ASE recently alerted its members about the passage of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) on March 27th.  As noted, the bill contains several measures aimed at mitigating the financial impact of the COVID-19 pandemic.  Of note for human resources professionals are some of the key provisions related to employee benefit and welfare plans.

Specifically, employers should take note of the following:

Health Plans

• The Families First Coronavirus Response Act (FFCRA) required group health plans to cover Coronavirus testing without any cost-sharing.  The CARES act now clarifies that this coverage will extend to both in and out-of-network health care providers.
  

• The CARES Act will also expedite the process by which future vaccines for the Coronavirus are considered a preventative service.  When classified as such, group health plans and health insurance issuers offering group or individual health insurance will be required to cover any qualifying Coronavirus preventive service (i.e., a vaccine).

• The law allows a high deductible health plan to provide telehealth and remote care services without a deductible for 2020 and 2021. 

• The Act also expands the definition of Qualified Medical Expenses to include menstrual care products.  These products can now be purchased with Health Saving Accounts (HSAs), Archer medical savings accounts (Archer MSAs), or Health FSAs without loss of tax-favored status for those accounts.  These reimbursements will be retroactive to expenses incurred after December 31, 2019.

Retirement Plans

• The law temporarily loosens the rules on hardship distributions from retirement accounts, giving those affected by the crisis access to up to $100,000 of their retirement savings without a 10% penalty.  The Act defines qualified individuals as those who have been diagnosed with COVID-19 or whose spouse or dependent has been diagnosed with the illness.  It also includes individuals who have experienced adverse financial consequences as a result of:

o   Being quarantined

o   Being furloughed or laid off

o   Having work hours reduced due to such virus or disease

o   Being unable to work due to lack of childcare due to such virus or disease

o   Closing or reducing hours of a business owned or operated by the individual due to such virus or disease

o   Or other factors as determined by the Secretary of the Treasury 

It should be noted that employers may rely on an employee’s certification that they satisfy the conditions.

• The law doubles the amount 401(k) participants can take in loans from an account for the next six months to the lower of $100,000 or 100% of the account balance.  The Act also extends repayment of existing loans for qualified individuals for one year.

Tuition Benefits

• The Act expands the tax code to allow employers to pay up to $5,250 per employee towards an employee’s student loans, on a tax-free basis.  The employee can exclude the first $5,250 of such payments in 2020 from the employee’s gross income.

Additional ASE Resources
ASE COVID-19 Resources -  For more information on Coronavirus and its impact on employers, visit ASE’s Coronavirus resource page and FAQs.

CARES Act Hot Button Briefing - ASE will present a Hot Button Briefing on the CARES Act on April 3, 2020 at 11:00 a.m..  Clark Hill PLC Senior Counsel Charles Russman will provide a summary of the key provisions relating to tax credits, unemployment benefits, employment taxes, and related employee benefit provisions of the CARES Act just passed by Congress. This briefing will provide up-to-date details on many of the business stimulus programs available for organizations.  Click here to register.