voluntarily terminated their employment or who qualify for another group health plan

 

Who Pays For It?

The subsidy is funded through the federal government through a refundable payroll tax credit. 

 

Action Steps

  • New employee notice requirements for plan administrators will be issued by the US Department of Labor
  • Employees may elect subsidized COBRA starting April 1, 2021, through 60 days after receiving notice of the benefit

 

FFCRA Leave

What is it?

FFCRA (Families First Coronavirus Response Act) was passed in March 2020 and provided a tax credit for employers to fund two types of paid employee leave required by the law. These leave requirements expired in December 2020, but for employers that chose to continue providing FFCRA leave voluntarily, the tax credit was extended through March 2021.

 

ARPA Provisions

  • Extends tax credit through September 30, 2021
  • Adds a provision to include employee time off related to COVID-19 testing and immunization
  • Increases the amount of wages eligible for the family leave credit from $10,000 to $12,000 per employee
  • Provides an additional 10 days of voluntary emergency paid sick leave for employees beginning April 1, 2021

 

Unemployment

What is it?

Due to the COVID-19 pandemic, unemployment provisions were expanded under the previous administration to include three new federal unemployment programs. These programs were scheduled to end no later than April 2021. 

  • Pandemic Unemployment Assistance (PUA): Provided weekly benefits to independent contractors, self-employed individuals, and other workers that typically would not be eligible for unemployment benefits
  • Pandemic Emergency Unemployment Compensation (PEUC): Provides weekly benefits to individuals who have exhausted their eligibility for all other unemployment benefits
  • Federal Pandemic Unemployment Compensation: Provides an additional $300 weekly payment to individuals already receiving PUA, PEUC, or regular unemployment benefits

 

ARPA Provisions

  • Previously established provisions that were set to expire have been extended through September 6, 2021
  • Changes how unemployment benefits are taxed, exempting the first $10,200 from federal income tax for each spouse in households with under $150,000 in adjusted gross income.

 

ACA

What is it?

The ACA (Affordable Care Act) established health insurance exchanges for the purchase of individual health insurance coverage, as well as premium tax credits. These tax credits are not available to individuals with income at or above 400% of the federal poverty level. 

 

ARPA Provisions

  • Temporarily eliminates the income cap on subsidies for a period of two years
  • Limits the total amount a household is required to pay for health coverage through the Exchanges to 8.5% of household income
  • Increases federal subsidy amounts available for lower-income individuals, in some cases eliminating premium costs entirely
  • Increases federal funding intended to encourage states to expand Medicaid programs (if they previously had not done so)
  • All provisions are temporary and will expire in two years

 

DCAP

What is it?

A DCAP (Dependent Care Assistance Plan), also sometimes referred to as a dependent care flexible spending account (FSA), is an employee benefit plan that helps employees pay for the care of a qualifying dependent, such as a child or elder, as defined by Internal Revenue Service (IRS) regulations.

 

ARPA Provisions

  • Increases annual contribution limit from $5,000 to $10,500 ($2,500 to $5,250 for married filing separately) for tax years beginning after December 31, 2020 and before January 1, 2022
  • Employers meeting requirements can retroactively amend plans to incorporate the increase

 

Action Steps

  • Employers with DCAPs can retroactively amend plans, if
    • The amendment is adopted by the last day of the plan year in which it is effective; and
    • The plan operates consistently with the terms of the amendment until it is adopted.
  • It is recommended that you speak with your benefits advisor to ensure plans meet the requirements and stay in compliance

 

Employee Retention Tax Credit

What is it?

The Employee Retention Tax Credit was originally enacted with the CARES (Coronavirus Aid, Relief and Economic Security) Act. The credit was tended to encourage employers to retain employees on their payroll who were unable to work due to COVID-19 related reasons. This credit was set to expire in June of 2021.

 

ARPA Provisions

  • Extends the credit through the end of 2021
  • Expands eligibility to some small startups that began operating after February 15, 2020. Qualifying businesses will be eligible for a maximum credit of up to $50,000 per quarter even if they do not experience an eligible decline in gross receipts or a full or partial suspension
  • Creates a new provision for 'severely financially distressed' employers which beginning in the third quarter of 2021 allows employers of any size to count all wages toward the $10,000 cap.

What to Do When Scared Workers Don’t Report to Work Due to COVID-19

Throughout the globe, many are terrified of contracting the communicable disease, the coronavirus. With this being said, many essential workers are refusing to go to work with that fear in their minds. Read this blog post from SHRM to learn more.


Some essential workers are refusing to come to work out of fear of contracting the coronavirus. Their employers must weigh the employees' legal rights and understandable health concerns with the organizations' business needs. It can be a tough balancing act.

"A good first step for an employer to respond to an essential worker who's expressing fears of returning to work is to actively listen to the employee and have a conversation," said Brian McGinnis, an attorney with Fox Rothschild in Philadelphia. "What are their specific concerns? Are they reasonable?"

McGinnis said that employers should consider whether it already has addressed those concerns or if additional steps are needed. Often, having a conversation with the employee "will avoid an unneeded escalation," he said.

Employees' Legal Rights

What if that doesn't work? Tread cautiously, as employees have many legal protections.

An employer usually can discipline workers for violating its attendance policy. But there are exceptions to that rule, noted Robin Samuel, an attorney with Baker McKenzie in Los Angeles. Putting hesitant employees on leave may be a better choice than firing them.

Christine Snyder, an attorney with Tucker Ellis in Cleveland, cautioned, "If an employer permits employees to use vacation or PTO [paid time off] for leave, it may soon find itself without a workforce sufficient to maintain operations. Therefore, an employer may want to rely upon the terms of its existing time-off policy, which typically requires approval to use vacation or PTO, to require that leave for this reason be unpaid."

OSH Act

Employees can refuse to work if they reasonably believe they are in imminent danger, according to the Occupational Safety and Health (OSH) Act. They must have a reasonable belief that there is a threat of death or serious physical harm likely to occur immediately or within a short period for this protection to apply.

Samuel explained that an employee can refuse to come to work if:

  • The employee has a specific fear of infection that is based on fact—not just a generalized fear of contracting COVID-19 infection in the workplace.
  • The employer cannot address the employee's specific fear in a manner designed to ensure a safe working environment.

NLRA

The National Labor Relations Act (NLRA) grants employees at unionized and nonunionized employers the right to join together to engage in protected concerted activity. Employees who assert such rights, including by joining together to refuse to work in unsafe conditions, are generally protected from discipline, Samuel noted.

"That said, the refusal must be reasonable and based on a good-faith belief that working conditions are unsafe," said Bret Cohen, an attorney with Nelson Mullins in Boston.

ADA

Employers should accommodate employees who request altered worksite arrangements, remote work or time off from work due to underlying medical conditions that may put them at greater risk from COVID-19, Samuel said.

The EEOC's guidance on COVID-19 and the Americans with Disabilities Act (ADA) notes that accommodations may include changes to the work environment to reduce contact with others, such as using Plexiglas separators or other barriers between workstations.

The Age Discrimination in Employment Act, unlike the ADA, does not have a reasonable-accommodation requirement, pointed out Isaac Mamaysky, an attorney with Potomac Law Group in New York City. Nonetheless, he "would encourage employers to be flexible in response to leave requests from vulnerable employees," such as older essential workers, as the right thing to do and to bolster employee relations.

FFCRA

If a health care provider advises an employee to self-quarantine because the employee is particularly vulnerable to COVID-19, the employee may be eligible for paid sick leave under the Families First Coronavirus Response Act (FFCRA), Cohen noted. The FFCRA applies to employers with fewer than 500 employees, and the quarantine must prevent the employee from working or teleworking.

FFCRA regulations permit employers to require documentation for paid sick leave, noted John Hargrove, an attorney with Bradley in Birmingham, Ala.

Employers may relax documentation requirements due to the difficulty some employees could have obtaining access to medical providers during the pandemic and to encourage ill employees to stay away from work, said Pankit Doshi, an attorney with McDermott Will & Emery in San Francisco.

Hazard Pay

Although not currently mandated by federal law, hazard pay—extra pay for doing dangerous work—might be appropriate for an employer to offer to essential workers, McGinnis said.

If hazard pay is offered, similarly situated employees should be treated the same, he said. Otherwise, the employer risks facing a discrimination claim.

Andrew Turnbull, an attorney with Morrison & Foerster in McLean, Va., noted that companies with multistate operations may have legitimate reasons for offering hazard pay to employees working at locations with a high risk of exposure and not where the risk is minimal.

Hazard pay might be a good choice for public-facing jobs, where employees may not be able to observe social distancing, said Román Hernández, an attorney with Troutman Sanders in Portland, Ore.

Some localities require hazard pay in some circumstances, Doshi noted. These localities include Augusta, Ga., Birmingham, Ala., and Kanawha County, W.Va.

Inform and Protect Workers

Lindsay Ryan, an attorney with Polsinelli in Los Angeles, said that employers should keep employees apprised of all measures the employer is taking to maintain a safe workplace, consistent with guidance from the U.S. Centers for Disease Control and Prevention (CDC), the Occupational Safety and Health Administration, and local health authorities.

If employers have the means to do so, they should screen employees each day by taking their temperatures and send workers who have fevers home, Snyder said. Alternatively, employers can require employees to take their own temperatures before reporting to work, she added.

"Finally, in light of recent CDC guidance regarding the use of cloth masks to prevent infection, employers should allow employees to wear masks in the workplace and consider providing employees with cloth masks if they are able to acquire them," she said.

SOURCE: Smith, A. (20 April 2020) "What to Do When Scared Workers Don’t Report to Work Due to COVID-19" (Web Blog Post). Retrieved from https://www.shrm.org/ResourcesAndTools/legal-and-compliance/employment-law/Pages/coronavirus-when-scared-workers-do-not-report-to-work.aspx

Virtual walks and free chocolate? What workplace pros say the new office will look like

Working remotely has become a new workplace normal and may continue to be so. Although it may be difficult for younger generations to acclimate to this working situation, there may be some benefits to it as well. Read this blog post to learn more.


The traditional office’s days are numbered; the office of the future will be a “collaboration center” with a mix of skeleton staff and remote workers meeting through virtual team walks and group meals via home-delivered Zoom lunches.

Millennials and Generation Z will have problems networking in the new remote work world with fewer face-to-face meetings; and mental health and well-being benefits will become more important than ever before.

Those were some of the predictions of compensation and benefits professionals at the first virtual gathering of the WorldatWork 2020 Total Resilience conference — a digital substitute for an annual conference that was supposed to be held in Minneapolis this year, but was postponed in response to the global coronavirus crisis.

"The office environment will change,” said panelist Steve Pennacchio, senior vice president of total rewards at Pfizer, during an online session on resilience on Wednesday. “Remote work is here to stay.”

Pennacchio said a number of companies will shut down their office space, which will have serious ramifications for commercial real estate and new entrants into the workforce, who will be at a particular disadvantage because of the limits of networking and source building through remote technology.

He suggested more virtual engagement tactics, including virtual walks or group activities, including having teams eat together with coordinated deliveries of lunches or chocolate. “Nothing hurts with chocolate,” he said. During the conference, which will continue with weekly panels through Sept. 2, organizers also hosted social events, including virtual trivia games and online networking.

Pfizer is investing $1 billion on development of vaccines and treatments for coronavirus, he noted. “Hopefully ours and others will work. The world needs more than one,” he said.

Likewise, Susan Brown, senior director of compensation at Siemens, said her company has focused on four key areas of building a team, culture, management team and employees who can adjust to the new environment through virtual meet-and-greet sessions and lunches where all team members must be present visually.

“The relationship builds with seeing each other,” she said. “The camera on changes the dynamic more than a phone call.”

Brown also noted tremendous innovation around talent management happening during the coronavirus crisis. She said that progressive companies have made a quick shift to focus first on the mental health and well-being of staff as a priority, rather than having an emphasis on business metrics.

“The whole conversation changed to focus on people’s health and safely, how they were feeling and empathetic messaging rather than a focus on business results,” she said.

WorldatWork CEO Scott Cawood, who served as moderator, noted that employers’ responses are being closely watched by staff, and other companies.

“COVID-19 doesn’t define who you are; it actually reveals who you are,” said Cawood, sitting alone on a stage with a white chair and house plant, as panelists called in from around the country.

Kumar Kymal, global head of compensation and benefits at BNY Mellon, said the global financial services firm has 95 percent of staff working remotely.

"Times of crisis and change give us permission to rethink the way we do things, and it's an opportunity to decide what really matters to your organization," Kymal said, noting that the company announced that there will be no layoffs in 2020 to put staff at ease.

Management response should focus on “speed, speed, speed,” he said about responding to challenges under the coronavirus crisis, with special attention to empathetic corporate messaging.

Kymal said at his company, management focused on a new framework to address healthcare concerns globally, with a broad overview of their healthcare plans. Second, management focused on addressing stress and anxiety, particularly with attention to messaging and staff feedback. They also put an increased focus on well-being and resilience strategies, and accelerated a mental health program to allow employees to assess their ability to deal with stress. Finally, BNY Mellon improved social connections for managers to lead better on connecting with various teams.

Looking ahead to the return-to-work phase of the crisis, Kymal said the stakes are high. Challenges include dealing with temperature scans, wearing masks, closed cafeterias and social distancing.

“As we're starting to plan what the return to office looks like, it's clear to us it has the potential to become an awful, awful employee experience,” he said. “We really need to rethink and redesign. What does an office experience look like? That's front and center in my mind.”

SOURCE: Siew, W. (08 July 2020) "Virtual walks and free chocolate? What workplace pros say the new office will look like" (Web Blog Post). Retrieved from https://www.employeebenefitadviser.com/news/what-workplace-pros-say-the-new-office-will-look-like


Facial Analysis Technology in the Workplace Brings Risks

Technology is a forever-changing topic and a forever-advancing field. Most recently, facial recognition technology has been a topic of discussion when talking about technology. Read this blog post to learn more.


Facial recognition technology has been under the microscope as organizations and lawmakers re-evaluate its use in the wake of global protests about racial injustice. Technology giants Amazon, IBM and Microsoft all recently announced that they would stop selling facial recognition technology to police departments in the United States, citing the technology's potential for violating human rights and concerns about racial profiling.

Recent research has shined a light on some inherent dangers of using the technology. One study by MIT and Stanford University found that three commercially released facial analysis technologies showed skin-type and gender biases. The study found that the technology performed better for men and lighter-skinned people and worse for darker-skinned women.

The American Civil Liberties Union (ACLU) as well as other human rights groups and privacy advocates also have raised concerns about privacy and surveillance issues tied to use of the technology.

Evaluating Job Candidates

Some vendors in the human resources industry have long used facial analysis technology to help evaluate video interviews with job candidates. These artificial intelligence (AI) tools scan facial expressions and movements, word choice, and vocal tone to generate data that help recruiters make hiring decisions. Vendors say the tools can help reduce hiring costs and improve efficiencies by speeding the screening and recruiting of new hires.

But experts say that if these facial analysis algorithms aren't trained on large or diverse-enough datasets, they're prone to consistently identify some applicants—such as white men—as more employable than others. For example, the MIT and Stanford study found that one major U.S. technology company claimed an accuracy rate of more than 97 percent for a facial recognition algorithm it designed. Yet the dataset it was trained on was more than 77 percent male and more than 83 percent white.

Josh Bersin, a global HR industry analyst and dean of the Josh Bersin Academy in Oakland, Calif., said some HR vendors have embedded facial analysis technology into their video-interviewing tools with the goal of identifying job candidates' demonstrated stress, misrepresentations and even mood.

"These vendors have tried very hard to validate unbiased analysis, but they are taking risks by doing so," Bersin said. "The best solution is to use these tools very carefully and make sure you perform tests across very large samples before you trust these systems."

The use of facial analysis technology to evaluate job candidates is "very problematic," said Frida Polli, founder and CEO of the New York-based assessment company Pymetrics. "The science of the technology in terms of what it really says about someone is extremely new and not well-validated, and certainly not well-validated for HR uses," she said.

Results should be viewed with a skeptical eye if the technology is used for any assessment of job candidates' character or behavior, said Elaine Orler, CEO of the Talent Function, a talent acquisition consulting firm in San Diego. "The technology solutions aren't accurate in this area, and they leave too much to chance in terms of creating false positives or negatives," she explained. "To understand micro-expressions, for example, would require a deeper understanding of that one person's behaviors and not just a crowdsourced base line of everyone's expected expressions."

Some experts say facial recognition technology isn't without value in the workplace, especially in the age of COVID-19. Orler said using the technology as a biometric tool to grant access to parts of a building or as a touchless replacement for time clocks can be a good solution to reduce the spread of the coronavirus.

"Badges and other products that hold credentials often need to touch products that have been touched by others, and fingerprint scanners also have such dangers," she said.

Legal and Privacy Concerns

The use of facial recognition technology is now governed by laws in a growing number of states. Kwabena Appenteng, an attorney specializing in workplace privacy and information security with Littler in Chicago, said most employers are now aware of the landmark Illinois Biometric Information Privacy Act (BIPA) that requires companies implementing facial recognition technology in that state to obtain consent from subjects and to provide a written policy about how collected data will be stored, protected and used. Appenteng said more states—including California and Texas—also now require employers using the technology to satisfy certain compliance obligations.

Illinois and Maryland also have placed restrictions on facial analysis technology specifically for use in evaluating job candidates. California and New York have proposed similar legislation to regulate the use of artificial intelligence in assessing job applicants, said Monica Snyder, an attorney with Fisher Phillips in Boston and New York City and a member of the firm's data security and workplace privacy practice.

Illinois enacted its Artificial Intelligence Video Interview Act earlier this year, a law that requires companies using the technology to notify applicants in advance that the technology will be used to analyze their facial expressions, to obtain consent for its use, to explain to applicants how AI works and to destroy video interviews within 30 days if a candidate makes such a request, Snyder said.

"Employers need to tread carefully on how they use this technology," she said.

Appenteng said there's also the issue of getting employee buy-in for using facial recognition technology since many may consider it a risk to their privacy. "Employers may therefore want to consider providing their employees with a notice that explains facial recognition technology in easy-to-understand terms to placate any of those employee concerns," he said.

SOURCE: Zielinski, D. (09 June 2020) "Facial Analysis Technology in the Workplace Brings Risks" (Web Blog Post). Retrieved from https://www.shrm.org/resourcesandtools/hr-topics/technology/pages/facial-analysis-technology-workplace-brings-risks.aspx


doctor and patient

How Hospitals Can Meet the Needs of Non-Covid Patients During the Pandemic

As there has been many waves of coronavirus cases for many months, health care has seemed to only point to helping those who have been impacted by the virus. Although there are still many cases that test positive for the virus, there has been a dramatic decline in other non-COVID related health issues. Read this blog post to learn more.


During the initial wave of the Covid-19 pandemic, hospitals worldwide diverted resources from routine inpatient critical care and outpatient clinics to meet the surge in demand. Because of the resulting resource constraints and fear of infection, clinicians and non-Covid patients deferred “non-urgent” visits, evaluations, diagnostics, surgeries and therapeutics. Indeed, early in the pandemic physicians and leading public health officials noted a dramatic decline in non-Covid-related health emergencies, including upwards of a 60% decrease in patients with acute myocardial infarctions and strokes.

While these postponements may have reduced the amount of unnecessary services used, they likely also caused a perilous deferral of needed services, which many believe will lead to later hospitalizations requiring higher levels of care, longer lengths of stay, and increased hospital readmissions, thereby further straining hospitals’ inpatient capacity. It is critical that we not only focus on the acute care of Covid-19 patients, but that we also proactively manage patients without Covid-19, particularly those with time-sensitive and medically complex conditions who are postponing their care. This is important not only to sustain health and life, but to preserve future hospital capacity.

Drawing on key principles from operations management and applying a health-systems perspective, we propose four strategies to facilitate care of non-Covid patients even as hospitals are stretched to absorb waves of patients with Covid-19.

1. Innovate outpatient management to reduce demand at downstream bottlenecks. 

To reduce future bottlenecks in emergency departments (EDs) and hospitals, outpatient clinicians should expand their proactive management of patients at high risk of needing acute or inpatient services, such as those with poorly managed hypertension or diabetes, and triage patients with acute needs to EDs now in order to reduce more serious complications later. This will help reduce potential future spikes in demand on EDs and inpatient beds from non-Covid patients.

While most clinicians have rapidly adopted some form of telemedicine, they will need to increase their digital engagement with high-risk patients in a more targeted fashion. Clinicians should evaluate their patient panels to identify high-risk individuals and initiate telemedicine visits, rather than relying on patients to initiate contact, similar to the process for proactive disease management used by several community health care organizations.

Although high-risk patients will vary by specialty, targeted populations may include patients recently discharged from the hospital and those at high risk for hospitalization, including those with uncontrolled heart failure or active malignancy. To facilitate remote patient monitoring of high-risk patients, clinicians may opt to send telehealth kits tailored to patients’ medical and technological needs. These kits may include connected health devices such as blood pressure monitors, pulse oximeters, and heart rate monitors, and even mobile technology devices such as tablets or smart phones. To most effectively leverage telemedicine during the pandemic, clinicians must also promote multidisciplinary virtual collaboration across primary care clinicians, specialists, social workers, home health clinicians, administrative support, and patients and their caregivers.

2.  Combine essential non-Covid inpatient services across hospitals.

To balance demand across hospitals, public health officials should apply a version of the logistics strategy known as “location pooling,” combining demands from multiple locations. Rather than each hospital in a region redundantly providing the full suite of essential inpatient non-Covid clinical services, each of these services should be concentrated at one location. For example, each region should have a single designated cancer center, transplant center, stroke center, and trauma center. Implementing this strategy is fraught with challenges as hospitals are currently organized independently and compete with one another for patients and revenue. Nevertheless, during the initial Covid-19 wave, several hospitals in Boston collaborated to share data on the availability of hospital beds to efficiently route patients based on their clinical need and the available capacity. And centralization of acute stroke care, in which patients are taken to central specialty hospitals rather than the nearest hospital, demonstrates both the feasibility and potential improved outcomes of utilizing this approach in several countries including the United States, Canada, the Netherlands, Denmark, and Australia.

Crises require all possible realizations of economies of scale. Location pooling mitigates variability in service-specific demand faced by each hospital. As demand falls for specific non-Covid services at an individual hospital (e.g., for acute stroke care), hospital administrators can close those services and repurpose the specialty capacity to care of Covid-19 patients with underlying conditions, as discussed below.  If all hospitals implement this strategy, not all non-Covid services will be available at every hospital. However, location pooling draws demand from across hospitals, ensuring that as a given hospital loses some patients it gains others, allowing it to maintain sufficient census to remain fiscally viable.

Centrally coordinated regional organization, similar to mass casualty planning, is critical to ensure that each essential service remains fully operational for routine emergencies, while adapting to dynamic changes in the region’s hospital capacity. The number of hospitals to include in location pooling should be determined by weighing the tradeoff of efficiency gains from pooling across more locations versus inefficiencies from increased travel time incurred by patients and emergency medical services.

3.  Group hospitalized Covid-19 patients by their underlying clinical conditions.

At the same time that hospitals should be location-pooling specialty services for non-Covid patients, to the extent possible they should place their Covid-19 patients who have serious underlying health issues (e.g., cardiac conditions) with other Covid-19 patients with the same condition. In each of these “cohorted wards,” redeployed clinical staff from the relevant specialty service, such as cardiology, can provide essential specialty care alongside clinicians addressing patients’ Covid-specific care needs.

While such cohorting limits efficiency gains from pooling all Covid-19 patients in one ward, it maintains specialty care for patients who still need it while reducing the additional inpatient capacity strain resulting from patients being dispersed across the hospital. Indeed, prior research demonstrates that displacing patients from cohorted specialty units is associated with prolonged hospital length of stay and more frequent readmissions.

4. Discharge patients into post-acute care based on Covid-19 status.

Nursing home, rehabilitation hospital, and long-term acute care facility leadership should collaborate to establish separate regional, specialized, post-acute care facilities for Covid-19 and non-Covid patients. Sending patients to specialized post-acute care facilities based on their Covid-19 status will facilitate discharge planning, improving patient flow out of the hospital for Covid-19 and non-Covid patients alike. This will relieve strain at ED and hospital bottlenecks while maintaining care quality. Furthermore, having dedicated post-acute care facilities for Covid-19 patients will preserve post-acute care capacity for those recovering from non-Covid illnesses, while lowering their risk of becoming infected.

Challenges to this model include ensuring timely access to Covid-19 testing and rapid test results to guide appropriate patient routing. To prevent discharge delays due to testing constraints, hospitals need to implement rapid tests more widely, and post-acute care facilities should designate quarantine areas for patients to receive care while awaiting results.

*  *  *

These strategies will undoubtedly be challenging to implement. But now is the time to rethink health care delivery and adopt operations management strategies with demonstrated success that are most promising. This will allow us to be better prepared for future waves of the Covid-19 pandemic.

SOURCE; Song, H.; Ezaz, G.; Greysen, S. Ryan.; Halpern, S.; Kohn, R. (14 July 2020) "How Hospitals Can Meet the Needs of Non-Covid Patients During the Pandemic" (Web Blog Post). Retrieved from https://hbr.org/2020/07/how-hospitals-can-meet-the-needs-of-non-covid-patients-during-the-pandemic


As Jobs Disappear, Employees Hang On to What They Have

As the coronavirus pandemic has caused many to lose their jobs, some still have been able to hold onto their job that they had prior to the pandemic. Those who have been fortunate enough to keep that job, are now holding onto it. Read this blog post to learn more.


Employees spooked by continuing high unemployment are holding on to the jobs they have at rates not seen in nearly a decade.

While typically a sign of employee loyalty, low turnover these days can also signal fear, hopelessness and stagnation. Employers can head off those negative feelings and maintain morale and energy in the workplace by communicating with empathy and giving employees more control over decisions, experts say.

"Feeling trapped in a job can create a lot of challenges, leading to employee disengagement and burnout," said Dennis Baltzley, global head of leadership development at organizational consultancy Korn Ferry. Channeling that angst into helping the company meet the challenges of the coronavirus pandemic can improve engagement and the bottom line, he said.

'Quits Rate' Plummets

According to the Job Openings and Labor Turnover Summary, a monthly report compiled by the U.S. Bureau of Labor Statistics, employees spent the past few years job hopping at historically high rates as the economy and their confidence in the future soared. Then in March 2020, the quits rate—which is the number of jobs quit that month divided by total employment—dipped below 2 for the first time in five years. It fell further to 1.4 in April, the lowest level since April 2011, when the job market was still recovering from the Great Recession.

Typically, quits outnumber layoffs by a wide margin, according to the federal data. But that trend reversed itself in a big way in March 2020, as states began issuing stay-at-home orders to counter the coronavirus pandemic. That month, 11.5 million employees were laid off while only 2.8 million quit their jobs.

In April 2020, another 7.7 million employees were laid off while just 1.8 million quit voluntarily. Meanwhile, only 3.5 million employees were hired into new jobs in April, a low for the 20-year series.

"Right now, most employees are just looking to hang on to the work they do have, rather than trying to find something better. This is particularly true of people in the retail and hospitality industries, areas that have been hit hardest by the coronavirus-led recession," according to an analysis of the data by Quartz. "The weak job market means more people are stuck in jobs that don't fully take advantage of their talents and are generally less satisfied."

Don't Assume Everyone Is Fine

Even if asked directly, employees afraid of losing their jobs aren't likely to express their unhappiness to supervisors. Baltzley recalled a chief executive who marveled at the high satisfaction scores from employees in a recent pulse survey. "I told him, 'They're not fine, they're just not telling you,' " he said. "People put on a brave face. They're going to be grateful to have a job. They will work hard to keep that job, sometimes in unhealthy ways."

To break through that fear and foster a healthier environment, Baltzley recommended that employers:

  • Give employees choices when possible to restore some sense of control. This could include the question of working from home. Employees have a range of feelings about returning to the workplace, with some eager to rejoin colleagues while others dread the thought of increased exposure. "You don't want people to feel it's a requirement if it doesn't have to be. If you give people a choice, you relieve the pressure of feeling trapped."
  • Listen and watch carefully to evaluate how employees are feeling, because they're not likely to tell you. "Are people short of patience, uncommunicative, not addressing the big picture? That could be a sign of being overwhelmed. If you're carefully listening, you can usually tell where people are."
  • Don't double down on control by monitoring remote workers. "You have a bunch of leaders who never had to manage people remotely. They might instinctively want more meetings, more reports, to be sure employees are working, but that is exactly the opposite of what you should do. You want people trying to figure out how to make things happen without you. If they're problem solving, they're more engaged. Otherwise, you will create a workforce that's waiting for instruction."
  • Project empathy, even if employees don't indicate they need it. Leaders can do this by describing what's been difficult or challenging for them during the pandemic. "During a crisis, communication is not about providing information. It's about connection."
  • Work hard to maintain the new level of trust that may have developed during the past few months of shared hardship. "This experience has broken down a bunch of barriers. You don't want to lose that."

Many Still in Survival Mode 

In normal times, the lack of potential for advancement or promotion could lead to employee resentment. But Kimberly Prescott, a human resources consultant in Columbia, Md., who works with a range of small and mid-sized employers, said it's too soon to worry about that.

Prescott noted that safety is one of the most basic needs in Maslow's five-tier hierarchy of motivation. Until a sense of security and safety is restored, most employees won't have the bandwidth to worry much about their status or feelings of accomplishment.

"I think people are happy to have a job right now, based on what I've been hearing," she said. "Job satisfaction at this point is secondary to survival. People are still kind of holding their breath. We're in survival mode: 'I'm alive. I have a job. I have food to eat.' "

To help restore a sense of security and alleviate stress on their workers, employers should go out of their way to communicate the status of the business and what they are doing to ensure the company's survival. This is especially true for employees who've been furloughed and are waiting to be called back.

"This is the time for overcommunicating," Prescott said. "People are hungry for meaningful communication, especially around next steps and business plans. You cannot communicate too much, even if you're saying the same thing week after week. Even if it's just a survey asking how you're feeling, are you able to come back to work?"

SOURCE: Cleeland, N. (02 July 2020) "As Jobs Disappear, Employees Hang On to What They Have"  (Web Blog Post). Retrieved from https://www.shrm.org/resourcesandtools/hr-topics/employee-relations/pages/afraid-to-leave-job-covid.aspx


3 tips for a successful virtual internship program

The coronavirus pandemic has created many disruptions for the workforce and many workplaces. Another disruption that has been caused has been a disruption in career development that is gained through internship programs. Read this blog post to learn more.


The COVID-19 pandemic has disrupted all manner of talent development and acquisition activities, including internship programs.

Talent acquisition software firm Yello found in an April survey of college students that more than one-third (35%) of those who had accepted internship offers had seen their internships canceled, while 24% said their internships would be virtual. A separate April poll of employers by the National Association of Colleges and Employers found 22% of employers revoked offers to interns but that generally, "employers are adapting their summer 2020 internship programs by moving as much programming to a virtual space as possible."

Indeed, a number of larger employers have announced in recent months an intent to move internships to virtual status, similar to other roles. Microsoft, which was set to host 4,000 interns this summer, announced its shift to a virtual program in April. Kathleen Hogan, the company's executive vice president and chief people officer, previously said that students would be encouraged to "co-create their summer experience" while the program would also help shape the company's broader virtual employee experience.

Below are three ways employers can enhance their virtual internships.

#1: Choose accessible tech tools

In the scramble to move operations remote, employers have likely settled on solutions for video chat, team communication, presentations and other organizational functions. But it's important that these tools are available and accessible to interns, Bo Goliber, Head of Philanthropy at marketing agency Fingerpaint, told HR Dive in an email.

"We have some tools that work best for smaller, internal meetings, and others that we use for our clients," said Goliber, who is the creator and manager of Fingerpaint's internship program. "Our interns have access to anything our full-time staff would be using."

Shared software can enable interns to work in company systems using their own computers. That's the approach taken by Fannie Mae this summer: The mortgage financing company's nearly 140 interns use programs like Microsoft Teams, Whiteboard and Cisco Webex, Teresa Green, vice president of talent acquisition programs, told HR Dive in an interview. To keep in touch with team members, Fannie Mae's interns also have access to Yammer, a social networking service, as well as a dedicated Microsoft Teams site.

#2: Ensure equity

Even before the pandemic, employers considered a variety of factors, including manager reviews, when assessing interns' performances. In a virtual environment, managers at Fannie Mae work with interns to develop summer work plans that outline an intern's tasks and target skills to be developed and later used as the basis for evaluations, Green said. The company is also collecting feedback from other team members on their interactions with interns.

At Fingerpaint, both managers and interns fill out evaluation forms with questions that focus on areas including communication, presentation, performance and overall skills, Goliber said. The company schedules additional check-ins with teams, managers and the internships facilitators at each of its individual offices.

"Our expectations for both interns and managers remain high, and we ensure proper training to navigate through any possible challenges that may arise from being virtual," Goliber added.

The issue of compensation has been one of concern for recent graduates as they endure the pandemic. Previous research cited in a 2019 analysis by researchers at the Stanford University Institute for Economic Policy Research showed that college graduates who started their working lives during a recession earned less for at least 10 to 15 years than those who graduated during more prosperous years. As COVID-19 impacts interns, some companies have publicly stated their intent to pay interns through the pandemic, sometimes regardless of delayed start dates.

Neither Fingerpaint nor Fannie Mae are changing the ways their interns are compensated this year, Goliber and Green said. In fact, Fannie Mae is also continuing to offer payments to interns for summer housing and commuting costs that have been offered in previous years. "We still honored that, because they made some of those investments already and we didn't want to put them at a disadvantage," Green added.

Fingerpaint has not wavered from the compensation promised to interns in the company's offer letters sent back in February, Goliber said: "Because the capabilities and expectations of our interns did not change, we believe the interns should be paid for their talent and work, no matter where they are physically performing it."

#3: Keep traditions and culture alive

Experience has been a key point of focus for HR departments as employees remain socially distanced, and Fannie Mae has extended this focus to internships by creating "business mentors," a new internal role, according to Green. Business mentors work with interns on building relationships, connecting them with other employees and identifying mentorship opportunities.

The initiative is in part meant to provide a replacement for the lack of "casual collisions," or chance interactions, interns might otherwise have with other employees in a normal office setting, Green said. Fannie Mae interns have connections with their managers, "but we knew they needed more than that," she added. "We needed to create another way to engage with them and show them other areas across the company."

Virtual meetings have replaced coffee runs and lunches for many employers, but interns should have the opportunity to participate as well, Goliber said, which is why Fingerpaint designates times for virtual meetings that allow interns to connect. "We want to ensure everyone feels seen and heard — not only as an intern team, but also as individuals," she added.

Employers should also plan to keep annual traditions alive, however small. Fannie Mae interns will still receive t-shirts, Green said, but they also have the opportunity to participate in virtual community service events. The company confirmed to HR Dive that its interns will participate in a virtual event with the nonprofit Love for the Elderly, collecting homemade cards and mailing them to global older adult communities.

SOURCE: Golden, R. (30 June 2020) "3 tips for a successful virtual internship program" (Web Blog Post). Retrieved from https://www.hrdive.com/news/3-tips-for-a-successful-virtual-internship-program/580803/


The benefits and pitfalls of remote hiring

Hiring employees remotely can have several benefits, but can also come with several pitfalls. In the midst of the coronavirus pandemic, employers have turned to virtual meetings for several things which also includes virtual interviews. Read this blog post to learn more. 


Companies operating remotely over the past few months have found that hiring, onboarding and training can be done virtually, in a way that’s effective and efficient, thanks to today’s technology.

Since stay-at-home orders went into effect, 51% of respondents have interviewed a candidate remotely, and 42% have extended an offer remotely, according to a report from Addison Group, a national staffing and recruiting firm.

And remote hiring could be here to stay, as 21% of hiring managers believe virtual interviewing will be a permanent benefit moving forward. This can help expand a company’s candidate pool, as people who can’t get time off from work or have problems with childcare can still interview for the available position, says Peg Buchenroth, SVP of human resources at Addison Group.

“For larger teams with several interview rounds, it’s not uncommon for candidates to have more than three interviews ahead of an offer,” she says. “The widespread use of virtual interviews in initial interviewing rounds accelerates the process, saves the hiring organization excess expense and shows respect toward a candidate’s time.”

But the technology can also be the reason an interview goes wrong.

“A technical error could reduce face-to-face time or reflect poorly on the party responsible for the technical difficulties,” Buchenroth says. “Ensure any tools you need, such as Skype or Zoom, are properly set up and working well before the interview.”

The rapid transition to remote hiring routines isn’t always easy — for 56% of hiring managers, this is the first time they performed hiring activities remotely, the Addison Group report finds. For job candidates and employers who are used to, and more comfortable with, in-person interviews, adapting to the new normal of remote hiring can be both stressful and frustrating.

“I think there are some positions where an in-person interview can be hard to replicate, especially if that position is going to require a lot of in-person interaction at some point,” says Candace Nicolls, SVP of people and workplace at Snagajob, a staffing firm for hourly and essential workers. “Sometimes that can be hard to assess remotely unless you have a clearly thought out process.”

With many candidates having kids at home, or not having reliable internet access, it’s also important that employers are compassionate and understanding of potential issues that the work-from-home environment can impose, Nicolls says. Managers should take time to explain the process, and leave room for technical difficulties.

“I think the advantages [of remote hiring] far outweigh the disadvantages,” she says. “But when there are circumstances that people just aren’t able to control, that's actually a real opportunity for hiring managers to show empathy, and it can be a really powerful way to show your brand through all of this.”

Having a standardized remote interviewing process, where all candidates are given the same set of questions, can also help improve diversity and decrease adverse impact and bias, Nicolls says.

“Asking objective questions will help you assess candidates based on a criteria that everybody’s already decided on,” she says. “When people are interviewing face-to-face, those initial first impressions can override some of the candidate answers. We know that relying on that gut instinct when someone walks through the door isn't the best way to make hiring decisions.”

Additionally, remote hiring can be a solution to the safety concerns brought on by COVID-19. Candidates do not have to worry about taking physical safety precautions while entering an office, and employers can keep themselves and their employees safe too, says Kevin Parker, CEO of HireVue, a software company that provides pre-employment assessment and video interview tools.

“As you think about all the challenges that we face, whether in the office or not, having long lines of people coming to the office for interviews — with all those risks associated to both the candidate and the hiring company — has jumped up pretty high on the list of concerns,” Parker says. “Companies are having to re-imagine that in a more virtual way.“

With all the benefits of remote hiring, there’s reason to believe it will be the new normal after the pandemic settles, Parker says.

“We almost made a 10-year leap in 90 days in terms of the way we think about work, remote work and hiring and access to talent,” he says. “The employers are looking more broadly than they ever had before, and recognize that they can find good people almost anywhere. And candidates are recognizing that if they can work from home 20 miles from the office, they can work from home 200 or 500 miles away from the office.”

SOURCE: Nedlund, E. (24 June 2020) "The benefits and pitfalls of remote hiring" (Web Blog Post). Retrieved from https://www.employeebenefitadviser.com/news/the-benefits-and-pitfalls-of-remote-hiring


Viewpoint: How to Lead in a Crisis

As many leaders have been faced with uncertainty during the trying times the coronavirus pandemic brought upon them, it's important for them to lead with the advantage that the uncertainty can bring. Read this blog post to learn more.


Despite a host of warnings about the impending COVID-19 crisis, it caught most of us by surprise. I recall attending the regular leadership team meetings of a few of my clients the week of March 9, and by March 15, the world had changed. It was no longer a potential crisis; it was a full-on global pandemic where new terms such as "social distancing" and "flattening the curve" became part of our lexicon. A spectrum of responses emerged, from reactive chaos to deploying well-practiced business continuity modes.

The challenge that leaders face in a crisis is that their organizations aren't typically set up to operate with such uncertainty. Leaders create visions, plans and metrics to attempt to control their environments and minimize uncertainty as best they can. In a crisis many leaders default to what they know how to do in order to reduce frustration and quell their own and others' fears. This default mode is simply not productive and rather than reduce uncertainty and anxiety, it increases both.

Today all organizations are faced with a new normal—uncertainty and inability to control the environments in which they operate. We know the pandemic will end but it won't truly be over until a vaccine is available. We know the curve will eventually flatten but projections seem to change hourly. We know people will get back to work but we don't know whether social distancing will continue to influence the economy. We know that remote work is possible on a broad scale but it's not clear if this will work long-term.

Ralph Stacey and Douglas Griffin's definition of a leader is one that lends itself to today's environment: "One recognized as a leader has a greater capacity to live with the anxiety of not knowing and not being in control. The leader is recognized as having the courage to carry on interacting productively and creatively despite not knowing." This definition certainly applies to today's environment of tremendous uncertainty and great anxiety. Clearly there is much we don't know about what the future will hold. It is also clear that leadership today requires an ability to embrace uncertainty and interact productively.

While it's a relatively small sample size, we have been amazed by the approaches our clients have taken to navigate their way through these challenging times. None have had an easy time, and some were certainly more prepared than others, but most have quickly overcome their natural tendency to control and shifted to doing their best to operate in crisis mode. In each case a few important themes emerged for how to embrace the uncertainty – humility, transparency, engagement, focus and patience.

Positive humility. In their own ways, each CEO acknowledged their fear about the unknown and that they didn't have all the answers, but they exuded a sense of calmness and confidence in their organizations to work smart and hard to get through the crisis. By reinforcing and modeling positive humility CEOs have established a tone for their leadership teams to cascade throughout their organizations.

Transparency. CEOs and their leadership teams are proactively communicating difficult information openly and being clear when they don't have answers to important questions. For example, they are not promising that no jobs will be lost but they are committing to pursuing all avenues necessary such as the SBA CARES Loans to secure jobs as long as possible.

Engagement. When in doubt these organizations are doing their best to negotiate clear expectations (i.e., daily check-in sessions with supervisors) and over-communicate (i.e., using email, internal web site and supervisors to reinforce that hourly workers will be paid weekly). They are also encouraging managers and staff to use multiple channels to remain in contact both formally and informally (i.e., Virtual Team Meetings, Virtual happy hours, random watercooler calls).

Focus. After a short period of getting their remote offices working, CEOs and their leadership teams redoubled their efforts to ensure their organizations remained focused on the core mission (i.e., executing loans, building interiors, registering / renewing members). They also reinforced that today's plans would likely change tomorrow and that learning from mistakes and helping employees and customers manage uncertainty is a big part of their jobs.

Patience. In a crisis adults often revert to overdone strengths – people who are naturally decisive might become arrogant or people who tend to be naturally empathetic might become overly protective. These CEOs and their leadership teams recognize this tendency to revert. They are working hard to have patience with each other by giving space, not overreacting themselves and providing gentle feedback.

These are extremely challenging times and despite efforts by the smartest scientists, economists and business leaders in the world, there is no clear path to when things will get back to normal. Ambiguity is a daily obstacle for most business leaders, but today we are dealing with ambiguity on steroids. It is not easy but we are so encouraged to see so many CEOs and their leadership teams embrace the ambiguity to help their organizations get to the other side of this crazy time.

Jack McGuinness is co-founder and managing partner of Relationship Impact, a consulting firm focused on helping great leaders build great leadership teams.

This article is excerpted from www.ChiefExecutive.net with permission from Chief Executive. C 2020. All rights reserved.

SOURCE: McGuinness, J. (20 April 2020) "Viewpoint: How to Lead in a Crisis" (Web Blog Post). Retrieved from https://www.shrm.org/ResourcesAndTools/hr-topics/employee-relations/Pages/Viewpoint-How-to-Lead-in-a-Crisis-Coronavirus.aspx