Employment expert explains how FFCRA/CARES will impact employee benefits
In order to respond to the continuing COVID-19 crisis which has left millions of people out of work and the economy on the brink of disaster, health insurance and employee benefits are being temporarily revamped to mitigate these pressing concerns.
“Through provisions of the Families First Coronavirus Response Act (FFCRA) and the Coronavirus Aid, Relief and Economic Security Act (CARES Act), company benefit plans are experiencing temporary changes geared towards a more employee-friendly offering,” says Rob Wilson, employment expert and President of Employco USA, a employment solutions firm with locations across the country.
Below, Wilson outlines new changes to health insurance plans and employee benefits which have recently been implemented due to the pandemic:
Medical Plan Coverage: “UnitedHealthcare – the nation’s largest insurance company – and other large insurers are waiving cost sharing and copays for coronavirus disease 2019 (COVID-19) treatments,” says Wilson. “While each company differs in how long the waivers will be in place and what other costs will be waived, these announcements are part of a cross-country effort to help individuals access affordable care during the COVID-19 pandemic.”
HDHPs and HSAs: “This allows for telehealth and other remote care services to be covered under a high deductible health plan (HDHP) before the deductible is met, without affecting the HDHP’s compatibility with health savings accounts (HSAs),” says Wilson.
OTC Eligibility: “Over-the-counter (OTC) medications, along with menstrual care products, will be qualified as medical expenses that may be paid for using HSAs or other tax-advantaged arrangements, such as health flexible spending accounts (FSAs) or health reimbursement arrangements (HRAs),” says Wilson.
Student Loans: “Employers are allowed to reimburse employees up to $5,250 for most student loan payments with the amount excluded from taxable income. This is through an expansion of tax code Section 127, which already allowed employers to contribute, tax-free, for tuition assistance,” says Wilson. “Through the end of 2020, it becomes the combined limit for loan repayment assistance or other education-assistance payments employees receive.”
401(k) Plans: “Changes to employees’ 401(k) provisions are optional and may be adopted by the plan at the discretion of the plan sponsor/fiduciary,” says Wilson. These changes may include:
- Coronavirus related distributions are allowed penalty-free and can be repaid;
- Temporary maximum loan amounts may be increased up to $100,000;
- Loan repayment periods may be extended by one year; and
- Required minimum distributions may be suspended.
For more on this topic, please contact Rob Wilson at firstname.lastname@example.org.