Helping Businesses Plan, Prepare & Respond to COVID-19
As a provider of Human Resources and accounting services, XMI is uniquely positioned to support our clients and the broader business community as the COVID-19 situation develops. We will continue to add resources to this page and update COVID-19 guidance throughout the duration of this crisis. Please check back often.
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Downloadable Templates & Guides
As the XMI team walks our clients through this difficult time, we will update this FAQ with the most common questions we are answering.
COVID-19 Work Protocols
How do I determine when our employees should return to work in the office versus asking folks to work from home and/or furloughing until we can get back to business “as usual?”
For many businesses in various locations, the path back to business as usual isn’t a straight line from stay at home to full capacity. With state and local guidance and regulations in flux, you may feel like you are taking two steps forward and three steps back on repeat. Here’s how to make sure you are making the best decision for your business right now.
- Stay current on federal, state and local regulations.
- Familiarize yourself with OSHA, DOL, and CDC guidance, and watch for updates. Read this article to learn more about compliance considerations for reopening your business.
- Communicate changes with your team as often as needed. Communication is critical to ensuring that employees are aware of and comply with company policies.
What if our business is in a location that is under a stay at home order? Who can go into the office, if anyone? And what do I need to provide these employees to protect them from recourse?
Under stay at home orders, businesses can designate workers as essential, meaning unable to perform their duties remotely. State and local guidance may allow those employees to go into the office or workplace. However, employers must monitor onsite headcount and stay under the maximum number allowed for indoor gathering. In addition, essential workers must abide by other social distancing rules established for your location.
Current best practice is to provide employees a letter with your logo/letterhead that names them as essential. Customize our template here.
It’s time for our employees to return to the office. What do I need to consider as I develop a return to work plan?
Start by reviewing XMI’s Return to Work Checklist for Employers.
We recommend that you survey employees to get their input on returning to work in a traditional setting via a survey that is opt-in, but not anonymous. You may need to personalize your return to work plan for certain employees, so tying names with feedback is critical. You can start with our Return to Work Employee Survey Template and customize as needed for your team and needs.
Also check out XMI’s Return to Work Action Plan Template as a starting point for developing your own plan.
And communicate the plan to employees. You really can’t overcommunicate. Take a look at XMI’s COVID-19 Employee Communication Template, COVID-19 Remote Work Protocol Template, and COVID-19 Action Plan Q&A Template as examples.
For many businesses, it makes sense to plan for multiple scenarios with some employees working from home, some in the office and others on furlough. The number of employees and roles may vary based on state and local guidance and other restricting factors. Name these scenarios and share the high-level details for each as part of your employee communication. This way, when the rules change, you can simply pivot from one scenario to another and employees will understand the ramifications.
For more guidance, read this article on return to work considerations.
I’m not sure we will return to the office in the foreseeable future. What do I need to do to make sure my employees stay on track while remote?
Start by looking at your employee handbook. If you already had a remote work policy for some employees, you can expand and update this policy include all employees. You may need to start from scratch with a Remote Work Policy. This sample protocol can help. Remember that policies can be temporary due to the pandemic. Make this clear to your employees.
As part of our plan for returning to the office, we want to enforce daily temperature checks. What do we need to know before we implement this practice?
Employers can conduct mandatory temperature checks daily to support a safe work environment. If implemented, enforce for all employees, not just a few. If an employee exhibits signs of COVID-19, such as an elevated temperature, employers should send them home immediately and abide by the CDC guidelines regarding self-quarantine. Additional guidelines as issued by the EEOC can be found at EEOC: What You Should Know About COVID-19 and the ADA, the Rehabilitation Act, and other EEO Laws
We are considering asking employees who work onsite to provide health information daily. Any best practices?
Yes, you can have employees complete a health and safety form and self-report their temperature rather than having a dedicated employee scanning employees as they enter the premises each day. You can automate health and safety forms and integrate with your time-clock system, if applicable.
Exercise caution over how health and safety forms are stored (HIPPA) and handled (germs). If you chose to use an app for this process, take time to understand HIPPA compliance and other data privacy protections. And make sure that procedures aren’t discriminatory – be consistent across locations, roles, and teams. Read XMI’s blog COVID-19: Compliance Considerations for Reopening Your Business to learn more.
Are employees required to notify their employer if they test positive for COVID-19?
Yes. Employees should notify their employer so that the employer can implement measures to protect other employees such as deep cleaning and employee testing.
Employers must be consistent when asking employees about symptoms and/or test results. If you ask one employee, you must ask all.
Document expectations in your employee communications. Let employees know whom to notify in the event of a positive test and what information will be shared with some or all other employees. And finally, include your requirements for returning to work after testing positive for COVID-19.
Are employees required to notify their employer if a member of the employee’s household tests positive for COVID-19?
Yes. Employees should notify their employer so that the employer can implement measures to protect other employees such as deep cleaning and employee testing.
Employers must be consistent when asking employees COVID-19 exposure.
Document expectations in your employee communications. Let employees know whom to notify in the event of a positive test and subsequent isolation. And share your expectations for when the employee can return to work after having been around a person with COVID-19.
Should we send an employee home if they have symptoms?
Yes. Any employee exhibiting any COVID-19 symptoms as outlined by the CDC should be sent home immediately.
Create awareness of COVID-19 symptoms by posting signage around your workplace.
If you implement a system of self-reporting, such as a daily health and safety check, include instructions for employees to follow if they are symptomatic; such as, if you answered “yes” to any of the above, please go home immediately. Once you are home, please contact your supervisor…”
Can we require an employee who tested positive for COVID-19 to provide a negative test to end home isolation and return to work?
You can, but this may not be practical given the delays in test results. A better practice would be to follow the CDC symptom-based criteria for return to work. Avoid giving medical advice. Rather encourage employees to consult with their health care provider before returning to work.
How do we avoid violating HIPPA during the pandemic?
When public health emergencies are declared, the Department of Health and Human Services may choose to waive certain sanctions and penalties for noncompliance with specific provisions of the HIPAA Privacy Rule. Secretary Azar has announced that, effective March 15, 2020, a limited HIPAA waiver has is in place covering the following provisions of the HIPAA Privacy Rule:
- The requirements to obtain a patient’s agreement to speak with family members or friends involved in the patient’s care – 45 CFR 164.510(b),
- The requirement to honor a request to opt out of the facility directory – 45 CFR 164.510(a),
- The requirement to distribute a notice of privacy practices – 45 CFR 164.520,
- The patient’s right to request privacy restrictions – 45 CFR 164.522(a),
- The patient’s right to request confidential communications – 45 CFR 164.522(b).
For additional information please refer to the attached link to review the specifics as outlined by the Department of Health and Human Services.
Read XMI’s blog COVID-19: Compliance Considerations for Reopening Your Business to learn more.
How do we avoid COVID-19 OSHA violations?
Employers should take every precaution to ensure their return to work plan complies with OSHA standards. Employers should develop and document measures they are taking to reduce the coronavirus spread in the workplace. This may include changes to personal protective equipment, sanitation policies, physical work environments, workplace separation, travel restrictions, and remote work policies. Read XMI’s blog COVID-19: Compliance Considerations for Reopening Your Business to learn more.
Under OSHA’s recordkeeping requirements, COVID-19 is a recordable illness. Read more about the criteria for recording COVID-19 cases and OSHA’s enforcement discretion here.
Are we at risk for a COVID-19 related workers’ compensation claim?
Normally a communicable disease that could be contracted during the ordinary course of life is excluded from workers’ compensation coverage. But several states are amending laws around this issue for COVID-19. For guidance on properly coding claims to avoid impact on your experience rating, read this article. And as you evaluate your workers’ compensation, talk to your advisor about how your remote workers may impact coverage.
What is the difference between a furlough and layoff? What’s a reduction in force? Are these all the same thing, and if not, what are the big differences?
- During a furlough, employees remain on the employer’s payroll, but their hours of work or salary are reduced.
- A layoff is a temporary separation from payroll.
- A reduction in force (RIP) occurs when an employee’s position has been eliminated.
These terms are often used interchangeably, and it’s important to understand the uses and implications of each type of employee exit. For more information, check out XMI’s COVID-19 Guide to Employee Exits here.
Can we reduce our workforce by eliminating positions?
Yes. Employers can adjust their workforce as needed to ensure viability of the company. Depending upon the number of positions impacted compared to the total workforce and other factors, the WARN act may apply.
Can we reduce our workforce by reducing hours or days for employees?
Yes. Employers can utilize furloughs as an alternative to layoffs. Furloughs can be implemented through reduced hours, days, and/or reduced salaries. Read XMI’s COVID-19 Guide to Employee Exits here.
Can we extend the layoff period beyond what was originally communicated to impacted employees?
Yes. Employers can determine the length of time for any layoff as business needs dictate.
What if the layoff is no longer temporary, and we have no plans to reinstate the employee(s)?
Layoffs are generally intended to be temporary with employees recalled at some future date. However, this is at the discretion of the employer. At any point, the employer can transition from layoff to reduction in force, a permanent termination.
Can we make temporary salary adjustments for the whole company, select employees, or a group of employees in the same role?
Yes. Salary adjustments can be made across the board or for a specific group of employees, such as senior leadership. The key is to be consistent across employee class. For example, you can’t adjust salaries for seven out of ten employees in the same role or doing the exact same work.
Be aware that employers with a union contract or a collective bargaining agreement in place will need to defer to any guidelines regarding wages or other conditions of employment before implementing salary adjustments.
Can we suspend commission payments?
Yes. Commission payments can be suspended on a go-forward basis. It is critical that employers are fair and consistent across the targeted group of employees.
What documents does the employer need to provide for a furlough?
Employers currently do not have to provide employees with written documentation related to a furlough. Of course, employers would need to verbally communicate changes to all employees impacted.
Can we suspend commission payments?
Must employers implement pay reductions and/or furloughs companywide?
Pay reductions or furloughs do not have to be companywide. The key is to ensure a fair and consistent selection process for when and how to implement a furlough, layoff or reduction in force.
Are we obligated to pay hourly or salaried employees if our business shuts down?
Federal law mandates that employers must pay non-exempt hourly employees only for hours worked. Unless you have a contract or corporate policy which states differently, these employees are not entitled to be paid during a company shutdown. Exempt and non-exempt salaried employees must be paid their full salaries for any day in which they perform work (including remote work). If they are not working during the shutdown, salaried employees do not have to be paid.
Are we required to provide back pay after a furlough has ended?
No. Employers are not required to provide any form of back pay as part of a furlough, layoff or other related salary and/or works hours reduction.
What if I was planning to term an employee before the COVID-19 situation arose? Can I still proceed with this termination?
Employers should proceed with business as usual for addressing poor performance issues, which should include discussions (documented, if appropriate) addressing performance concerns. If the performance issue was poor attendance prior to COVID-19, and the employee is now missing work due to COVID-19, employers should proceed with caution regarding termination. Employers are not required to keep poor performers and should contact their HR team for support to navigate next steps if termination is warranted.
Do we have to continue to pay severance to employees who have already signed their releases?
Yes. If you previously executed a severance agreement and you are making payments to individuals as a result of that severance, you must continue to provide those payments until the obligations in the severance agreement have been met.
Are my employees eligible for unemployment if I am not terminating them?
Yes. Employees who are working reduced hours due to a furlough can apply for partial unemployment.
Can you explain recent legislation's impact on paid and unpaid leave for furloughed employees?
Employees that are impacted by a furlough (reduction in work hours, reduction in pay rate, not working for a certain period of time) can apply for unemployment benefits. The process to apply varies by state.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act Federal Pandemic Unemployment Compensation provided significantly enhanced unemployment benefits and expanded eligibility to include individuals who are self-employed, independent contractors and freelancers. These benefits expired on July 31, 2020.
What if some employees who are currently receiving jobless benefits refuse our return to work offer?
Many states are now requiring employers to report “quits or work refusals” to the state via varying reporting mechanisms. Check the guidance for the employee’s state of residence. Good record keeping is increasingly important as unemployment claims will lag behind the refusal to work/termination.
Paid Time Off/Sick Pay/Leave
How does the Families First Coronavirus Response Act (FFCRA) impact employee paid sick leave paid family and medical leave?
On Sept. 16, 2020, the DOL issued revisions to both types of emergency paid leave created and established under the FFCRA. These rules, which clarify the work availability requirement, intermittent leave approvals and required documents, can be read here. One important change is that employees should provide reasonable notice to employers, or in other words, provide notice as soon as practicable under the facts and circumstances of the particular case. Previously employees were required to provide advance documentation.
I understand that the employer is reimbursed for part or all of wages paid for FFCRA expanded leave. How will employers be reimbursed for payments to employees for Emergency Sick Pay Leave or Expanded FMLA?
Under the revised guidelines dated Sept. 16, 2020, the work availability requirement was clarified. This guidance states that the employee is not eligible to receive paid leave if there is no work available, and if the employer choses to pay the employee, these wages aren’t reimbursable. However, there must be a legitimate business reason for the work being unavailable.
What is intermittent leave?
Intermittent leave under the FFCRA allows employees to take up to 10 weeks of paid leave (at 2/3 of their regular pay rate) in partial-day increments. Intermittent leave is leave taken in separate blocks of time due to a single qualifying reason. Read more here.
Employers who wish to deny a request for intermittent leave should do so with caution based on the revisions. Intermittent leave rules differ for in person versus teleworkers and based on specific child care situations.
Are there best practices for tracking FFCRA leave requests?
While certain forms aren’t required to date, employers will benefit from solid documentation. We suggest asking employees to submit requests via email to a dedicated inbox or using a standard form to ensure that employers gather key details. You can download and customize XMI’s sample Emergency FMLA-Employee Leave Request Form here.
XMI clients, please use the XMI Client Specific Emergency Leave Request Form.
We are planning a staggered reopening and anticipate employee requests for sick leave or FMLA leave under the expanded provisions. Please clarify the guidelines again to be sure we can properly address these requests.
If employees are feeling ill or caring for a child, they may be eligible for the 10 days of sick leave under the FFCRA. If they are unable to return to work (even remotely) due to childcare, they may qualify for the extended FMLA. In cases where childcare is the key issue, employers may need to consider remote work options if possible.
Should we allow employees who chose not to come work to use their accrued Paid Time Off (PTO), vacation, and sick time?
Yes, dependent upon what your current policies state. However, if the employee chooses not to report to work as a direct result of self-quarantine or other concerns related to COVID-19, best practice is the employee should be allowed to utilize their time regardless of the company’s policies.
What do we do when an employee has fully utilized FFCRA expanded leave as well as PTO, vacation and sick pay yet the employee still won’t come to work?
If an employee refuses to return to work and work is available, you can inactivate the employee and let the employee know that they can reapply for the position in the future. As this is considered a “work refusal,” the employee is ineligible for jobless benefits.
Are there any labor requirements that state that employees can only take PTO in specific increments?
No. There are not any specific requirements related to the increments of PTO that an employee may take. Company policies usually outline PTO usage and how employees may request time and in what increments, if any.
Many of our employees were unable to take planned vacations and are concerned that they will have excess PTO at year-end. Can we increase the amount of PTO carry-over without increasing the amount eligible for payout if an employee exits?
Yes. Employers can revise their PTO/vacation carry over policies without having to increase the amount of PTO paid out at termination. Employers may also want to consider this revision as temporary (carryover increase for 2021 only). If the revision is permanent, employers should update their employee handbooks accordingly.
Paycheck Protection Program
What is the Paycheck Protection Program?
The Coronavirus Aid, Relief, and Economic Security (CARES) Act Small Business Administration (SBA) Paycheck Protection Program (PPP) offers federally guaranteed loans through SBA-certified lenders. PPP loans have an interest rate of 1% with payments deferred for six months and no collateral or personal guarantees required.
The PPP was designed to incentivize and enable employers to keep employees on the payroll. Loan forgiveness is tied to headcount and good record keeping is a must. The PPP Forgiveness Act; which was enacted in June 2020, modified many provisions of the original law.
To learn more about the PPP and see current statistics on funding tranches and funds borrowed to date, check out the SBA’s robust library of PPP documents and reports. You can also watch this video featuring Pat Cleary, President & CEO of the National Association of Professional Employer Organizations.
I understand that PPP loans have onerous reporting requirements. What do I need to do?
If you plan to apply for forgiveness for all or part of your PPP loan, you need to keep up with employee headcount and document every disbursement of PPP funds. Download XMI’s PPP Expense Tracker, a simple tool designed to align with current loan forgiveness requirements, and read more about tracking PPP expenses here.
What can you tell me about PPP loan forgiveness?
The Small Business Administration, in conjunction with the Treasury, released a revised PPP Forgiveness Application on June 16, 2020. The revised application aligns with the sweeping changes created by the Paycheck Protection Flexibility Act.
Notable changes in the act are:
- Extended the “covered period” for eligible expenses from 8 weeks to 24 weeks
- Reduced the portion required to be spent on payroll costs from 75% to 60%
- Established safe harbor provisions for businesses that have been unable to return to pre COVID-19 business levels due to compliance with health and safety guidelines
Additionally, the SBA released a new EZ application for borrowers that meet at least one of the three following conditions:
- Are self-employed and had no employees at the time of the PPP loan application
- Did not reduce salaries or wages of any employee by more than 25% AND did not reduce the number of employees or average paid hours of employees
- Experienced a drop in business activity during the “covered period” due to compliance with health directives AND did not reduce salaries or wages of any employee by more than 25%.
Does headcount retention impact loan forgiveness under the Paycheck Protection Program?
Yes, headcount is a factor in loan forgiveness. The U.S. Chamber of Commerce Coronavirus Small Business Guide and Checklist includes a helpful explanation and example calculation.
What if I've already laid off some of my staff? Will my loan be forgiven?
In order to get full loan forgiveness, companies need to maintain pre-crisis levels of full-time employees. According to the PPP Flexibility Act, businesses have until December 31, 2020, or the end of the 24-week period, whichever is sooner to restore FTE headcount and wages.
The PPP Flexibility creates a new safe harbor provision for borrowers who are unable to rehire to employees or resume pre-pandemic business activity. Borrowers must document their inability to hire the same or similarly qualified employees AND their inability to return to the same level of business activity from before February 15, 2020 due to compliance with the CDC or other official guidance.
Our PPP funds are exhausted. Can we go ahead and apply for forgiveness?
The SBA PPP forgiveness portal opened in early Aug. 2020. However, the forgiveness process is moving slowly and a simplified forgiveness process for loans under $150,000 is stalled. Your specific lender should be updating you regularly on their timeline and process. As you navigate forgiveness with your lender, also include your CPA or tax preparer in the conversation.
I have employees who refused our offer of rehire. How will this impact our PPP forgiveness application, specifically as it relates to headcount thresholds?
Include employees who refused your offer of hire in your current headcount figures, and keep a separate detailed list of employee names, along with communication evidencing offer made and rejected received. Use the same process for employees that were terminated with cause.
Are expenses related to buying personal protective equipment and retrofitting the office for social distancing PPP forgivable expenses?
Currently these expenses aren’t allowed as part of the forgiveness application. Speak with your CPA or tax preparer for additional guidance.
Payroll and Payroll Tax Credits
What payroll tax was recently deferred by the president and is this deferral optional?
In early August, the president issued a memorandum enabling organizations to defer payment of the employee portion of the 6.2% OASDI tax for eligible employees for the period Sept. 1 through Dec. 31 2020. Deferral is optional at the discretion of the employer. Deferred payroll taxes are due by April 30, 2021, meaning that employees who recognize the benefit of increased take-home pay in 2020 will experience an equal detriment in the first four months of 2021. Equally concerning is the administrative and tax liability to employers. Read this article written by XMI’s CFO, Josh Farber, to learn more.
What temporary payroll tax credits were created due to COVID-19?
The CARES Act includes an Employee Retention Tax Credit and the FFCRA legislates tax credits for expanded FMLA and emergency sick leave.
What is the Employee Retention Tax Credit? Is this the same as the FFCRA tax credits?
No, these are distinct. The employee retention tax credit under the CARES Act is a fully refundable tax credit for employers equal to 50% of qualified wages (including allocable qualified health plan expenses) that eligible employers pay their employees. Read more about the employee retention tax credit here. See the IRS Guidance for Form 7200 for more information.
Under the FFCRA, employers are eligible for tax credits for qualifying wages paid under the FFCRA between April 1, 2020 and December 31, 2020. Read more about the FFCRA here.
Can I get the FFCRA expanded leave tax credit and take advantage of the SBA Paycheck Protection Program?
Yes. Employers can participate in both programs. The PPP Loan Forgiveness provisions are separate and unrelated to the FFCRA tax credits for paid sick leave and expanded FMLA.
Can I benefit from the Employee Retention Tax Credit and get an SBA Paycheck Protection Program forgivable loan?
No. An eligible employer may not receive the Employee Retention Credit if the eligible employer receives a Small Business Interruption Loan under the CARES Act Paycheck Protection Program.
Can I claim the same wages for payroll tax credit under the FFCRA and an Employee Retention tax credit?
Employers can qualify for both benefits but not for the same wages. The amount of qualified wages for which an Eligible Employer may claim the Employee Retention Credit does not include the amount of qualified sick and family leave wages for which the employer received tax credits under the FFCRA. Read more about these tax credits and good record keeping here.
What is the 6.2% deferral of employer payroll taxes under the CARES Act?
Under the CARES Act, employers can defer the deposit of the employer portion of Social Security taxes (6.2 percent of wages) for payrolls processed from March 27, 2020 through December 31, 2020. Instead of making these payments on a next-day or semi-weekly basis, the deposit dates are moved to 50% of accrued Social Security payment due on December 31, 2021 and the remaining 50% due on December 31, 2022.
If our business receives a PPP loan, can we take the 6.2% deferral?
Employers who receive a Paycheck Protection Program (PPP) loan are eligible for the CARES Act tax deferral. Previous restrictions, which required employers to stop the deferral on the date of the forgiveness decision, were removed by the PPP Flexibility Act. Borrowers can defer payroll taxes through December 31, 2020.
How can I get a refund on the 6.2% our business paid since 3/27/20, prior to our adoption of the deferral?
This is a developing topic without clear guidance, but the general interpretation around the industry is that yes, money paid in before the deferral was elected will be eligible for a refund after the Q2 filing process is completed. Stay tuned for additional guidance as we receive it from the IRS.
We still use paper checks for some of our employees. What are best practices for paying these employees while we are working remotely?
There is no time like the present to move employees to direct deposit. A second solution is using pay cards and mailing to the employee’s address.
1. Direct Deposit – if employees are on direct deposit, they will continue to receive their deposits as usual.
2. Live check – if your employees still receive a live check, pay cards are available and can be mailed to employee home addresses to ensure timely payments. If you or the employee does not want to switch to direct deposit delivery of live checks will continue if the postal service, FedEx or Courier are still in operation.
3. Pay statements – Pay statements can be accessed through the Employee Portal. They will no longer be printed and mailed to employees. Please reach out to your payroll account manager if you have any questions or email firstname.lastname@example.org.
Is testing for COVID-19 covered by employer sponsored health plans? What about the treatment for COVID-19?
Under FFCRA H.R. 6021, insurance carriers are required to fully cover the cost of COVID-19 testing with no employee cost sharing or prior authorization requirements. This provision includes including self-funded plans.
Many plans are also including treatment at no cost or not subject to the deductible. Consult revised plan documentation or speak with your insurance broker to determine how treatment is covered by your plan.
Can an employee who is diagnosed with COVID-19 file for Short Term Disability (STD) benefits?
Yes. If an employee exhausts expanded medical leave, the employee may be able to utilize available PTO/Sick leave and/or apply for STD as they would with any other illness. A physician statement must be completed stating that the employee is unable to work due to their illness and submitted to the carrier for approval.
Employees should also refer to their employee handbook for specific policies related to leave and use of available PTO and sick leave.
If we reduce employee hours and/or wages, how will benefits be impacted? Will the employee lose eligibility? And what if the employee’s wages can’t cover the employee contribution?
Whether employee benefits are provided during furloughs will depend on the terms of each plan. In many cases, employees must work a specific number of hours to remain eligible for benefits. If that condition is met, benefits continue “as is.”
During the COVID-19 pandemic, some insurance carriers and state regulators are providing additional flexibility to help employers maintain coverage for employees on furlough.
Read XMI’s COVID-19 Guide to Employee Exits for more information about employee benefits during furlough and specific guidance on employee contributions.
In the event of a COVID-19 layoff or reduction in force, will employees be able to apply for COBRA?
Yes. Covered employees will be eligible for COBRA and/or state continuation upon termination. However, if the group plan ends, COBRA and/or state continuation benefits would no longer be available.
Are employee benefit eligibility deadlines relaxed due to COVID-19?
Yes. New guidance has provided relief for both employers and individuals by allowing additional time to satisfy certain benefit deadlines; such as electing employer coverage for a Qualified Life Event (i.e. marriage, new child, loss of other coverage), making COBRA elections and paying COBRA premiums. The period for relaxed timeframes began on March 1, 2020 and ends 60 days after the conclusion of the National Public Health Emergency, currently to be determined.
Have regulations for High Deductible Health Plans changed due to COVID-19?
Yes. New IRS guidance allows High Deductible Health Plans to provide first dollar benefits for COVID-19 testing, COVID-19 treatment, and telehealth benefits prior to satisfying the deductible without jeopardizing the tax-free status of health savings accounts.
How has COVID-19 impacted Health Savings Accounts and HSA eligible expenses?
Under the CARES Act, individuals are permitted to use their HSA accounts for certain over the counter medications. This change is retroactive to January 1, 2020 and includes feminine hygiene products as eligible expenses as well. Read more here.
What changes have happened with Flexible Spending Account Section 125 Expenses?
New regulations permit Section 125 FSA plans to allow certain over the counter medications as eligible expenses. This change is retroactive to January 1, 2020 and includes feminine hygiene products as eligible expenses as well. Read more here.
Are there other regulations impacting Section 125 Plans?
IRS Notice 2020-28 provides employers the opportunity to create mid-year special enrollments for Section 125 plans. These mid-year special elections allow employees to make changes to their elected annual amounts and make new elections if they previously declined to participate. This may be particularly helpful to employees participating in Dependent Care plans that have seen expenses change due to lack of childcare related to COVID-19. Additionally, rollover expense has been increased to $550 for plans that have rollover provisions.
Can we suspend our 401(k) and stop making the 401(k)-employer match?
Yes. However, cost savings from suspending the plan will be minimal.
To stop the employer match, you must provide written notice to all employees in advance of the match stop date. For employers with safe harbor elections, notification must be given 30 days in advance of the match stopping for any groups with a safe harbor match. There are other testing consequences for employers with safe harbor elections.
I understand that the CARES Act includes a provision by which employers can make payments up to $5,250 toward an employee's student loans through the end of 2020. What do I need to do to make this happen?
The Cares act temporarily allows employers to make tax-free payments to employee’s student loans of up to $5,250. This is in addition to the $5,250 that employers can offer in pre-tax reimbursements for qualified employee education expenses including tuition and textbooks.
To start this process, you must verify that the loan is in the name of the employee and for their education. Co-signed loans don’t qualify. Establish a Section 127 with the help of your benefit provider. And set up payments as a non-taxable fringe benefit. To be fair to all employees, consider an option for employees without education debt, such as 529 education savings plan contributions.