Benefit News
COVID-19 Relief Efforts In Full Force
March 30, 2020
- President signs CARES Act into law
- DOL updates FFCRA Q&As and releases model poster
- IRS sets effective date for employment tax credits and extends 2019 deadline for HSA contributions
The end of last week brought a flurry of federal legislative and regulatory activity to address the financial impact of the novel coronavirus (COVID-19) on U.S. employers, culminating with the passage and signing into law of a $2.2 trillion economic stimulus package, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), on March 27, 2020. In addition, the Department of Labor (DOL) and the Internal Revenue Service (IRS) also released guidance to assist employers in implementing certain benefit related provisions under the Families First Coronavirus Response Act (FFCRA).
CARES Act
The CARES Act is a piece of legislation containing a combination of tax provisions and other stimulus measures designed to provide help to American families and businesses, as well as health care workers on the front lines of the COVID-19 outbreak. The following is a summary of key provisions impacting employee benefit plans:
- Over the counter (OTC) drugs and medicines are now once again eligible for reimbursement from a health savings account (HSA), health care flexible spending account (FSA) or health reimbursement account (HRA), reversing an Affordable Care Act requirement. In addition, menstrual products are now considered medical expenses and eligible for reimbursement from an HSA, FSA or HRA.
- Telehealth services may be covered pre-deductible under a high deductible health plan (HDHP), without affecting the HDHP’s compatibility with HSA rules. As a result, most fully insured carriers will not be charging for telehealth services regardless of the type of service being rendered. Self-funded plans should determine if they want to extend first dollar coverage for telehealth services as well. This provision applies to all plan years that begin on or before December 31, 2021.
- The types of coronavirus testing that all comprehensive private health insurance plans must cover without cost-sharing or barriers under the FFCRA has been expanded.
- The new law accelerates the process that would make permanent the requirement for health plans to cover preventive services and vaccines related to COVID-19.
- In addition, the CARES Act makes clarifications to the FFCRA with respect to its expanded Family and Medical Leave (FMLA) and paid sick leave provisions. The DOL confirmed that an employer is only obligated to pay employees up to a cap of $200 per day/$10,000 in total pertaining to the expansion of the FMLA, up to a cap of $511 per day ($5,110 total) per employee for paid sick leave, and up to $200 per day/$2,000 in total per employee for leave related to taking care of a child or an individual quarantined as a result of COVID-19.
Additional FFCRA Guidance
The DOL has updated its Questions & Answers regarding the paid sick and FMLA expansion leaves under the FFCRA, and issued a model notice of employee rights (Notice) for employers to post by April 1, 2020, along with Questions & Answers for distributing the poster. The Notice is available here, and Questions & Answers related to providing of the Notice are available here.
Please note that the Notice contains confusing information regarding the total length of time available under the FFCRA’s paid sick leave provisions. If the current model is updated, we will forward an updated version as soon as possible. Please also refer to our website at burnhambenefits.com/covid-19 for the latest information.
In addition, the IRS released Notice 2020-58, extending the deadline for individuals to file their taxes without incurring a penalty or interest, from April 15, 2020 until July 15, 2020. Accordingly, the IRS has also extended its deadline for individuals to make 2019 contributions to their HSAs until July 15.
Furthermore, in Notice 2020- 21, the IRS established that the time period in which the tax credits available under the FFCRA apply to qualified paid sick leave wages and qualified family leave wages paid from April 1, 2020 – December 31, 2020.
More Information
For further information regarding the CARES Act and FFCRA, and the most up-to-date information on COVID-19, please visit our dedicated website at burnhambenefits.com/covid-19.
For additional information, please contact your Burnham Benefits Consultant or Burnham Benefits at 949-833-2983 or inquiries@burnhambenefits.com.
Burnham Benefits does not engage in the practice of law and this publication should not be construed as the providing of legal advice or a legal opinion of any kind. The consulting advice we provide is intended solely to assist in assessing its compliance with the Patient Protection and Affordable Care Act and other applicable federal and state law requirements, and is based on Burnham Benefit’s interpretation of federal guidance in effect as of the date of this publication. To the best of our knowledge, the information provided herein, and assumptions relied on, are reasonable and accurate as of the date of this publication. Furthermore, to ensure compliance with IRS Circular 230, any tax advice contained in this publication is not intended to be used, and cannot be used, for purposes of (i) avoiding penalties imposed under the United States Internal Revenue Code or (ii) promoting, marketing or recommending to another person any tax-related matter.