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HB 244 and COVID Considerations for the 2021 School Year


July 21, 2021

Megan Greulich

July 21, 2021

On July 14, 2021, Governor DeWine signed Ohio House Bill (HB) 244, which prohibits public school districts and state institutions of higher education from requiring an individual to receive a vaccine that has not been granted full United States Food and Drug Administration (FDA) approval. Because existing COVID-19 vaccines are currently operating under emergency FDA approval, they fall within this category.

In addition to the prohibition against requiring such vaccinations, the new language also prohibits discrimination against an individual who has not received a vaccine that does not have full FDA approval. This prohibition includes requiring the individual to engage in or refrain from engaging in activities or precautions that differ from the activities or precautions of an individual who has received such a vaccine.

HB 244 becomes effective on October 13, 2021, nearly two months after many schools return in the fall, meaning that the restrictions will not be applicable to schools until that date. It also is important to note that the restrictions are tied directly to vaccinations that do not have full FDA approval, and as a result, if COVID vaccines are granted full FDA approval, the restrictions no longer will apply for purposes of COVID planning.

Ultimately, the implementation of HB 244 is likely to reduce school districts’ flexibility in implementing the guidance and recommendations from health and other agencies, instead requiring more of an all or nothing approach to implementation of COVID precautions. With the return to school quickly approaching, both the Centers for Disease Control and Prevention (CDC) and the American Academy of Pediatrics (AAP) have released updated guidance, with continued revisions to guidance from other agencies anticipated.

CDC Guidance

While many of the recommendations are familiar, including the emphasis on the importance of returning to in-person learning and implementing a layered approach to COVID precautions, the July 9 updates to the CDC K-12 guidance focuses in part on the importance of monitoring vaccination status and rates of transmission within each community. The guidance further recommends that where a school plans to reduce existing precautions due to high vaccination rates and low transmission rates, precautions should be reduced one at a time, with the impact of such reduction monitored prior to implementing subsequent precaution reductions.

Additionally, the revised guidance provides for differing standards in certain circumstances depending on vaccination status. Due to the passage of HB 244, beginning in mid-October, Ohio school districts will need to make difficult decisions about how to address this guidance in order to avoid differentiating between individuals who have and who have not received a COVID vaccine. As a result, in order to remain in compliance with HB 244, school districts should work with board counsel to ensure that any differing restrictions are not based on vaccination status.

AAP Guidance

While the AAP guidance released on July 19 also emphasizes the importance of in-person learning, the organization takes a more stringent approach to recommendations for schools, particularly with regard to masking recommendations. In doing so, the AAP specifically notes that its recommendations are based in part on the fact that students under the age of 12 are not yet eligible for vaccination, and it notes the challenges associated with monitoring and verifying vaccination status of individuals who currently are eligible to receive the vaccine. As a result, the AAP recommends universal masking in schools at this time. More specifically, the AAP recommends that all students older than two years and all school staff wear face masks at school except where a medical or developmental condition prohibits mask use. In addition to masking recommendations, AAP also urges school districts to continue to take a multi-layered approach to COVID precautions and work closely with state and local health authorities to coordinate their efforts.

Ohio Department of Health (ODH) Guidance

While ODH has yet to release revised guidance for the 2021-2022 school year, it appears that such guidance is imminent and expected to be released within the next few weeks. In addition to forthcoming state-level guidance, local health departments also have begun releasing guidance to address HB 244 and revised agency recommendations. As a result, districts should remain vigilant in keeping up with the changing standards and recommendations as we continue to move toward students’ return to school.

United States Department of Education (USDOE) Guidance

In addition to the health agency guidance, it also bears noting that USDOE has acknowledged the CDC’s recently updated guidance and is in the process of updating the 2021 ED Covid-19 Handbook, Volume 2 accordingly to address any necessary changes in light of the CDC’s revised guidance for K-12 schools.

As always, we will continue to keep you updated on any legal and/or guidance-related developments. In the meantime, please reach out to any W|H education attorney here if you have questions about your district’s plans for the 2021-2022 school year.

Megan Greulich is an associate at Walter | Haverfield who focuses her practice on education law. She can be reached at mgreulich@walterhav.com or at 614-246-2263.

 

Ohio H.B. 110 Allows for Creation of Online Learning Schools


July 12, 2021

Christina PeerJuly 12, 2021

On July 1, 2021, Governor DeWine signed H.B. 110, Ohio’s 2022-2023 biennial budget, into law, which allows local, city, exempted village and joint vocational school districts (“school districts”) to request to use an “online learning model” through the creation of an “online learning school.” Online learning is defined as a scenario where students work primarily from home on assignments delivered via an internet or computer-based instructional model. An online learning school, operated by a school district, is a new concept that differs from Remote Learning Plans utilized during the 2020-2021 school year. An online learning school also differs from a blended learning model or an alternative school (information on these learning models is available here).

While an online learning school could function in a similar manner to the remote learning plan used by school districts during the 2020-2021 school year, districts should carefully consider the requirements for an online learning school. First and foremost, an online learning school will be recognized by the Ohio Department of Education as a separate school that is being operated by the local, city, exempted village or joint vocational school district. The online learning school will have its own IRN number, and students must be assigned to the online learning school for purposes of EMIS reporting and school funding. Additionally, to operate an online learning school, a local, city, exempted village or joint vocational school district must:

  • Provide students enrolled in the online learning school with a computer that is equipped with a filtering device (or software) that protects against internet access to materials that are obscene or harmful to juveniles at no cost;
  • Provide internet access to all students enrolled in the online learning school at no cost;
  • Provide a comprehensive orientation to students and their parents/guardians prior to enrollment in the online learning school;
  • Implement a learning management system that tracks the time students participate in online learning activities; and
  • Document all student learning activities that are completed offline with participation record checks and approved by the teacher of record.

Furthermore, the state board of education has been tasked with revising the operating standards that are applicable to school districts to include standards for online learning. These standards must include:

  • Student-to-teacher ratio of no more than 1:125 per online learning classroom;
  • The ability of all students, at any grade level, to earn credits and advance to the next grade upon demonstrating mastery or knowledge through competency-based learning models;
  • Requiting that online learning schools have an annual instructional calendar of no less than 910 hours;
  • Provisions for:
    • The licensing of teachers, administrators and other professionals;
    • Effective instructional materials and equipment; and
    • Supervision of each school, including regulations for the preparation of all necessary records and reports, admission of pupils, etc.

While H.B. 110 provides districts with a mechanism to continue providing online instruction, districts should carefully consider all of the obligations and guidelines before opening and operating an online school. Districts must also consider staffing issues and collective bargaining obligations. Finally, districts should determine how the needs of students with disabilities who enroll in the online learning school will be met. Any school district that wishes to develop an online learning school must complete the School District Online Learning School Notification, which can be downloaded here, and submit it to this email address by August 1, 2021.

Christina Peer is chair of the Education Law Group at  Walter | Haverfield. She can be reached at cpeer@walterhav.com or at 216-928-2918.

The EEOC Provides Further Clarification on COVID-19 Issues and Re-Affirms That Employers May Require Employees to Get Vaccinated


June 3, 2021

Rina RussoJune 3, 2021

On May 28, 2021, the Equal Employment Opportunity Commission (EEOC) updated and expanded its technical assistance publication addressing COVID-19 issues arising under the federal equal employment opportunity laws.  In its updated guidance, the EEOC reiterated its prior opinion that employers may require employees to receive the COVID-19 vaccine as a condition of physically entering the workplace, so long as such requirement allows employees to seek accommodations from the requirement on the basis of a disability or a sincerely held religious belief.  The updated guidance also provides further clarity on several other COVID-19 vaccine issues, the highlights of which are discussed below.

Mandatory Vaccinations

Employers that require employees entering the workplace to receive the COVID-19 vaccine (with exceptions for reasonable accommodations) will still need to abide by all applicable laws in implementing that requirement.  As pre-screening vaccination questions are likely to elicit information about a disability under the ADA, an employer that administers the vaccine itself (or has contracted with a third-party to administer the vaccine to its employees) must show that any pre-screening disability questions are “job-related and consistent with business necessity.”  Employers can avoid this issue if they require employees to receive a COVID-19 vaccine independently from a third-party (such as through a pharmacy or health care provider to which the employer has no connection).

Mandatory Vaccinations and Pregnant Employees

If an employee seeks an accommodation to a vaccine requirement due to pregnancy, the employer must make sure that the employee is not being discriminated against as compared to other employees similar in their ability or inability to work. According to the EEOC, this means that “a pregnant employee may be entitled to job modifications, including telework, changes to work schedules or assignments, and leave to the extent such modifications are provided for other employees who are similar in their ability or inability to work.”

Proof of Vaccination is Confidential Medical Information

Regardless of whether an employer makes vaccination mandatory, the EEOC also clarified that information related to an employee’s COVID-19 vaccination status is confidential medical information under the ADA. Therefore, while employers may lawfully request “proof” of receipt of the COVID-19 vaccine, including in connection with mask policies, they must retain that documentation as confidential and separate from an employee’s personnel file.  Employers should also be careful to caution employees not to provide any other medical information as part of the verification process.

Vaccination Incentives

In response to concerns about what employers can do to encourage employees to receive the COVID-19 vaccine (as opposed to requiring the vaccination), the EEOC has indicated that employers can provide employees incentives for voluntarily receiving the COVID-19 vaccine. However, any such incentive should not be so substantial as to be coercive.  However, one question that the EEOC did not address is whether and to what extent an employer must provide an equal incentive to an employee who is unable to obtain a vaccine because of a medical or religious reason.

Accommodations for Fully Vaccinated Employees

The EEOC’s guidance also addresses accommodation requests from fully vaccinated employees that are still seeking accommodations based on a continued concern for heightened risk of severe illness from COVID-19.  The EEOC clarifies that employers must treat these requests for accommodation just like all others, and should engage in the interactive process to determine if there is a disability-related need for a reasonable accommodation.  The EEOC provides the example that some immunocompromised individuals may still need reasonable accommodations because their conditions render the vaccines less effective.

Please note that the EEOC’s guidance is limited to the federal equal employment opportunity laws it enforces.  Accordingly, state and local laws may have different requirements.  We will continue to monitor developments related to the new vaccines and related workplace questions that arise.  The attorneys at Walter | Haverfield are here to help you navigate your obligations under local, state, and federal laws.

Rina Russo is a partner at Walter | Haverfield who focuses her practice on labor and employment law. She can be reached at rrusso@walterhav.com or at 216-928-2928.

Navigating ESSER Funds in an Ever-Changing COVID-19 Landscape

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June 2, 2021

James McWeeny

June 2, 2021

Although the pandemic is seemingly subsiding in the U.S., public school districts in Ohio still face the challenge of how to use multiple forms of pandemic-related government funding. Notably, the task of navigating the permissible uses of COVID-19 funds, and the procedures school districts must follow with respect to them, pose a number of complex legal issues.

The Funds

By way of background, the federal government has made three main sources of funds available to state educational agencies, which local school districts may in turn apply for and use for certain enumerated purposes.  These federal funds include:

  • The Elementary and Secondary School Emergency Relief Fund I (“ESSER I”), as authorized by Section 18003 of Division B of the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, enacted on March 27, 2020 and available for obligation by school districts through September 30, 2021. The general purpose of ESSER I funds is to provide funding for the prevention, preparation for, and response to the COVID-19 pandemic;
  • The Elementary and Secondary School Emergency Relief Fund II (“ESSER II”), as authorized by the Coronavirus Response and Relief Supplemental Appropriations (“CRRSA”) Act, enacted on December 27, 2020 and available for obligation by school districts through September 30, 2022. The general purpose of ESSER II funds is to provide funding to address learning loss, preparation for the reopening of schools, as well as projects to improve the air quality in school buildings; and
  • The American Rescue Plan Elementary and Secondary School Emergency Relief Fund (“ARP ESSER”), as authorized by the American Rescue Plan (“ARP”) Act, enacted on March 11, 2021 and available for obligation by school districts through September 30, 2023. The general purpose of ARP ESSER funds is to provide funding to address learning loss as well as the reopening and operation of schools in a way that maintains the health and safety of students, educators, and staff.

Permissible Uses of Funds

According to the U.S. Department of Education (“U.S. DOE”), a school district is permitted to use the various funds for a “wide range of activities.”  However, there are parameters. With respect to ESSER funds, the primary question most schools have asked is, “What kinds of programs, projects, and/or purchases can our district use the various funds for?”  Importantly, each of the funds can be used for the same allowable purposes. However, for ARP ESSER funds, a school district must do the following:

  • Reserve at least twenty percent (20%) of its total ARP ESSER award to address learning loss through the implementation of evidence-based interventions;
  • Ensure that such interventions respond to the students’ academic, social, and emotional needs; and
  • Address the disproportionate impact of COVID-19 on underrepresented student groups, including students from low-income families, students of color, children with disabilities, English language learners, migratory students, students experiencing homelessness, and youth in foster care.

Permissible uses of ESSER funds include, but are not limited to, the following:

  • Any activities authorized by the Elementary and Secondary Education Act , the Individuals with Disabilities Education Act , the Adult Education and Family Literacy Act , the Perkins Career and Technical Education Act ; and the McKinney-Vento Homeless Assistance Act;
  • Repairing and improving school facilities to reduce the risk of virus transmission and exposure to environmental health hazards, which includes remodeling, alterations, and renovations necessary to prevent, prepare for, and respond to COVID-19. However, the U.S. DOE discourages the use of funds for new construction projects, if the use of these funds for new construction limits a school district’s ability to support other essential needs or initiatives;
  • Activities to improve indoor air quality, such as upgrades to a school facility’s HVAC system as well as related projects that promote social distancing and safe in-person instruction;
  • Activities to address the unique needs of children from low-income families, children with disabilities, English language learners, racial and ethnic minorities, students experiencing homelessness, and foster care youth;
  • The purchase of personal protective equipment, cleaning and sanitizing materials, portable air purifiers, as well as emergency supplies necessary to adequately respond to COVID-19;
  • Providing COVID-19 testing and vaccinations to district educators, staff, and eligible students;
  • Implementing evidence-based interventions to support students who have suffered lost instructional time due to COVID-19;
  • Activities to support students’ social, emotional, mental health, and academic needs, including the hiring of support personnel such as nurses, counselors, and social workers to effectuate these goals;
  • The purchase of educational technology, including hardware, software, connectivity, assistive technology, and adaptive equipment, for students that aids in regular and substantive educational interaction between students and their classroom instructors, including students from low-income families and children with disabilities;
  • To provide support for summer learning and enrichment programs; and
  • Other activities that are necessary to maintain operation of and continuity of services, including continuing to employ existing or hiring new school staff.

Other Legal Issues

School districts must also be cognizant of various state and federal laws when using ESSER funds.  For instance, if schools use funds for renovation, repair, improvement, and/or construction projects, they must comply with both state and federal procurement laws. As such, schools must follow the dictates of Ohio Revised Code 3313.46 as well as federal procurement laws, including but not limited to, those identified in the Uniform Grant Guidance. Schools must also comply with federal prevailing wage laws for all contracts over $2,000 for the construction, alteration, or repair of public buildings and must comply with the Americans with Disabilities Act as well as state and local design standards. Further, schools must track and separately account for each of the ESSER funds as well as describe, identify, and maintain in their records the COVID-19 “connection” for which the various funds are used.

Moreover, districts should be mindful of the timelines associated with any projects under these grant funds to ensure they are consistent with the timelines associated with the ESSER funds.  Likewise, school districts should keep in mind that certain activities may be subject to approval by the Ohio Department of Education.

If you have questions regarding the allowable use of funds under ESSER I, ESSER II, or ARP ESSER, please contact us here.

James McWeeney is a partner at Walter | Haverfield who focuses his practice on education lawlabor and employment and litigation. He can be reached at jmcweeney@walterhav.com or at 216-928-2959.

Sara G. Katz is an associate at Walter | Haverfield who focuses her practice on education law. She can be reached at skatz@walterhav.com or at 614.246.2274. 

Governor DeWine Requires Schools to Continue Social Distancing and Mask Wearing


May 18, 2021

Christina PeerMay 18, 2021

On May 12, 2021, Governor DeWine announced public health orders such as capacity limits, social distancing and the mask mandate will come to an end, with the exception of those for nursing homes and assisted living facilities.  The next day, the Centers for Disease Control and Prevention (CDC) announced that those who have been fully vaccinated may forgo wearing masks both indoors and outdoors, except in crowded indoor settings like buses, planes, airports, and hospitals. The announcement did not make any specific mention of school districts, which left districts in a state of uncertainty.

Over the weekend, both Governor DeWine and the CDC released updated information for school districts.  The CDC is urging schools nationwide to maintain COVID-19 health guidelines through the end of the current school year. Governor DeWine echoed the CDC’s stance in a letter sent to all Ohio school districts. In that letter, Governor DeWine said he is ordering that schools continue to follow health protocols which include wearing masks and distancing from others.  Governor DeWine’s letter stated that the decision was based on the limited number of students vaccinated and the need to “maintain consistency and model safe behavior for Ohio’s students.”

Please reach out to us here if you have questions or need clarification. We will happily assist you.

Blended Learning: What you need to know before the July 1 deadline


May 17, 2021

Megan GreulichMay 17, 2021 

With districts still scrambling to determine how to continue online learning for the 2021-2022 school year and beyond, many are considering implementation of blended learning. Under Ohio law, “blended learning” means the delivery of instruction in a combination of time in a supervised physical location away from home and online delivery whereby the student has some element of control over time, place, path or pave of learning.  If your district is considering this option, a completed Blended Learning Declaration form must be submitted to ODE by July 1.

In addition to submission of the declaration form by the listed deadline, boards also are required to adopt policies and procedures addressing the following topics:

  1. Means of personalization of student centered learning models to meet each student’s needs.
  2. The evaluation and review of the quality of online curriculum delivered to students.
  3. Assessment of each participating student’s progress through the curriculum. Students shall be permitted to advance through each level of the curriculum based on demonstrated competency/mastery of the material.
  4. The assignment of a sufficient number of teachers to ensure a student has an appropriate level of interaction to meet the student’s personal learning goals. Each participating student shall be assigned to at least one teacher of record. A school or classroom that implements blended learning cannot be required to have more than one teacher for every one hundred twenty-five students.
  5. The method by which each participating student will have access to the digital learning tools necessary to access the online or digital content.
  6. The means by which each school shall use a filtering device or install filtering software that protects against internet access to materials that are obscene or harmful to juveniles on each computer provided to or made available to students for instructional use. The school shall provide such device or software at no cost to any student who uses a device obtained from a source other than the school.
  7. The means by which the school will ensure that teachers have appropriate training in the pedagogy of the effective delivery of on-line or digital instruction.

Districts have significant leeway in developing locally-adopted policies and procedures to address the listed topics, and may want to consider how existing procedures can be incorporated into blended learning policies and procedures to meet the required standards. The policies and procedures are not required to be submitted to ODE, but ODE recommends that Boards act to adopt them by the July 1 deadline. While the statute and rule do not include a deadline by which the policies and procedures must be adopted, it is important to ensure that the requisite language is in place prior to implementation of a blended learning model.

Additionally, while the required policies and procedures do not reference students with disabilities, districts must be cognizant of their obligation to provide these students access to blended learning on the same basis as their non-disabled peers.  Districts will need to consider how to make online learning opportunities accessible to students with disabilities through the use of accommodations.  Districts also will need to determine the best way to provide the specially designed instruction required by students’ individualized education plans.

Megan Greulich is an associate at Walter | Haverfield who focuses her practice on education law. She can be reached at mgreulich@walterhav.com or at 614-246-2263.

Governor DeWine Announces Ohio Health Orders to End on June 2, 2021; Schools Left with Choice to Continue Requiring Masks


Christina Peer

May 17, 2021

Ohio’s health orders will end on June 2, 2021, more than a full year after Ohio Governor Mike DeWine first enacted the orders. Prior restrictions will remain in nursing homes and assisted living facilities, but all other public health orders such as capacity limits, social distancing and the mask mandate will come to an end. High vaccination rates among Ohioans 65 and older are cited as a major reason to forego the mandates.  This announcement leaves Ohio schools the choice of what rules to keep in place in order to ensure the safety of employees, students and visitors.

Two days after Ohio announced the end of COVID-related mandates, the Centers for Disease Control (CDC) updated its guidance for those who have been fully vaccinated. In general, people are considered fully vaccinated two weeks after their second dose in a two-dose series, such as the Pfizer or Moderna vaccines, or two weeks after a single-dose vaccine, such as the Johnson & Johnson vaccine. The CDC declared people who have been fully vaccinated can cease wearing masks and no longer need to stay six feet apart. No longer do fully vaccinated individuals need to be tested before or after travel, self-isolate after travel or quarantine after being around someone who has COVID-19. Notably, CDC guidance for schools has not yet been updated.

These announcements leave schools with more questions than answers – especially those districts that will be in school after June 2. However, even districts whose school year ends prior to June 2 need to consider the implications of these announcements with respect to graduation ceremonies as well as extended school year (ESY) programs and extended learning opportunities that will be provided during the upcoming summer. Two key considerations for districts when considering changes to current requirements are (1) current board policies related to face coverings, social distancing, etc. and (2) agreements with unions representing district employees related to these issues. It is likely that current policies or union agreements (or both) require face coverings and social distancing. These requirements cannot be changed without adopting a new policy and, if there is an existing union agreement, negotiating with the union. Given these issues, it will be logistically challenging for districts to change their current requirements prior to the end of the school year; however, making changes for summer is a more viable option.

In making decisions moving forward, districts should consider any orders or guidance from local departments of health along with guidance from the CDC. Districts will also have to consider that students under the age of 12 are not currently eligible to be vaccinated. Further, it is highly unlikely that all staff members and vaccine-eligible students have been vaccinated. Districts must decide whether they wish to inquire as to the vaccination status of employees and vaccine-eligible students. For employees, the Equal Employment Opportunity Commission has stated that this inquiry is not prohibited; however, follow-up questions regarding why an individual is not vaccinated should be avoided. For students, as the Ohio Revised Code already requires that immunization records be provided, there is no legal impediment to inquiring about a student’s COVID vaccination status. If districts do elect to obtain information regarding vaccination status, they must determine how (or if) this information will be utilized (e.g., different masking and social distancing requirements for vaccinated vs. unvaccinated individuals).

As with all things COVID-related, these issues will almost certainly continue to evolve throughout the summer. Walter | Haverfield attorneys will continue to monitor guidance the State of Ohio, the CDC and the Ohio Department of Education and provide updates. If you have questions, please reach out to us here. We are happy to help with any challenges your district may be experiencing.

Christina Peer is chair of the Education Law Group at  Walter | Haverfield. She can be reached at cpeer@walterhav.com or at 216-928-2918.

 

 

Legislative Changes to Employee Benefits Law: Federal Funding for COBRA and Flexible Spending Account Relief

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May 14, 2021

Petra BradburyMay 14, 2021 

In response to the coronavirus pandemic, Congress enacted several legislative changes to employee benefits law. The Consolidated Appropriations Act of 2021 (“CAA”) creates temporary special rules for health and dependent care flexible spending accounts, and the American Rescue Plan Act (“ARPA”) provides subsidized COBRA coverage for individuals and families.

Flexible Spending Accounts

The CAA, passed at the end of 2020, allows plan sponsors to make several optional amendments to flexible spending account plans, including amendments to allow post-termination reimbursements from health flexible spending accounts, plan year carryovers, and extended grace periods.

Post-Termination Reimbursements. The CAA allows plan sponsors to amend health flexible spending account plans to permit post-termination reimbursements to employees who cease to participate in the plan during calendar year 2020 or 2021. The permitted amendment would allow former participants to spend down unused benefits or contributions through the end of the plan year during which the employee ceased to participate—including through any grace period.

Under the CAA, post-termination reimbursements for health flexible spending accounts must follow rules similar to the rules that apply to dependent care flexible spending accounts. A dependent care flexible spending account plan can include a spend-down provision if:

  • The plan provides dependent care assistance;
  • The plan does not discriminate in favor of highly compensated employees;
  • 25 percent or less of amounts paid or incurred by the employer during the year are for principal shareholders or owners of the employer;
  • Eligible employees are notified;
  • Written expense statements are provided to employees; and
  • Applicable nondiscrimination testing is satisfied.

Plan Year Carryovers. For plan years ending in 2020 and 2021, the CAA allows plan sponsors to permit participants to carryover the entire unused benefit or contribution remaining in the participant’s flexible spending account to the next plan year.  Prior law only allowed carryovers for health flexible spending accounts—limited to $550 per plan year—but the CAA permits carryovers of the entire account balance for both health and dependent care flexible spending accounts.

In addition, dependent care flexible spending accounts may permit participants who elected dependent care flexible spending account coverage for the 2020 plan year during an enrollment period that ended on or before January 31, 2020, and whose dependent child reached age 13 during the 2020 plan year, to continue to use their dependent care flexible spending account funds for the child’s expenses through the end of the 2020 plan year.  Further, if a balance remains in the participant’s dependent care flexible spending account at the end of the 2020 plan year, the participant may use that balance for the child’s expenses into 2021, until the child reaches age 14.

Extended Grace Periods. Under the grace period rule, a flexible spending account plan may permit employees to use amounts remaining from the previous year—including amounts remaining in a health flexible spending account—to pay expenses incurred for qualified benefits after the end of the plan year. For plan years 2020 and 2021, the CAA allows plan sponsors to extend the grace period from two and a half months after the end of the plan year, to 12 months after the end of the plan year.

COBRA Premium Subsidy & Tax Credit

The ARPA, passed in March 2021, provides subsidized COBRA coverage of up to six months of 100 percent coverage from April 1, 2021, through September 30, 2021, for assistance-eligible individuals. An assistance-eligible individual is a COBRA qualified beneficiary who is eligible for and elects COBRA coverage due to a qualifying event of involuntary termination of employment or reduction of hours. The subsidy is available for any period of coverage between April 1, 2021, and September 30, 2021. However, eligibility may end earlier if the qualified beneficiary’s maximum period of coverage ends before September 30, 2021, or if the qualified beneficiary becomes eligible for coverage under another group health plan.

Individuals who do not have a COBRA election in effect on April 1, 2021—but who would be eligible for the subsidy if they did—are also eligible for the subsidy. Further, individuals who discontinued COBRA coverage before April 1, 2021—but who would be eligible for the subsidy if they had not discontinued coverage—are eligible if they are within their maximum period of coverage. These individuals can make a COBRA election beginning April 1, 2021, and ending 60 days after the group plan provides the individual the required notification of the extended election period.

Notices from Assistance-Eligible Individuals to Health Plan. Assistance-eligible individuals must notify the group health plan if they cease to be eligible for the subsidy, and can face penalties of $250 (or more for intentional failures) if the individual fails to provide the required notification.

Notices to Assistance-Eligible Individuals. Group health plans must provide certain notices to assistance-eligible individuals, including:

  • Notice of assistance availability;
  • Notice of extended election period; and
  • Notice of expiration of subsidy.

The Department of Labor has issued model notices that group health plans should use to notify eligible individuals and a Summary and Request for Treatment as an Assistance Eligible Individual. Copies of the model notices and the Summary are attached to this Client Alert.

Refundable Tax Credit. Under the ARPA, the employer pays the cost of subsidized COBRA coverage and can take a refundable quarterly tax credit against Medicare payroll taxes equal to the premium amounts not paid by assistance-eligible individuals. The quarterly credit may be paid in advance.

State “Mini-COBRA”

Employers who have fewer than 20 employees may have to comply with ARPA provisions described above that apply with respect to their state’s “mini-COBRA” law for extended continuation coverage.  The ARPA (i) does not require an extension of the time in which to apply for coverage under the state’s mini-COBRA law, (ii) does not require certain notices required under the ARPA for federal COBRA to be provided if notice is not required under the state’s mini-COBRA law, and (iii) does not require subsidized coverage be provided if the loss of coverage resulted from a reduction in hours if the state mini-COBRA law does not provide for continuation coverage in that circumstance.  A copy of the Department of Labor’s model notice regarding state continuation coverage and the ARPA is attached.

Severance Agreements

Severance agreements often include provisions regarding employer payment of some or all COBRA premiums for a specified time period.  Future severance agreements that will take effect during the subsidy period should be appropriately drafted to take into account the ARPA 100% subsidy.  Existing severance agreements should be reviewed to determine if any changes are needed.

Conclusion

The legislative changes to flexible spending account plans are permissive—not mandatory—and have administrative and financial implications. Plan sponsors with questions about adopting the permitted amendments and administering the changes should contact Walter Haverfield attorneys.

Employers with questions about how to administer the COBRA subsidy, provide the required notice, and take the new COBRA tax credit under the ARPA should contact Walter Haverfield attorneys before May 30, 2021, when the first notices are due.

Resources 

Tim Jochim is a partner in the Columbus, Ohio office of Walter |Haverfield and a national authority on business succession and employee stock ownership plans (ESOPs). Tim can be reached at tjochim@walterhav.com or at 614-246-2152.

Mike Sorice is an associate in the Columbus, Ohio office of Walter | Haverfield. He assists closely-held businesses with business succession planningmergers and acquisitions, and tax planning. Mike can be reached at msorice@walterhav.com or at 614-246-2262.

Russell Shaw is a partner in the Cleveland, Ohio office of Walter | Haverfield and focuses his practice on employee benefits, which include retirement plans, executive deferred compensation plans, welfare benefit plans, VEBAs, and 403(b) tax-deferred annuity plans. Russell can be reached at rshaw@walterhav.com or at 216-928-2888.

Petra Bradbury is an associate in the Cleveland, Ohio office of Walter | Haverfield and focuses her practice on employee benefits and deferred compensation plans. Petra can be reached at pbradbury@walterhav.com or at 216-619-7841. 

School Districts Can Get Tax Relief for Certain Paid Leave Expenses

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May 4, 2021

Peter ZawadskiJames McWeeny

May 4, 2021

It’s not your typical tax relief. And while it’s available for only a small window of time, it’s tax relief nonetheless. Last month, the IRS issued guidance explaining how employers, including school districts, can claim tax credits under the American Rescue Plan Act of 2021 (“Act”).

The Act allows school districts to claim refundable tax credits to obtain reimbursement for the cost of providing paid sick and family leave to employees due to COVID-19. School district employees may also have taken leave to receive COVID-19 vaccinations or recover from a condition related to vaccinations. The employees must not have been able to work or telework due to COVID-19-related reasons. The “catch” is that the tax credits are only available for paid leave taken from April 1, 2021, through September 30, 2021.

The paid leave credits are tax credits against the employer’s share of the Medicare tax. The tax credit for paid sick leave wages is equal to the sick leave wages paid for COVID-19-related reasons for up to two weeks (80 hours), limited to $511 per day and $5,110 in the aggregate, at 100 percent of the employee’s regular rate of pay. A tax credit is also available for paid family leave. The amount of the credits may increase depending on health plan expenses and contributions due to collectively bargained benefits.

Employers can use the federal employment tax return forms (Form 941) to report the requisite information. This information consists of the total paid sick and family leave wages, along with the eligible health plan expenses, collectively bargained contributions, and the employer’s share of social security and Medicare taxes on paid leave wages. Set-aside options and advances are available as well.

As with most tax laws, the devil is in the details.  An overview of the tax credit is available here. If you have questions or require additional information, we are ready and able to assist you.

Peter Zawadski is a partner at Walter | Haverfield who focuses his practice on education law as well as labor and employment matters. He can be reached at pzawadski@walterhav.com or at 216-928-2920.

James McWeeney is a partner at Walter | Haverfield who focuses his practice on education lawlabor and employment and litigation. He can be reached at jmcweeney@walterhav.com or at 216-928-2959.

ODE Releases Guidance on Remote Learning for the 2021-22 School Year


April 5, 2021

Megan GreulichApril 5, 2021

On April 1, 2021, the Ohio Department of Education (“ODE”) released much-anticipated guidance regarding remote learning options for the 2021-22 school year. While legislative action to address continuation of remote learning options for the upcoming school year remains uncertain, ODE’s guidance outlines the options that exist under current law for districts wishing to continue remote learning options for students. These options will remain once the Remote Learning Plan option, which was created to address challenges associated with the Covid-19 pandemic during the 2020-21 school year, ends.

ODE’s guidance – available here – addresses four options that currently exist under Ohio law, including (1) alternative schools, (2) blended learning, (3) credit flexibility, and (4) the innovation education pilot program. Each option carries with it different procedural requirements for implementation, and districts should be aware that the remote learning options available under these programs will not provide the same level of flexibility as exists under the current temporary remote learning plans. ODE’s guidance includes a comparison chart detailing the general information about eligibility, required components, and impacts of each option, but districts are encouraged to work with legal counsel to determine which option is most appropriate to accomplish district goals. There are a few key points to note about the available options.

Alternative Schools

Authority for establishment of alternative schools is set forth under Ohio Revised Code Section (RC) 3313.533, which requires adoption of a board resolution addressing required components set forth in the statute. While alternative schools are an option for providing remote learning, they are structured to serve a limited student population, including students who are on suspension, having truancy problems, experiencing academic failure, have a history of class disruption, exhibiting other academic or behavioral problems, or who have been discharged or released from the custody of the Department of Youth Services. While this option would allow for remote learning for students falling within these groups, it does not provide a remote learning option that can be made available to all district students.

Blended Learning

Authority for establishment of blended learning is set forth under RC 3302.41 and Ohio Administrative Code Rule (OAC) 3301-35-03, which require submission of a blended learning declaration to ODE and adoption of policies and procedures as outlined in the Rule, which must be submitted with the blended learning declaration. By definition, blended learning requires a combination of school-based learning and remote online learning, and as a result, does not provide an all-remote option. There is, however, no limitation on the amount of remote versus school-based learning that must occur under a blended learning model.

More information on blended learning and access to the blended learning declaration form are available here. This year’s submission deadline for blended learning declarations is July 1, 2021. As a result, districts wishing to move forward with this option will need to develop required policies and procedures to submit to ODE with the declaration form by that date.

Credit Flexibility

Credit flexibility is addressed under RC 3313.603 and OAC 3301-35-01. Districts already should have policies and procedures in place addressing credit flexibility, which serves as an alternative option for earning graduation credit through personalized plans for each student. While this provides a remote learning option, it does not provide the same one-size-fits-all approach  permitted by temporary remote learning plans. Credit flexibility requires development of customized plans for each participating student and monitoring of the student’s progress on his/her plan. Additionally, credit flexibility cannot be the sole instructional delivery method for a student.

There also are a number of other important considerations associated with implementation of credit flexibility. For example, potential impacts on athletic eligibility requirements and district obligations related to the use of credit flexibility by students with disabilities should be considered in plan development. ODE provides a number of helpful guidance documents regarding credit flexibility, which are available here, in addition to its web conference series on the topic, which can be accessed here.

Innovation Education Pilot Program

Authority for implementation of an innovation education pilot program is set forth under RC 3302.07 and OAC 3301-46-01, which  allows a district to submit an application to ODE proposing an innovation pilot program. The Rule provides that “‘innovation means a new, experimental or disruptive educational approach that is developed based on an identified need and seeks continuous improvement in student achievement or student growth,” and lists the specific items that must be included in a district’s application, including, among others, exemptions from specific statutory provisions or rules that are necessary to carry out the program. It is important to note that this option requires the written consent of any applicable teachers’ union to be submitted to ODE along with the district’s application.

ODE has the authority to approve or deny innovation pilot program applications, and this option must be renewed each school year. Additionally, there are limitations on the statutory exemptions that can be proposed through innovation pilot program applications. These limitations are addressed in ODE’s comparison chart.

Regardless of your plans, it is important to work with legal counsel to determine which approach is most appropriate to meet your district’s goals and to ensure that all procedural requirements are met in pursuing the selected option(s). We will continue to keep you updated on any remote learning option developments as they occur. Please reach out to us here.

Megan Greulich is an attorney at Walter | Haverfield who focuses her practice on education law. She can be reached at mgreulich@walterhav.com or at 614-246-2263.

IRS Extends Tax Filing Deadline

and
March 18, 2021

March 18, 2021 

*Update: Ohio updated its tax filing deadline to May 17, 2021, however first quarter estimated income tax payments for tax year 2021 are not impacted and must still be made by April 15, 2021.

The Internal Revenue Service (IRS) is delaying this year’s deadline to file individual federal tax returns (Form 1040). The new deadline is May 17, 2021. The extension is automatic, and individual taxpayers do not need to file any forms or contact the IRS to qualify. However, states set their own deadlines, and Ohio’s deadline remains April 15, 2021, until further guidance is issued. Despite the new IRS deadline, the IRS is urging taxpayers to consider filing as soon as possible. The agency is delayed in processing returns already filed, and by further delaying filing, taxpayers entitled to a refund may experience longer waits to receive those refunds.

Additionally, individual taxpayers (including those who pay self-employment tax) can postpone federal income tax payments for the 2020 tax year to May 17, 2021, without penalties and interest, regardless of the amount owned. Penalties, interest, and additions to tax begin to accrue on unpaid balances as of May 17th. But, estimated tax payments that are due on April 15, 2021, remain due on April 15th.

We will continue to monitor state and federal tax filing deadlines and update you if there are any further changes. If you have any questions in the meantime, please don’t hesitate to contact us here. We are happy to help.

Giulia Di Cenzo is an associate at Walter | Haverfield who focuses her practice on tax and wealth management. She can be reached at gdicenzo@walterhav.com or at 216-658-6230.

Lacie O’Daire is chair of the Tax and Wealth Management Group at Walter | Haverfield. She can be reached at lodaire@walterhav.com and at 216-928-2901.

President Signs American Rescue Plan Act: What You Need to Know

and
March 17, 2021

March 17, 2021 

On Thursday, March 11, the president signed into law the American Rescue Plan Act of 2021 (the “Act” or “ARPA”). The Act provides funding for education, COVID-19 vaccination and testing, economic injury disaster loans, restaurant grants, expanded paycheck protection program eligibility, and support for struggling live venues. The Act also provides financial assistance for individuals, such as additional direct payments, extended pandemic-related unemployment benefits, and enhancements to refundable tax credits like the Child Tax Credit and the Earned Income Tax Credit designed to help low-income Americans.

Provisions for Small Businesses

Targeted Economic Injury Disaster Loan Advance

The CARES Act, passed in March 2020, included grants of $10,000 to small businesses that were treated as advances on Economic Injury Disaster Loans (“EIDL”) and did not have to be paid back. The Act provides an additional $15 billion for the EIDL grant program to ensure that all eligible businesses can access the $10,000 grants. Businesses are eligible if they are located in low-income communities and previously received an EIDL grant for less than $10,000 or applied but received no funds due to lack of available program funding.

The Small Business Administration will disburse any funds remaining after all eligible businesses have claimed the $10,000 grants as supplemental grants to severely impacted small businesses that have (1) suffered a revenue loss of at least 50 percent; (2) are located in a low-income census tract; and (3) have 10 or fewer employees.

Restaurant Grants

The Act provides $25 billion for a new program at the Small Business Administration that offers assistance to restaurants. Five billion dollars of funding is set aside for businesses with less than $500,000 in 2019 annual revenue.

The grants are available for up to $10 million per entity, with a limitation of $5 million per physical location. Entities are limited to 20 locations. The grants are calculated by subtracting 2020 revenue from 2019 revenue. During the first 21 days, applications from restaurants owned and operated controlled by women, veterans, or socially and economically disadvantaged individuals will receive priority. The grants may be used for a wide variety of expenses, including payroll, mortgage, rent, utilities, supplies, food and beverage expenses, paid sick leave, and operational expenses.

Expanded Paycheck Protection Program Eligibility

The Act expands eligibility for initial and second-draw Paycheck Protection Program loans to additional non-profits listed in Section 501(c) of the Internal Revenue Code, except for 501(c)(4) organizations, as long as the non-profit meets restrictions on lobbying activities. Larger non-profits are eligible for Paycheck Protection Program loans based on employee headcounts per physical location of the organization, rather than a headcount of all employees throughout the entire organization.

In addition, the Act makes internet-only news and periodical publishers eligible for Paycheck Protection Program loans as long as the publisher has more than one physical location, fewer than 500 employees per physical location, and certifies that the loan will support locally-focused or emergency information.

Support for Struggling Live Venues

The Small Business Administration’s Office of Disaster Assistance administers the Shuttered Venue Operations Grant program, that provides grants to struggling live venue operators equal to the lesser of 45 percent of the venue operator’s gross earned revenue or $10 million. The Act provides an additional $1.25 billion for the program, including funding set aside for technical assistance to help entities apply for grants.

Provisions for Individuals

Unemployment Exclusion

The Act includes a partial exclusion from gross income for unemployment payments received in 2020. Under the Act, taxpayers can exclude up to $10,200 of unemployment payments they received if their adjusted gross income is below $150,000. If the taxpayer’s adjusted gross income is $150,000 or more, then the exclusion does not apply and gross income includes all unemployment payments made to the taxpayer.

Direct Payments to Individuals

In addition, the Act creates a refundable tax credit of $1,400 ($2,800 for joint filers) plus $1,400 per dependent. The credit phases out for taxpayers with adjusted gross income above $75,000 (above $150,000 for joint filers; above $112,500 for head of household filers). Advance payments of the credit will be made as rapidly as possible.

Mike Sorice is an associate in the Columbus, Ohio office of Walter | Haverfield. He assists closely-held businesses with business succession planningmergers and acquisitions, and tax planning. Mike can be reached at 614-246-2262 or msorice@walterhav.com.

Tim Jochim is a partner in the Columbus, Ohio office of Walter | Haverfield and a national authority on business succession and employee stock ownership plans (ESOPs). Tim can be reached at tjochim@walterhav.com or at 614-246-2152.