In light of the legislative changes taking place in response to COVID-19, ConnectYourCare recently hosted a webinar to give a detailed overview of what employers need to know about benefits administration in this critical time. Our expert speakers Barbara Boudreau, EVP of Strategic Development, and Jon Kolean, Executive Leader of Client Success, provided their insights into the changes affecting benefits and offered other ways for employers to support workers during the coronavirus crisis.
If you missed the webinar or need a recap, this is a summary of all the key information you need to help your employees and answer any tough questions you may be getting about benefits at this time. We also include some great resources for a deeper dive into certain aspects of these benefits programs and the surrounding legislation if you want more information.
The CARES Act
The Coronavirus Aid, Relief, and Economic Stimulus (CARES) Act makes more than 20,000 health care products more accessible for participants who have a flexible spending account (FSA), health savings account (HSA), or health reimbursement arrangement (HRA). It also allows telehealth services to be covered pre-deductible. The main aspects of the CARES Act employers should know include:
The IRS released guidance on March 11, 2020, clarifying that testing and treatment of COVID-19 is considered preventive care and may be covered pre-deductible by HDHPs. These additional expenses for testing and treatment will not affect HSA eligibility, which allows participants to focus their HSA funds on other essentials during this time of heightened medical concern. For more details relating to COVID-19, check our Coronavirus Resource Center.
Tax-Filing Date Extension
The IRS has extended the federal 2019 tax-filing deadline to July 15, 2020, and many states have also provided an extension as well. This gives employers more time to file paperwork, allows employees to maximize their HSA contributions for the 2019 plan year, and helps employees in a furlough situation to make contributions. (For ConnectYourCare clients: employees can submit a form online through the myCYC® app and portal to add HSA contributions for the 2019 plan deadline. Participants are always welcome to contact the CYC customer support team for assistance.) You can learn more about HSA filing rules in our HSA tax tips blog.
Section 139 Relief
During a time of widespread disaster, employers may provide payments to employees for certain personal expenses as qualified disaster-relief payments that are free from payroll and income tax under Section 139 of the IRS Disaster Relief Payments tax law. The Section 139 crisis relief payments code was added after 9/11 and is typically used as a way for employers to provide extra support to employees during natural disasters. Your tax and legal counsel can assist you with determining if your program will qualify for this specific tax exemption.
Other Ways to Support Employees During the COVID-19 Pandemic
In addition to the legislative changes for COVID-19 that impact employee benefits administration, these are other great ways for employers to offer support during the crisis.
Current regulatory updates have allowed for more coverage from health care and other pre-tax accounts. When turbulent times occur, you want to be there for your employees to help them cover unexpected costs associated with changes to their everyday work and family routines. Organizations can empower and bring comfort to employees with consistent plan updates and information on plan features. The flexibility of tax-advantaged health care plans with built-in adjustments for life events should be embraced.
If you have further questions regarding the COVID-19 impact on pre-tax accounts and other ConnectYourCare solutions, don’t forget to visit our COVID-19 resources page.