Temporary Benefit Plan Changes (COVID-19)

Employco USA, Inc.

BULLETIN
April 08, 2020 (UPDATE)

COVID-19

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.

Jason Eisenhut