Coronavirus Aid, Relief, and Economic Security Act

The Corona Aid, Relief, and Economic Security Act (CARES) is the third stimulus bill passed to help provide relief to individuals and businesses in reaction to the current Coronavirus pandemic.  The CARES Act contains provisions that are important to sponsors of group health plans as well as qualified retirement plans and fringe benefit plans.  Here is a brief summary of some of the entitlements under this legislation that affect healthcare plans.

  • Group Health Plans would be required to reimburse out-of-network providers for any Covid-19 tests and other services related to the Covid-19 virus.  Providers are required to publish the cash price online or risk a penalty by HHS of up to $300 per day.
  • Group Health Plans would be required to cover the cost of preventative services in relation to the COVID-19 virus, specifically vaccines, without pre-authorization.
  • A HDHP with an HSA would cover telehealth services without having to satisfy the plans minimum deductible.
  • HSAs, FSAs and HRAs funds can be used to purchase over-the-counter medications without a prescription including the purchase of menstrual care products.  This change repeals the ACA regulations that prohibited these reimbursements.

Other important elements to The CARESAct in regard to retirement plans and fringe benefits are summarized below.

  • Allows an individual affected by COVID-19 to withdraw up to $100,0000 from their eligible retirement plan without incurring early withdrawal penalty. Individuals can avoid paying income tax if the amount is repaid within three years.
  • Individuals can take loan up to 100 percent of the vested amount in account, up to $100,000, as opposed to previous rules where participant could only withdraw 50 percent of their vested amount. 
  • Payment of loan can be deferred for one year, with repayment due within 5 years.  Interest will be incurred during the delayed payment period.
  • Plan sponsors can rely on participant’s self-certification for withdrawal of funds as long as plan is amended by the end of 2022 plan year.
  • Allows plan sponsors to waive the minimum distribution requirements for 2020 for certain Defined Contribution Plans including employers maintaining single-employer pensions plans with due dates in 2020 until January 1, 2021.
  • Department of Labor has the authority to postpone ERISA filing deadlines for a period up to one year because of public health emergency.
  • Employers can provide up to $5250 in tax-free student loans repayment benefits. This means the employer could contribute to student loan payments for their workers and it would be included as income.

This overview provides some of the provisions in The CARES Act.  It is advisable to contact your TPA or benefits attorney for more detailed information or if you have any questions on specific details.  We are anticipating further legislation in the coming months that will offer continued relief to businesses and individuals during this pandemic. 

How Does the Reduction of Employees Hours During the Coronavirus Epidemic Impact the ACA Measurement Guidelines?

With efforts to help reduce the spread of the coronavirus epidemic many companies that employ hourly workers such as restaurants and bars were ordered to close.  Many other industries due to shelter in place orders around the country have had to resort to short term layoffs, or furloughs, of their employees due to the lack of work.  The government has passed legislation to try to help companies and employees with a stimulus package to get through these months where income has come to a halt.  However, once the coronavirus spread has slowed and companies are able to open back up and start bringing back workers there will be questions on how the temporary layoffs or furloughs will impact companies when it comes time to determine their eligibility for an offer of health insurance.  

Under ACA guidelines companies need to offer health insurance coverage to employees that average over 130 hours per month.  There are two methods of measurement used to determine eligibility for their variable hour workers, a.k.a. hourly workers, The Monthly Measurement Method or The Look-Back Measurement Method.  It is recommended under the current circumstances that companies use the Look-Back Method to minimize the risk of ACA penalties. For the Look-Back Method you can set a measurement period, typically 6, 9 or 12 months, not to exceed 12 months, add the total hours for the employee for the designated measurement period and divide by the number of months you were measuring to get the average.  Since there will be a gap in hours for the time an employee was not working during the epidemic, employers need to know how this can impact the measurement for an employee. It is recommended to consult a knowledgeable ACA reporting company to make sure your company is adhering to the ACA reporting guidelines and avoiding possible exposure to penalties.  

What are your options if you lose your job and healthcare benefits?

Amid the COVID-19 outbreak and the “stay at home” order by many states, companies are losing business and struggling to pay bills and their employees.  Due to these circumstances, businesses are having to make the difficult decision to either furlough or layoff a significant amount of their employees.     The number of unemployment claims filed as of April 4th was 6.6 million, a new record from the 3.3 million record claims in the previous week, and is expected to continue to grow significantly.  Along with loss of employment, many individuals have also lost their access to health insurance.

If you find yourself among this group of unemployed, now is the time to act so you don’t find yourself in a situation where you need medical attention and don’t have health coverage, especially during a time when we are facing a worldwide epidemic.  Many are wondering what options they have if they lose their health insurance.  Here is a short summary of some healthcare options for unemployed workers:

  • MARKETPLACE – You may qualify to enroll in Marketplace insurance, which was established as part of the Affordable Care Act. Typically, you would enroll in a health plan on the Marketplace ( during the Open Enrollment Period, November 1st 2020 until December 15th 2020. However, a loss of a job is considered a qualifying “life event”, which would make you eligible for a Special Enrollment Period (SEP).  You only have 60 days from the time of the qualifying event to apply for the special enrollment, so you must act quickly.  If you miss the deadline, you may need to wait until the open enrollment period. 
  • COBRA – Under the Consolidated Omnibus Budget Reconciliation Act (COBRA), you are entitled to keep the health insurance from your former employer for up to 18 months.  This insurance can be very expensive since you will be responsible for the total monthly premium.  According to the Kaiser Family Foundation survey data, the monthly premium for single coverage in 2019 was $7,188 and $20,576 for family coverage.  This could be difficult to afford after losing your job.
  • MEDICAID – Medicaid is an insurance program run by the government and eligibility varies from state to state.  Medicaid offers free or low-cost insurance coverage based on income and family size.  Many states have expanded their Medicaid benefits under the Affordable Care Act.  To determine if you are eligible you can complete an application on your state’s health insurance marketplace.  

Another possibility for some may be to enroll in a spouse’s or family member’s employer-sponsored plan.  According to the ACA regulations, children under the age of 26 can be covered under a parent’s plan.   You have 30 days from the time your employer stops paying for insurance to enroll in family member’s plan.  Since enrollment periods for health plans are time sensitive, you need to act quickly to avoid a lapse in coverage.  

It is important to take the time to review these options now to determine the best fit for your needs. 

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