Leave, furlough or layoff and benefits
The Department of Labor (DOL) Q&A page is highly recommended to find guidance on the rules for the Emergency Paid Sick Leave and Expanded Family and Medical Leave. https://www.dol.gov/agencies/whd/pandemic/ffcra-questions
The DOL posted a new update over the weekend that clarifies eligibility for the Emergency Paid Sick leave. This leave will not apply to workers that are no longer being paid due to furlough or layoff. Fisher Phillips has a summary of this DOL guidance: https://www.fisherphillips.com/resources-alerts-labor-department-throws-covid-19-curveball-in
When employees are out on a leave or furlough, they have an option to receive payment of any accrued vacation/sick/PTO pay during any unpaid leave period. (The amount and duration of this pay should be coordinated with any potential leave payments available through FFCRA.) Premium contributions can be deducted from this pay, or the employer can set up a policy to defer premium contributions to be collected upon return to work.
A layoff will trigger a COBRA event, and COBRA (or CalCOBRA) continuation coverage should be offered or individuals can research plans available on the Covered California or Federal Marketplace. Any accrued vacation or PTO would be paid out as usual.
Also see the DOL COVID-19 and the American Worker page for helpful resources: https://www.dol.gov/agencies/whd/pandemic. Keep in mind that when sick leave is not an option, unemployment insurance may be available.
Some insurance carriers are easing the eligibility rules to accommodate company furloughs that will allow the benefits to continue for a period of time as long as the employer continues premium payments. Some carriers are also extending coverage for COVID-19 to include treatment as well as testing. Your Johnson & Dugan Team will be providing you with the rules for your specific insurance carriers. On the J&D Coronavirus web page there are General Agent (GA) websites in the Miscellaneous Resources section. The GA sites consolidate the carrier policies and are all updated regularly.
All employers should be posting and/or distributing the mandatory FFCRA employee rights poster by April 1st. Click here to download the poster from the DOL website.
ThinkHR is hosting another webinar on COVID-19 Updates and Employer FAQ. The registration link is below.
We will share pertinent information from the webinar in a future email update if you are not able to attend.
CARES Act Highlights
The CARES Act summary document, written by Virginia Krieger-Sutton, Vice President, Retirement Plans Practice at Johnson & Dugan, sent out on March 27th summarized provisions related to retirement plans. There are also provisions relating to Health Flexible Spending Accounts (FSA), Healthcare Spending Accounts (HSA) and Health Reimbursement Accounts (HRA) plans. As summarized by WageWorks:
- Under the CARES Act, plans (or plan sponsors) may pay for telehealth services before reaching the deductible, without impacting an individual’s eligibility for an HSA. However, this is a temporary provision to encourage telehealth services during the current healthcare emergency. The bill outlines an end date of December 21, 2021 for this provision.
- HSA-qualified health plans can now cover telehealth and other remote care service expenses below the HDHP statutory deductible limit, or at no or low-cost sharing, without affecting an account holder’s ability to continue contributing to their HSA. This provision will last until December 31, 2021.
- Over-the-counter drugs and medicines can be paid for or reimbursed through an FSA, HRA or HSA without a doctor’s prescription.
- Menstrual care products are now considered a qualified medical expense and are eligible for payment or reimbursement through an FSA, HRA or HSA. All expenses incurred after December 31, 2019 qualify, and the provision has no expiration date.
- Navia Benefits also published a detailed description of the changes and has a dedicated FAQ page: https://www.naviabenefits.com/covid-faq/
Below are additional CARES Act resources you may find helpful:
- The American Retirement Association created the attached CARES Act FAQ.
- Small business may be eligible for emergency grants of up to $10,000 to cover immediate operating costs. For more information:
- U.S. Chamber of Commerce https://files.constantcontact.com/b0edcc7f701/b6cdf270-9fca-41b5-aac0-a7dd8a0b5b29.pdf
- IRS https://www.irs.gov/coronavirus
- U.S. Small Business Administration (SBA) Loan Resources https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources
- EisnerAmper (CPA) CARES Act Tax Summary: https://www.eisneramper.com/cares-coronavirus-tax-0320/