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. 

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