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COVID-19 Legislation & Regulations FAQs

COVID-19 Legislation & Regulations FAQs

Understand the CARES Act, the Families First Coronavirus Relief Act (FFCRA), the Paycheck Protection Program, and other legislative and regulatory developments impacting you and your small business clients.

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COVID-19 Legislation & Regulations FAQs


CARES Act

CARES Act

How does a business apply for forgiveness of a Paycheck Protection Program (PPP) loan?

The Payroll Protection Program created by the CARES Act includes a provision that loans will be fully forgiven when used for payroll costs, interest on mortgages, rent, and utilities, provided the business maintains their payroll at a level equal to what it was before the Coronavirus impacted the business.

On May 15, 2020, the US Small Business Administration (SBA) released the Loan Forgiveness Application form.

To apply for loan forgiveness, businesses should submit the completed application to the lender that is servicing the loan, along with the required supported documentation, which is detailed in the forgiveness application form.

Businesses should consult with their financial advisor before applying for loan forgiveness.

 

Helpful Resources

The US Chamber of Commerce has created a very helpful guide to help small businesses understand the Paycheck Protection Program, and also a helpful guide to PPP loan forgiveness.

The US Department of the Treasury has a Paycheck Protection Program web page that includes several helpful resources, including a Paycheck Protection Program Factsheet for Borrowers that provides even more detail.

The US Small Business Administration (SBA) has a Paycheck Protection Program web page that provides information on the program, who can apply, how to apply, loan details and forgiveness, and more.

 

Claremont Insurance Services and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

Updated 05/21/2020
(view full answer)

What happens to PPP loan forgiveness when EEs decide not to come back to work?

The Payroll Protection Program created by the CARES Act includes a provision that loans will be fully forgiven when used for payroll costs, interest on mortgages, rent, and utilities, provided the business maintains their payroll at a level equal to what it was before the Coronavirus impacted the business.

But what happens if laid off employees refuse to come back to work? The Small Business Administration (SBA) addresses this question in an updated FAQ released on May 19, 2020. In short, loan forgiveness will not be impacted if the business laid off an employee, and then makes an offer of re-employment to the employee which the employee then refuses, as long as the layoff, offer of re-employment and refusal are all documented.

The full question and answer (#40) can be found in the SBA Payroll Protection Program Loans, Frequently Asked Questions (FAQs).

 

Helpful Resources

Small Business Administration:

Payroll Protection Program Loans, Frequently Asked Questions (FAQs). Updated May 19, 2020.

Paycheck Protection Program Loan Information

Claremont Insurance Services and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

Updated 05/21/2020
(view full answer)

What is the CARES Act?

The CARES Act (or Coronavirus Aid, Relief, and Economic Security Act) was passed into law on March 26, 2020. The new law is a $2 trillion economic stimulus package designed to mitigate some of the economic damage caused by the Coronavirus and contains billions of dollars in loans, grants and direct payments to help individuals and businesses, medical care providers and states and localities hit hard by the Coronavirus. The Act contains numerous provisions, several of which have a large impact on small businesses:

Payroll Protection Program that provides low cost forgivable loans to small businesses in order that they can continue to fund employee payroll and benefits.

Economic Injury Disaster Loans (EIDL). The CARES Act expands this longstanding Small Business Administration (SBA) program. The EIDL program assist businesses, renters, and homeowners located in regions affected by declared disasters.

$10,000 grants available to small businesses.

Employee Retention Tax Credit for employers who are closed, partially closed, or experiencing significant revenue losses as a result of the Coronavirus. The goal of the tax credits is to keep employees employed, to incentivize hiring back of employees, or to put employees on a paid furlough to make sure they have jobs to return to when the crises passes.

 

Helpful Resources

US Chamber of Commerce
CARES ACT: What Small Businesses Need to Know

 

Claremont Insurance Services and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

Updated 05/21/2020
(view full answer)

What is the “Payroll Protection Program”?

The CARES Act created a Payroll Protection Program administered by the US Small Business Administration (SBA) that provides low cost forgivable loans to small businesses in order that they can continue to fund employee payroll and benefits. The loans are forgiven as long as payroll costs are maintained equal to what they were before the Coronavirus impacted the business. Many financial experts are explaining that in essence, the loans become grants if the business maintains its payroll costs.

Funding amount. Payroll costs for up to 8 weeks plus an additional 25%, capped at $10 million.

Funds can be used for:

  • Payroll.
  • Employer health insurance premium contributions and other benefits costs.
  • Rent, mortgages and utilities.

Fully Forgiven. Funds are provided in the form of loans that will be fully forgiven when used for payroll costs, interest on mortgages, rent, and utilities, provided the employer maintains their payroll at a level equal to what it was before the Coronavirus impacted the business.

Loan Payments/Interest. If the loan must be repaid, payments will be deferred for six months. The loan has a 0.50% fixed interest rate.

Collateral/ Fees. No collateral or personal guarantees are required. Neither the government nor lenders will charge small businesses any fees.

All Small Business Eligible. Small businesses with 500 or fewer employees—including: nonprofits, veterans organizations, tribal concerns, self-employed individuals, sole proprietorships, and independent contractors. Businesses with more than 500 employees are eligible in certain industries.

 

Resources

The US Chamber of Commerce has created a very helpful guide to help small businesses understand the Paycheck Protection Program and help them prepare to file for a loan.

The US Department of the Treasury has a Paycheck Protection Program web page that includes several helpful resources, including a Paycheck Protection Program Factsheet for Borrowers that provides even more detail.

The US Small Business Administration (SBA) has a Paycheck Protection Program web page that provides information on the program, who can apply, how to apply, loan details and forgiveness, and more.

 

Claremont Insurance Services and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

Updated 05/21/2020
(view full answer)

Are small business loans available through the CARES Act?

Yes. The CARES Act created a Payroll Protection Program administered by the US Small Business Administration (SBA) that provides low cost forgivable loans to small businesses.

Updated 05/21/2020
(view full answer)

What are Economic Injury Disaster Loans (EIDL)?

The CARES Act expands the Small Business Administration (SBA)’s long-standing Economic Injury Disaster Loan Program (EIDL). The EIDL program assist businesses, renters, and homeowners located in regions affected by declared disasters.

Helpful Resources

US Chamber of Commerce
Guide to SBA’s Economic Injury Disaster Loans

 

Claremont Insurance Services and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

Updated 05/21/2020
(view full answer)

Are there $10,000 grants available to small businesses through the CARES Act?

Yes. Small business applicants for an SBA Economic Injury Disaster Loan (EIDL) can receive a $10,000 emergency grant within three days of application (through Dec. 31, 2020). There is no obligation to repay the grant. To receive the $10,000 emergency grant, it is not necessary to have an approved EIDL loan. However, if the PPP loan is secured, the $10,000 grant will be subtracted from the forgiveness amount.

Helpful Resources

US Chamber of Commerce
Guide to SBA’s Economic Injury Disaster Loans

 

Claremont Insurance Services and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

Updated 05/21/2020
(view full answer)

Are tax credits available to small businesses through the CARES Act?

Yes. The CARES Act created a new Employee Retention Tax Credit for employers who are closed, partially closed, or experiencing significant revenue losses as a result of the Coronavirus. The goal of the tax credits is to keep employees employed, to incentivize hiring back of employees, or to put employees on a paid furlough to make sure they have jobs to return to when the crises passes.

Note: These tax credits are unrelated to the tax credits available through the FFCRA.

Helpful Resources

US Chamber of Commerce
Guide to the Employee Retention Tax Credit

US Internal Revenue Service (IRS)
Coronavirus Tax Relief web page, including information of the Employee Retention Tax Credit

 

Claremont Insurance Services and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

Updated 05/21/2020
(view full answer)

What is the Employee Retention Tax Credit?

The CARES Act created a new Employee Retention Tax Credit for employers who are closed, partially closed, or experiencing significant revenue losses as a result of the Coronavirus. The goal of the tax credits is to keep employees employed, to incentivize hiring back of employees, or to put employees on a paid furlough to make sure they have jobs to return to when the crises passes.

Note: These tax credits are unrelated to the tax credits available through the FFCRA.

Helpful Resources

US Chamber of Commerce
Guide to the Employee Retention Tax Credit

US Internal Revenue Service (IRS)
Coronavirus Tax Relief web page, including information of the Employee Retention Tax Credit

 

Claremont Insurance Services and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

Updated 05/21/2020
(view full answer)

Are independent contractors and sole proprietors eligible for loans through the Payroll Protection Program?

The US Small Business Administration (SBA) has published rules on how Payroll Protection Program (PPP) loans will be administered for individuals that have self-employment income (such as independent contractors and sole proprietors). These rules apply to many brokers and some of their small group clients. 

See below an abridged summary of the new PPP loan rules.

Those considering applying for a PPP loan (especially in anticipation of loan forgiveness) are recommended to consult with their financial advisor.

(The full PPP rules, along with other helpful information, can be found on the US Department of the Treasury’s webpage: The CARES Act Provides Assistance to Small Businesses.)

 

SBA Payroll Protection Program Rules, April 14, 2020
Individuals with Self-Employment Income who File a Form 1040, Schedule C
Abridged Summary

 

I have income from self-employment and file a Form 1040, Schedule C. Am I eligible for a PPP Loan?
(Pages 4-6)

Yes. Individuals with self-employment income (such as an independent contractor or a sole proprietor) generally are eligible for Payroll Protection Loans.

Specific requirements are outlined in the full rules, including for those individuals that are also a partner in a business.

 

How do I calculate the maximum amount I can borrow and what documentation is Required?
(Pages 6-8)

It depends on whether or not you employ other individuals. If you have no employees, the general calculation for the maximum loan amount is:

The net profit amount in your 2019 Schedule C (up to a maximum of $100,000), divided by 4.8.

(Rationale for this calculation: For sole proprietors with no employees, the maximum loan amount is 2.5 times average monthly net profit. See the full rules for more detail.)

There are also further rules if you have employees, or if you have also received an EIDL loan.

 

How can PPP loans be used by individuals with income from self-employment who file a 2019 Form 1040, Schedule C?
(Pages 7-11)

The proceeds of PPP loans can generally be used to replace your income, any employee costs, business mortgage and other debt interest payments, and business rent and utility payments.

At least 75 percent of the PPP loan proceeds must be used for payroll costs (which includes sole proprietor net profit).

 

What amounts shall be eligible for forgiveness?
(Pages 11-13)

Generally, the amount of loan forgiveness can be up to the full principal amount of the loan plus accrued interest. There are a couple of important qualifications:

Firstly, there is a limit for the amount of forgiveness available for owner compensation (sole proprietor net profit). The calculation is:

The net profit amount in your 2019 Schedule C (up to a maximum of $100,000], divided by 6.5.

(Rationale for this calculation: For sole proprietors, the amount of forgiveness available for owner compensation is eight weeks of net profit. See the full rules for more detail.)

Note that this calculation is different than that used to calculate the total amount that can be borrowed. The full rules provide background on the rationale for this calculation.

Secondly, at least 75 percent of the amount forgiven must be attributable to payroll costs (which includes sole proprietor net profit).

 

Claremont Insurance Services and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

 

Updated 05/21/2020
(view full answer)

In a Payroll Protection Program (PPP) loan application, can the cost of independent contractors (1099s) be included when calculating the loan amount?

No. The cost of independent contractors (1099s) cannot be included when calculating the loan amount. The total loan amount is based on average monthly payroll. The exact definition can be found in this US Department of the Treasury Paycheck Protection Program Factsheet for Borrowers. The resources below provide more helpful information.

 

Helpful Resources

The US Chamber of Commerce has created a very helpful guide to help small businesses understand the Paycheck Protection Program and help them prepare to file for a loan.

The US Department of the Treasury has a Paycheck Protection Program web page that includes several helpful resources, including a Paycheck Protection Program Factsheet for Borrowers that provides even more detail.

The US Small Business Administration (SBA) has a Paycheck Protection Program web page that provides information on the program, who can apply, how to apply, loan details and forgiveness, and more.

 

Claremont Insurance Services and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

Updated 05/21/2020
(view full answer)

Families First Coronavirus Response Act (FFCRA)

Families First Coronavirus Response Act (FFCRA)

What is the Families First Coronavirus Response Act (FFCRA)?

The Families First Coronavirus Response Act (FFCRA) was passed into law on March 18, 2020. The new law assists working families impacted by the Coronavirus, and includes several provisions to protect workers while helping employers provide emergency paid sick leave and paid family leave in the case of school closures.

Of particular importance to employers and their advisors are the:

The leave provisions of the law went into effect on April 1, 2020.

 

Helpful Resources

Kaiser Family Foundation
The Families First Coronavirus Response Act: Summary of Key Provisions

 

Claremont Insurance Services and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

Updated 04/23/2020
(view full answer)

What are the paid leave provisions of the Families First Coronavirus Response Act (FFCRA)?

The paid leave provisions of the Families First Coronavirus Response Act (FFCRA) went into effect on April 1, 2020.

Under the paid leave provisions of the law, covered employers must provide to employees who are unable to work due to qualified Covid-19 reasons:

Emergency Paid Sick Leave (EPSL): up to two weeks (or a part-time employee’s two-week equivalent) of paid sick leave, paid at rates of pay based on the reason for the leave (illness, quarantine or school closures).

Emergency Paid Family and Medical Leave (EFMLA): up to twelve week of paid expanded family and medical leave to employees that are unable to work due to school closures.

The FFCRA provides employers refundable tax credits that reimburse them, dollar-for-dollar, for the cost of providing this leave.

Small Business Exemption. Small businesses with fewer than 50 employees may qualify for an exemption to provide leave for the school closure reason if the leave requirements would jeopardize the viability of the business. The rules governing this exemption are quite specific.

 

Helpful Resources

US Department of Labor (DOL)
Comprehensive Covid-19 resource page providing employers with information on –among other issues –the paid sick leave and expanded family and medical leave provisions of the FFCRA, including:

  • Fact sheets on FFCRA employee paid leave rights and FFCRA employer paid leave requirements
  • A comprehensive series of more than seventy FAQs to help businesses and their advisors. The FAQs address questions including:
    • How to determine if a business is subject to the law
    • How to calculate the number of hours of leave, and the rate of pay, when calculating the paid leave.
    • How to take advantage of the “small business” (under 50 employees) exemption.
  • Links to FFCRA posters that covered employers are required to conspicuously post in the workplace: either on the premises, on the employee website, or emailed or direct mailed to employees.

Claremont Partner Mammoth HR (with ThinkHR)
COVID-19 Crisis Response Center. Essential employer resources such as a COVID-19 HR Guidance and Best Practices recorded webinar, a summary of the new Families First Coronavirus Response Act, and sample HR policies that employers can adopt.

Claremont Partner HR Service, Inc.
COVID-19 Employer Toolkit. Helps employers navigate the Coronavirus challenges. Resources include a Families First Coronavirus Response Act Q&A, advice on remote working and telecommuting, information on all aspects of reductions in force, and more.

Helpful FFCRA flow chart
This helpful FFCRA flow chart (courtesy of Filice Insurance Agency) provides a visual step-by-step guide to assessing if an employer and employee are subject to the FFCRA provisions.

 

Claremont Insurance Services and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

Updated 04/23/2020
(view full answer)

Are tax credits available to small businesses through the FFCRA?

Yes, The FFCRA provides employers refundable tax credits that reimburse them, dollar-for-dollar, for the cost of providing paid sick and family leave wages to their employees for leave related to the Coronavirus.

The IRS has published a very detailed overview of how the refundable tax credits work along with answers to frequently asked questions.

Note: these tax credits are unrelated to the employee retention tax credits available through the CARES Act.

 

Helpful Resources

US Internal Revenue Service (IRS)
Coronavirus Tax Relief web page, including information of the refundable tax credits available under the FFCRA.

 

Claremont Insurance Services and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

Updated 04/23/2020
(view full answer)

What is the Small Business Exemption from the paid leave provisions of the FFCRA?

Small employers (less than 50 employees) may be eligible for a “Small Business Exemption” from the Emergency Paid Sick Leave and Emergency Family and Medical Leave provisions of the FFCRA.

The rules governing this exemption are quite specific. Here is the current US Department of Labor (DOL) definition of the “Small Business Exemption”:


A small business is exempt from certain paid sick leave and expanded family and medical leave requirements if providing an employee such leave would jeopardize the viability of the business as a going concern. This means a small business is exempt from mandated paid sick leave or expanded family and medical leave requirements only if the:

  • employer employs fewer than 50 employees;
  • leave is requested because the child’s school or place of care is closed, or child care provider is unavailable, due to COVID-19 related reasons; and
  • an authorized officer of the business has determined that at least one of these three conditions satisfied:
    • The provision of paid sick leave or expanded family and medical leave would result in the small business’s expenses and financial obligations exceeding available business revenues and cause the small business to cease operating at a minimal capacity;
    • The absence of the employee or employees requesting paid sick leave or expanded family and medical leave would entail a substantial risk to the financial health or operational capabilities of the small business because of their specialized skills, knowledge of the business, or responsibilities; or
    • There are not sufficient workers who are able, willing, and qualified, and who will be available at the time and place needed, to perform the labor or services provided by the employee or employees requesting paid sick leave or expanded family and medical leave, and these labor or services are needed for the small business to operate at a minimal capacity.

The Department encourages employers and employees to collaborate to reach the best solution for maintaining the business and ensuring employee safety.

 

Helpful Resources

US Department of Labor (DOL)
Comprehensive Covid-19 resource page providing employers with information on –among other issues –the paid sick leave and expanded family and medical leave provisions of the FFCRA, including:

  • Fact sheets on FFCRA employee paid leave rights and FFCRA employer paid leave requirements
  • A comprehensive series of more than seventy FAQs to help businesses and their advisors. The FAQs address questions including:
    • How to determine if a business is subject to the law
    • How to calculate the number of hours of leave, and the rate of pay, when calculating the paid leave.
    • How to take advantage of the “small business” (under 50 employees) exemption.
  • Links to FFCRA posters that covered employers are required to conspicuously post in the workplace: either on the premises, on the employee website, or emailed or direct mailed to employees.

Claremont Partner Mammoth HR (with ThinkHR)
COVID-19 Crisis Response Center. Essential employer resources such as a COVID-19 HR Guidance and Best Practices recorded webinar, a summary of the new Families First Coronavirus Response Act, and sample HR policies that employers can adopt.

Claremont Partner HR Service, Inc.
COVID-19 Employer Toolkit. Helps employers navigate the Coronavirus challenges. Resources include a Families First Coronavirus Response Act Q&A, advice on remote working and telecommuting, information on all aspects of reductions in force, and more.

Helpful FFCRA flow chart
This helpful FFCRA flow chart (courtesy of Filice Insurance Agency) provides a visual step-by-step guide to assessing if an employer and employee are subject to the FFCRA provisions.

 

Claremont Insurance Services and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

Updated 04/23/2020
(view full answer)

What is the Emergency Paid Sick Leave Act (EPSLA)

The Emergency Paid Sick Leave Act (EPSLA) is the formal name for the part of the FFCRA legislation that provides emergency paid sick leave for employees affected by the Coronavirus.

Updated 04/23/2020
(view full answer)

What is the Emergency Family and Medical Leave Expansion Act (Expanded FMLA or EFMLA)?

The Emergency Family and Medical Leave Expansion Act (Expanded FMLA or EFMLA) is the formal name for the part of the FFCRA legislation that provides a temporary expansion of the Family and Medical Leave Act (FMLA) to cover a new category of leave related to the Coronavirus.

Updated 04/23/2020
(view full answer)

ACA: Impact & Clarifications

ACA: Impact & Clarifications

Is there any filing relief for Applicable Large Employers under the Affordable Care Act (ACA)?

Not currently.

Claremont Insurance Services and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

Updated 04/04/2020
(view full answer)

For Applicable Large Employers under the ACA, how is employee eligibility determined in the event of a reduction in hours, furlough or similar?

There are numerous issues that Applicable Large Employers will need to consider regarding employee eligibility, including appropriate administration of measurement and stability periods, affordability, and more. Employers should consult an ACA advisor.

Helpful Resources

Claremont has several HR Compliance and ACA Reporting trusted partners that can help brokers and employers navigate Affordable Care Act requirements. See the Trusted Partners section of our website for more information.

 

Claremont Insurance Services and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

Updated 04/04/2020
(view full answer)

COBRA: Impact & Clarifications

COBRA: Impact & Clarifications

Are COBRA rules changing in response to COVID-19?

Yes.  

On May 4, 2020, the US Department of Labor (DOL), Internal Revenue Service (IRS) and Department of Health and Human Services (HHS) jointly issued new rules that temporarily extend several COBRA deadlines, including the deadlines for eligible employees to elect COBRA continuation coverage and to make COBRA premium payments. 

Effectively, the new rules apply a “time out” from many COBRA deadlines until 60 days after the announced end of the Coronavirus National Emergency. 

This SHRM article provides a good overview of the new COBRA rules.  

Employers subject to COBRA are advised to consult with their advisors in implementing the new rules. 

Claremont partner TASC can help employers seeking COBRA administration assistance. 

 

Helpful resources  

DOL Temporarily Extends COBRA Deadlines, SHRM.

 

Claremont Insurance Services and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

Updated 05/05/2020
(view full answer)

Are furloughed employees eligible for COBRA coverage?

Some carriers are temporarily permitting employees to remain eligible for employer coverage during a furlough. Employers should check their carrier’s furlough policy, and then consult their COBRA administrator before making any COBRA determinations. In general, loss of employer coverage because of termination of employment or reduction in hours is a COBRA qualifying event.

 

Claremont Insurance Services and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

Updated 04/04/2020
(view full answer)

If a business closes, are terminated employees eligible for COBRA coverage?

No. COBRA coverage continues and/or is available only if the employer plan remains in place. Employers should consult their COBRA administrator before making any COBRA determinations.

 

Claremont Insurance Services and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

Updated 04/04/2020
(view full answer)

ERISA: Impact & Clarifications

ERISA: Impact & Clarifications

Is there any relief for employers from ERISA requirements?

The CARES Act grants the US Department of Labor (DOL) authority to delay ERISA related filing requirements. The DOL has not yet issued any such rules or guidance.

Updated 04/05/2020
(view full answer)

HDHPs and HSAs: Impact & Clarifications

HDHPs and HSAs: Impact & Clarifications

Has the deadline been extended for tax year 2019 HSA contributions?

Yes. Contributions may be made to HSAs, for a particular year, at any time during the year or by the due date for filing your tax return for that year. Because the due date for filing Federal income tax returns is now July 15, 2020, under this IRS relief, contributions may be made to HSAs for 2019 at any time up to July 15, 2020.

 

Helpful Resources

IRS: Filing and Payment Deadlines Questions and Answers (see section on Health Savings Accounts (HSAs) and Archer Medical Savings Accounts (MSAs))

 

Claremont Insurance Services and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

Updated 05/22/2020
(view full answer)

Did the CARES Act expand the list of HSA qualified medical expenses?

Yes. 

The CARES Act repealed the prescription requirement for over-the-counter (OTC) drug and medicines to be considered HSA qualified medical expenses. Now OTC drugs and medicines not prescribed by a physician can be reimbursed pre-tax. 

In addition, menstrual care products now qualify for reimbursement. The CARES Act adds tampons, pads, liners, cups and sponges as qualified medical expenses. 

The addition of OTC medication and menstrual care products became effective 1/1/2020 and has no expiration date. 

Claremont HSA partner Sterling Administration provides this advice to HSA accountholders: 

“We expected merchants to start adopting changes for OTC items around April 15 and menstrual care products around May 15. However, merchants may take up to a month to complete the changes that will allow consumers to purchase these items with a card swipe. 

If consumers try to purchase these items with their benefits card before systems have been updated and the transaction is denied, they can submit a claim for reimbursement.” 

 

Helpful resources 

SHRM: How are HSAs, FSAs and HRAs affected by the CARES Act? 

 

Claremont Insurance Services and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

Updated 05/15/2020
(view full answer)

Can HDHPs provide first dollar coverage for Covid testing and treatment?

Yes, the IRS has advised that high-deductible health plans (HDHPs) can pay for 2019 Covid-19 -related testing and treatment, without jeopardizing their status. This also means that an individual with an HDHP that covers these costs may continue to contribute to a health savings account (HSA).

 

Helpful Resources

US Internal Revenue Service (IRS)
Coronavirus Tax Relief web page, including the news release and guidance relating to HDHP coverage of Covid-19 testing and treatment.

 

Claremont Insurance Services and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

Updated 04/04/2020
(view full answer)

Can HDHPs provide first dollar coverage for telehealth services?

Yes, the IRS has advised that high-deductible health plans (HDHPs) can pay for 2019 Covid-19 -related testing and treatment, without jeopardizing their status.

In addition, the CARES Act allows “telehealth and other remote care services” below the deductible to be permitted in an HSA-compatible high deductible health plan (HDHP). This provision is effective immediately and will expire December 31, 2021.

This also means that an individual with an HDHP that covers these costs may continue to contribute to a health savings account (HSA).

 

Helpful Resources

US Internal Revenue Service (IRS)
Coronavirus Tax Relief web page, including information of the refundable tax credits available under the FFCRA.

 

Claremont Insurance Services and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

 

Updated 04/04/2020
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OSHA: Impact & Clarifications

OSHA: Impact & Clarifications

What OSHA responsibilities do employers have related to the Coronavirus?

OSHA regulations stipulate that employers have a responsibility to provide a safe workplace. The US DOL, Occupational Safety and Health Administration has a web page dedicated to OSHA-related Coronavirus issues, including an outline of OSHA standards that apply to to Covid-19.

 

Claremont Insurance Services and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

 

 

Updated 04/04/2020
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Other

Other

Is the City of San Francisco providing any relief to employers and employees from Health Care Security Ordinance (HCSO) regulations?

Yes.

  • The City is cancelling the employer requirements to submit the 2019 HCSO Annual Reporting Form.
  • The City is allowing employees in San Francisco to use funds their employer has contributed to SF Medical Reimbursement Accounts (MRAs) for necessary expenses.

All other HCSO requirements are still in effect.

 

Helpful Resources

City of San Francisco, OLSE
Health Care Security Ordinance webpage

SF City Option Cash Disbursement Program
Details of allowance for one-time cash disbursements from SF MRAs

 

Claremont Insurance Services and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

Updated 04/28/2020
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The answers provided are a best interpretation of the information available as of the date posted. The answers are for informational purposes and should not be construed as tax or legal advice.