April 08, 2020 (UPDATE)
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.
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. 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: Allows 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).
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).
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. Through the end of 2020, it becomes the combined limit for loan repayment assistance or other education-assistance payments employees receive.
401(k) Plans: Provisions that are optional and may be adopted by the plan at the discretion of the plan sponsor/fiduciary 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.
Stay up-to-date with the latest material on our coronavirus web page – dedicated to sharing information about COVID-19 and how it relates to the workplace: https://www.employco.com/coronavirus
Please contact us if you have any questions.