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CARES Act and Employee Benefits Legislation to Date

03/30/2020

On March 27, 2020 President Trump signed the CARES Act into law. The full text of the statute is linked below. 

In the coming days and weeks, we expect significant clarifications from the IRS, DOL, and other regulatory bodies.

This post is meant to provide highlights of the law with respect to employee benefits and how it builds upon previous legislation and directives.

Employee Protection

Families First Coronavirus Response Act (FFCRA)

  • Emergency FMLA and emergency paid sick leave.

Coronavirus Aid, Relief, and Economic Security (CARES) Act

  • “Rebates” in the form of one-time cash payments to Americans in the amount of $1,200 single, $2,400 married, $500 child. The amount of rebate is phased out after certain income thresholds. Eligible income before phase out is $150,000 for joint tax returns, $112,500 head of household, and $75,000 single and other.
  • Pandemic unemployment insurance: $600 per unemployed worker per week with an extra thirteen weeks for workers after state unemployment ends.
  • “Short-Time” compensation program for workers with reduced hours.

State of Ohio HB 197: effective March 25, 2020.

  • Codifies Executive Order 2020-03D: Lifting Certain Unemployment Compensation Benefit Restrictions During an Emergency.
  • Extends Ohio tax filing to July 15th to align with federal changes.

Health Plan Design to Enhance Access

Families First Coronavirus Response Act (FFCRA)

  • Group health plans must waive cost sharing for COVID-19 testing and related services.
  • Health Savings Account Funds (HSA) can be used to purchase Over the Counter Drugs (previously not allowed).

Coronavirus Aid, Relief, and Economic Security (CARES) Act

  • Reaffirms cost sharing and testing provisions under FFCRA.

IRS Notice 2020-15

  • High Deductible Health Plans (HDHP) coupled with a Health Savings Account (HSA) are allowed to cover testing and treatment of COVID-19 claims so that these costs are NOT subject to deductible.

Health Insurance Premium Financing

Coronavirus Aid, Relief, and Economic Security (CARES) Act

  • Paycheck Protection Program provides loans targeted to employers with not more than 500 employees (exceptions made for employers with a NAICS Code beginning in 72 – Accommodation and Food Service). These loans have a maximum duration of ten years at an interest rate not to exceed 4%. Initial loan payments can be deferred and in some cases forgiven. Loans can be used to cover payroll, mortgages, rent, and utilities. Premiums for health care coverage qualify under the program.

Ohio Department of Insurance Bulletin 2020-3 released March 20, 2020

  • Requires premium deferral options for insured health plans, temporarily waives actively at work requirements, and modifies COBRA continuation employment thresholds.

Ohio Bureau of Workers’ Compensation Relief

Updated March 29, 2020

  • Available deferral of insurance premiums to June 1.
  • COVID-19 claims generally do not qualify for workers compensation with potential exceptions.

Tax Incentives and Adjustments

Coronavirus Aid, Relief, and Economic Security (CARES) Act 

  • Up to $100,000 in retirement plan distributions allowed without tax penalty for those impacted by COVID-19. Taxes on distribution paid over three years.
  • Employers are permitted to pay off a portion of student loans for an employee before January 1, 2021 and the employee will not have to report this pay off as income.
  • Federal tax return filings delayed until July 15th.

 

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