3 ways benefits plans can provide relief in uncertain times
As the COVID-19 pandemic creates entirely new challenges for millions of American workers, employers of every size are rallying to keep employees safe and keep the lights on. All the while, new legislation around employee benefits brings opportunities that must be understood before they can bring much-needed relief to employees.
Outside of our own industry, employee benefits are generally a hot topic once a year — during open enrollment. Now, when so many Americans are struggling to make ends meet, benefits are back in the news in a big way, with the focus on the ways employee benefit plans can help them through this uncertain time.
Recent legislation provides opportunities related to employee benefit plans:
- IRS Notice 2020-15 (part of phase 2 COVID-19 relief) permits employers to cover expenses for testing and treatment of COVID-19 prior to satisfaction of the minimum deductible and without disqualifying the High Deductible Health Plan (HDHP).
- By declaring a national emergency in connection with the coronavirus disease, President Trump triggered the provisions of Section 139 of the Internal Revenue Code, whereby employers can make tax-free payments to employees to cover reasonable COVID-19 expenses.
- The new Families First Coronavirus Response Act (FFCRA or Act) requires certain employers to provide employees with paid sick leave or expanded family and medical leave for specified reasons related to COVID-19. It also requires health plans to cover COVID-19 testing without any cost sharing.
- In the CARES Act (phase 3 COVID-19 relief), the prescription requirement for OTC drugs and medicines was repealed permanently. The law also includes menstrual care products as allowable OTC items. These changes apply to goods purchased or services received after December 31, 2019.
While doing their best to deal with the urgent and dire human and business impact, employers are seeking help to quickly parse out relevant parts of legislation, and — in collaboration with payers, administrators and technology partners like WEX — getting solutions in place. Here are three examples of how benefit plans can address common questions and issues in the workplace:
1. Offsetting COVID-19 care costs
Many insurance carriers are fully covering COVID-19 related expenses. Employers whose carriers are not doing this may want to consider offering a new health reimbursement arrangement (HRA) that expressly covers any COVID-related expenses, helping to keep employees’ health savings account (HSA) dollars intact.
Employers may also want to consider HSA funding acceleration, whereby an HSA advance would allow employees access to future contributions and provide an easy way for employees to repay employers as future contributions are received. And employers can look at accelerating their future contributions to employee HSAs.
2. Assisting staff working from home or required to complete essential duties in the workplace
Many organizations have transitioned global employees to work from home until further notice. With the workplace and home now being one and the same for so many, employers are having to consider their employees’ home lives in ways they have not before. Paying for and arranging childcare is certainly a top concern, especially for essential employees who are vital to public well-being — e.g., healthcare workers, first responders, grocers and pharmacists. But employers are also looking at how to help employees create effective work-from-home settings and solve childcare needs.
- One possible solution is for employers to add a new temporary dependent care benefit, whereby employers can cover dependent care expenses with an expanded set of expense coverage. IRS Section 139 may allow tax-free employee reimbursement of these expenses.
- To discourage their employees from using mass transit that might increase their risk of infection, employers can also look at making contributions to an existing parking plan or create a temporary new one for this purpose.
- Employees may incur costs to outfit their home office, such as computer accessories and ergonomic items. Employers can offer a new, card-based work-from-home benefit account that provides ready access to funds when needed, with a limited set of merchant types, online or offline, to control where funds are used. This provides a cash flow benefit to both employee and employer via notional funding.
3. Assisting employees unable to work or working fewer hours
Many employees will experience new financial burdens with lost hours and wages. Employers looking for solutions to keep these employees engaged during this temporary period may want to consider offering access to an emergency funds account. Employees are provided with access to funds via a limited-use debit card for spending on necessities such as groceries, utilities and more, while excluding certain merchant types (such as liquor stores). This notionally funded account would ease employee cash flow burden, and employers could create customized rules as needed.
HR professionals, benefits administrators, and employment law counselors are being looked to for guidance on these scenarios like never before. They’re rising up to the challenge every day to keep employees connected in their “new normal” work settings and adjust benefits programs and packages. At the same time, companies like mine are racing to support administrators and employers with highly elastic, quick-implementation benefit solutions. Our collective goal: to build peace of mind for both employee and employer at a time when that perhaps has never been more difficult to come by.