A bill titled Jumpstarting Our Businesses’ Success Credit Act of 2020, which would make significant changes to the employee retention tax credits available under the CARES Act, is currently under consideration in the US House of Representatives. In this article, we outline the proposed changes, which are generally designed to increase the availability, scope and amount of the credits.
To help cafeteria plan participants address challenges arising from the COVID-19 crisis, the Internal Revenue Service recently issued guidance allowing employers to make a number of participant-friendly changes under their cafeteria plans. While employer adoption of these more flexible rules is voluntary, plan sponsors should work with third-party administrators, insurance providers and legal advisors to ensure that the new provisions are properly adopted, documented and communicated.
The Internal Revenue Service (IRS) recently announced cost-of-living adjustments to the applicable dollar limits for health savings accounts (HSAs) and high-deductible health plans (HDHPs) for 2021. Some of the dollar limits currently in effect for 2020 will change for 2021.
Most states have issued some form of ‘shelter in place’ or ‘stay at home’ order to flatten the curve of COVID-19. As a result, many business operations have been temporarily suspended, unless the business is engaged in essential or critical infrastructure functions or supports businesses engaged in such functions.
For businesses that are considered ‘essential’ and have employees still reporting to work, what steps can employers take to keep their workplace healthy and safe?
The US Department of Labor, in conjunction with the Internal Revenue Service and US Department of the Treasury, issued guidance and deadline extensions applicable to ERISA-governed group health and welfare plans. The guidance provides relief for plan sponsors, plan administrators and plan participants that may be struggling to comply with applicable deadlines and requirements in the midst of the chaos related to the COVID-19 pandemic.
On May 1, 2020, the Department of Labor (DOL) issued updated Frequently Asked Questions and revised model notices under the Consolidated Omnibus Budget Reconciliation Act (COBRA). COBRA is a federal law that permits individuals to continue group health plan coverage for a limited period of time following certain events, such as a termination of employment, that are coupled with a loss of coverage. Employers are required to notify individuals of their rights under COBRA.
The changes in the model notices are primarily designed to help Medicare-eligible individuals understand their options for healthcare coverage. The model notices, however, do not include language that addresses DOL relief issued earlier in the week that provides additional time for individuals to elect COBRA coverage through the end of the coronavirus pandemic. Plan sponsors should work with their COBRA vendors and legal counsel to determine whether the model notice updates or coronavirus relief would necessitate any updates to the notices currently used by their group health plan to notify plan participants and beneficiaries of their rights under COBRA.
How should US employers approach the Coronavirus? With rapid developments in local, state and federal guidance and law, the appropriate approach for each employer will vary depending on the nature of the work, industries served, location(s), size, amongst other considerations. We recently updated these FAQs to provide you with the latest developments and best practices for your business.
Overview
A new IRS notice extends the deadline for individuals to make health savings account (HSA) contributions from April 15, 2020 to July 15, 2020. The IRS issued the notice to provide taxpayers with various tax filing and payment deadline extensions in response to the ongoing COVID-19 emergency.
In Depth
In response to the COVID-19 emergency, the IRS has issued Notice 2020-18, which extends certain tax filing and payment deadlines. All taxpayers with filing or payment deadlines of April 15, 2020 are eligible for relief under the Notice, regardless of whether they are directly impacted by COVID-19 (for example, due to illness or quarantine). The Notice extends the deadline for individuals to make contributions to their health savings accounts from April 15, 2020 to July 15, 2020.
HSAs allow individuals who are covered under high-deductible health plans (HDHPs) to contribute an amount up to IRS limits ($3,550 for individual coverage and $7,100 for family coverage in 2020), which is used to pay for certain eligible medical expenses on a pre-tax basis. HSA contributions are typically due by the federal income tax filing deadline of April 15. Because that deadline has now been extended to July 15, 2020, the IRS has also extended the deadline to make HSA contributions until the new filing deadline.
Earlier this month, the IRS allowed individuals covered by an HDHP to receive testing and care for COVID-19 without a deductible, or with a deductible below the HDHP minimum, without disqualifying the individual from making or receiving HSA contributions (see our previous On the Subject here).
In the ongoing effort to help individuals impacted by COVID-19, Congress passed the Coronavirus Aid, Relief, and Economic Securities Act (CARES Act) on March 27, 2020. The President signed the CARES Act into law the same day. The historic stimulus package provides wide-ranging relief for both employers and employees. This includes rules that impact health and welfare, retirement and executive compensation plans and programs.
For more information about the impact of the CARES Act on employer-provided benefits, access our On the Subject articles on the:
In addition, for information about the frequently asked questions regarding health and welfare, retirement and executive compensation issues in the COVID-19 era, access our FAQs.
Coronavirus (COVID-19) raises serious concerns for employers of all shapes and sizes, across all industries and in every business sector. As the impact of COVID-19 continues to grow, many employers are faced with new challenges that affect not only their businesses and their employees, but the health and welfare, retirement and executive compensation plans and programs on which those employees rely. These new issues are arising in addition to the myriad benefit plan challenges that employers face each day.
We address a number of frequently asked questions regarding health and welfare, retirement and executive compensation issues in the COVID-19 era. This includes not only questions about issues employers are currently facing, but questions about issues employers may face going forward. Given the rapidly evolving nature of the crisis, McDermott’s Employee Benefits and Executive Compensation team will periodically update these FAQs to provide you with the most up-to-date information. We will also continue to keep you informed of the latest developments and provide comprehensive insights to help you navigate these and related concerns.
Subscribe
