COVID-19 Webinar Q & A

In response to questions we have received related to the benefit plans we administer, Chard Snyder has compiled these Q & A’s as a response to our webinar held on 4/21/20 and to these answers with our associates, advisors and clients. Answers include the most recent information shared by the U.S. government and its agencies regarding the impact of the coronavirus (COVID-19) pandemic on these services.

PLEASE NOTE - Employers should check their Summary Plan Document (SPD), as that may supersede direction given here. We are monitoring the situation closely and providing updates as quickly as possible. Some information on this page may be impacted by further guidance that has been provided since it was posted. The information on this page is for educational purposes only. It is not legal or tax advice. For legal or tax advice, you should consult your own counsel.

Recent Legislation

Coronavirus Aid, Relief and Economic Security (CARES) Act

On March 27, President Trump signed into law the Coronavirus Aid, Relief and Economic Security (CARES) Act to aid businesses, workers, and the U.S. healthcare system in dealing with the coronavirus pandemic. The CARES Act contains key provisions relating to telehealth coverage and qualified expenses that affect health savings accounts (HSAs), health reimbursement arrangements (HRAs), and health flexible spending arrangements (FSAs).

HSA Contribution Deadline Extension

On March 24, the IRS updated their Filing & Payment Deadline FAQs, confirming that HSA (as well as IRA and certain retirement plan) contributions otherwise due by April 15, 2020, can be made as late as July 15, 2020. This aligns with the three-month tax return filing deadline extension the IRS announced in Notice 2020-18, issued on March 20, 2020.

Families First Coronavirus Response Act

On March 18, President Trump signed into law the Families First Coronavirus Response Act, implementing requirements for health plans to pay various expenses associated with testing and treatment of COVID-19 without cost-sharing, and also enhancing FMLA provisions for employees who must take leave resulting from COVID-19 illness.

HDHPs, HSAs & COVID-19 Testing & Treatment

On March 12, the Internal Revenue Service (IRS) issued Notice 2020-15, stating that high deductible health plans (HDHPs) can pay for COVID-19-related testing and treatment—prior to the satisfaction of a deductible—without jeopardizing the plan participants’ ability to contribute to a health savings account (HSA).

Additional information on recent legislation can be found on the Chard Snyder website at https://www.chard-snyder.com/covid-19-response and https://www.chard-snyder.com/employers-and-advisors/compliance-watch/

Definition of Terms

For purposes of these FAQs, these terms could be defined in a plan document or used interchangeably at the discretion of the employer to indicate a period of eligibility for the participant. The employer has two obligations: to adjust the plan document to define the terms of eligibility for the participant due to actions taken during the COVID-19 pandemic AND to notify the participant of any change in status as it relates to their eligibility for COBRA.

Furlough is a temporary leave situation that employers implement for reasons such as budget issues, a slow-down in business, or other non-discipline related issues. Typically, employees will be placed on this temporary, unpaid leave for a specified amount of time.

Layoff is when an employer dismisses an employee and they are let go (laid off) from their job. If a person who is laid off were to return to their original job, they would have to be rehired.

Historically, the term layoff means a temporary dismissal, like a furlough, but today we generally use the word layoff when an employer lets go of an employee because they can no longer afford to pay them, their business is down or other for economic reasons.

Sick leave is “leave from duty, work, or the like, granted because of illness,” meaning “permission to be absent.” Leave is also referred to as a leave of absence. Leave generally implies a person is away from work for an extended period of time.

Webinar Q & A

FSA/HRA/HSA & Over-the-Counter (OTC) Expenses

Q1. - Can you provide sample employee communication language about medical necessity for OTC products?

A1 - Over the Counter Medications. Not withstanding anything the plan to the contrary, a participant may be reimbursed for the cost of any medicine or drug for medical care, within the meaning of the term "medical care" as defined in Code Section 213(d) and the rulings and Treasury regulations thereunder, including those medicines or drugs that are not prescribed as also defined. Insulin remains a covered expense. Menstrual Products. A Participant may be reimbursed for the purchase of menstrual care products as defined in Code Section 223(d)(2)(D) and as authorized in Code Section 106(f).

The purpose of this Summary of Material Modification (SMM) is to inform you of a change that has been made to the (name of employer) Flexible Spending Account Plan. This change has also affected the information previously provided to you in the Plan's Summary Plan Description (SPD). This document is both the Plan Amendment and the SMM (the amendment to the SPD). You should keep this SMM with your SPD. The changes described below are effective January 1, 2020. This change is intended to be permanent and applies until subsequently amended.

Eligible over-the-counter (OTC) drugs and medicines are reimbursable without a prescription; and
Eligible items for reimbursement include: menstrual care products, including tampons, pads, liners, cups, sponges, or similar products used by individuals with respect to menstruation or other genital-tract secretions.

Q2 - Is Tylenol or Advil general purpose? Could you buy this without a doctor's note?

A2 - Yes, typically Tylenol or Advil would be considered general purpose and eligible.

OTC purchases do need to be medically necessary to be eligible. There are items that have dual purpose (not medical or for general health but dual purpose) and that's where we might need the doctor's note. Example: A doctor's note to say this individual has this medical condition and I am recommending that they take if this OTC type of medication or drug and be reimbursed.

Q3 - Can a person change their FSA deduction during this year because they planned on dentist/eye appointments that are not happening now?

A3 - An employee may revoke Health FSA elections midyear under a cafeteria plan only as a result of a change in status. A change in status includes termination or commencement of unpaid leave of absence. However, the change in status must result in a change of eligibility for the healthcare plan. For participants who are furloughed by the employer but remain participating in the healthcare plan, although they experience a change in status, revoking a

Health FSA election would not be allowed. Plan sponsors will need to amend the minimum participation rule in the Health FSA plan document to allow for furloughed employees with zero hours/pay to still be eligible for the benefit.

Dependent Care Assistance (DCA)

Q4 - Can employees change their dependent care election since they aren't utilizing it? Does the coronavirus serve as an IRS qualifying reason to alter dependent care FSA contributions (decrease or cancel) due to employees working from home now?

A4 - Midyear DCA election changes are allowed only if the terms of the plan document permit and only for certain specified reasons including significant cost change, change in hours or change in worksite. IRS guidance says that employees may change their elections based on a reduction in the hours of childcare needed (e.g., employee is working from home and not using daycare or has experienced a temporary daycare closure). Reductions in childcare hours needed and lower cost of childcare would permit an election change.

Q5 - Can you please provide guidance or clarification on what defines “his/her child”?

A5 - Under the FFCRA, a “son or daughter” is your own child, which includes your biological, adopted, or foster child, your stepchild, a legal ward, or a child for whom you are standing in loco parentis—someone with day-to-day responsibilities to care for or financially support a child. For additional information go to www.dol.gov//ffcra-questions see Fact Sheet #28B: Family and Medical Leave Act (FMLA) leave for birth, placement, bonding or to care for a child with a serious health condition on the basis of an in loco parentis relationship.

Under the FFCRA a “son or daughter” is also an adult son or daughter (i.e., one who is 18 years of age or older), who has a mental or physical disability, and is incapable of self-care because of that disability. For additional information on requirements relating to an adult son or daughter, see Fact Sheet #28K .

Flexible Spending Accounts (FSA)

Q6 - Can employees revoke their dependent care election and receive reimbursement for monies payroll deducted?

A6 - Mid-year election changes are allowed only if the terms of the plan document permit, and only for certain specified reasons. The IRS guidance provides that employees may elect to change their elections based on a change in the hours of childcare needed.

Employees who are now working from home as a result of their employers’ response to COVID-19 may need fewer hours of childcare for their dependent children. Also, childcare providers may be forced to close during a lockdown. Both cases will reflect reductions in hours of childcare needed and cost of childcare that would likely permit an election change. Similarly, essential employees who now have to use daycare more frequently would have an increase in the hours of childcare needed and, thus, an increase in expense, which would likely permit an election change.

When participants return to normal schedules and again require more or less childcare hours we would look to the same guidance to justify the according increases or decreases in contributions that they may want to make in the future.

Because the guidance from regulation is not specific, we also suggest that clients seek legal counsel.

Q7 - Is there any talk of allowing a plan year change or extension for those on medical FSAs who may lose money since procedures were cancelled?

A7 - For medical FSAs, We have that uniform coverage all available first day, regardless of what you've had salary reduced. There is no exception currently for this kind of a situation. As long as you remain eligible, you can't change your election. But you might be able to elect COBRA and deal with it that way. If you were planning on an elective procedure and those elective procedures have been significantly impacted, you want to look at what else can you pull upon. You can potentially take advantage of the expanded OTC or the expanded eligible reimbursement expenses.

Q8 - To clarify, as a public employer providing a health Flexible Spending Account we would not be required to change our plan doc to cover OTC meds if we chose not to?

A8 – Correct, but keep in mind that if you offer a benefit card you will need to amend your plan documents as OTC medications are now eligible and the card will automatically allow these purchases.

Health Savings Accounts (HSA)

Q9 - What about an extension for FSA/HSA claims when people can't get in for non-COVID related medical treatment?

A9 - The IRS has not issued guidance with respect to this matter. Current regulations do not allow extensions of the grace period. Employers should administer their plans in accordance with their plan documents and current regulations until new guidance is provided by the IRS.

Runout period is at the discretion of the employer and can be extended. If an employer decides to extend the runout period, direction may need to be given to participants to re-file claims.

Emergency Paid Sick Leave and Emergency Family Medical Leave Act (FMLA)

Q10 - Is an employee eligible for Emergency Paid Sick Leave regardless of if the illness is due to COVID?

A10 - Generally no. If you become ill with COVID-19 symptoms, you may take paid sick leave under the FFCRA only to seek a medical diagnosis or if a healthcare provider otherwise advises you to self-quarantine. If you test positive for the virus or are advised by a healthcare provider to self-quarantine, you may continue to take paid sick leave. You may not take paid sick leave under the FFCRA if you decide to self-quarantine for an illness without medical advice, even if you have COVID-19 symptoms. You may not take paid sick leave under the FFCRA if you become ill with an illness not related to COVID-19.

Q11 - How does HIPAA law impact the paid leave provisions?

A11 - The privacy and security rules issued by the Department of Health and Human Services substantially remain in full force. In general, these rules allow a covered entity to disclose protected health information (PHI) in limited circumstances, which include disclosures:

• To an authorized public health authority to collect or receive such information.

• With respect to an FDA-regulated product or activity related to the quality, safety, or effectiveness of the product or activity

• If authorized by law to notify an individual of exposure or risk to exposure as necessary in the conduct of a public health intervention or investigation

Q12 – Do new paid leave requirements also apply to governmental employers (regardless of size)?

A12 - Generally, yes. You are entitled to paid sick leave if you work for a public agency or other unit of government, with the exceptions of public sector healthcare providers and emergency responders. Therefore, you are probably entitled to paid sick leave if, for example, you work for the government of the United States, a State, the District of Columbia, a Territory or possession of the United States, a city, municipality, township, county, parish, or a similar government entity. The Office of Management and Budget (OMB) has the authority to exclude some categories of U.S. Government Executive Branch employees from taking certain kinds of paid sick leave. If you are a Federal employee, seek guidance from your respective employer as to your eligibility to take paid sick leave.

Q13 - What defines being "unable" to work?

A13 - You are unable to work if your employer has work for you and one of the COVID-19 qualifying reasons set forth in the FFCRA prevents you from being able to perform that work, either under normal circumstances at your normal worksite or by means of telework.

If you and your employer agree that you will work your normal number of hours, but outside of your normally scheduled hours (for instance early in the morning or late at night), then you are able to work and leave is not necessary unless a COVID-19 qualifying reason prevents you from working that schedule.

Q14 - Is there a time when the first two weeks are paid at the 2/3 rate for the Emergency Family Leave?

A14 - If you take paid sick leave during the first two weeks of unpaid expanded family and medical leave, you will not receive more than $200 per day or $12,000 for the twelve weeks that include both paid sick leave and expanded family and medical leave. This is when you are on leave to care for your child whose school or place of care is closed, or childcare provider is unavailable, due to COVID-19 related reasons. If you take employer-provided accrued leave during those first two weeks, you are entitled to the full amount for such accrued leave, even if that is greater than $200 per day.

Please note that you can only receive the additional ten weeks of expanded family and medical leave under the Emergency Family and Medical Leave Expansion Act for leave to care for your child whose school or place of care is closed, or childcare provider is unavailable, due to COVID-19 related reasons.

Q15 - I am receiving notes with wrong dates for the leave beginning date. May I ask the employee to go back to their physician and secure the correct dates and identify the medical condition that is affected by COVID-19?

A15 - Yes.

Q16 - Can you pay someone the two weeks sick time if they were assessed by their doctor's office hotline and told they have the symptoms but they are only testing healthcare workers and EMTs and to self-quarantine for two weeks, and if things get worse call your hospital?

A16 - You are eligible for paid sick leave if a healthcare provider directs or advises you to stay home or otherwise quarantine yourself because the healthcare provider believes that you may have COVID-19 or are particularly vulnerable to COVID-19, and quarantining yourself based upon that advice prevents you from working (or teleworking).

Q17 - Are you allowed to work any amount of time while you are on the paid leave?

A17 - Unless you are teleworking, once you begin taking paid sick leave for one or more qualifying reasons, you must continue to take paid sick leave each day until you either use the full amount of paid sick leave or no longer have a qualifying reason for taking paid sick leave. This limit is imposed because if you are sick or possibly sick with COVID-19, or caring for an individual who is sick or possibly sick with COVID-19, the intent of FFCRA is to provide such paid sick leave as necessary to keep you from spreading the virus to others.

If you no longer have a qualifying reason for taking paid sick leave before you exhaust your paid sick leave, you may take any remaining paid sick leave at a later time, until December 31, 2020, if another qualifying reason occurs.

In contrast, if you and your employer agree, you may take paid sick leave intermittently if you are taking paid sick leave to care for your child whose school or place of care is closed, or whose childcare provider is unavailable, because of COVID-19 related reasons. For example, in this situation, you may take paid sick leave on Mondays, Wednesdays, and Fridays to care for your child, but work at your normal worksite on Tuesdays and Thursdays.

Q18 - Is a part-time employee counted the same as a full-time employee when determining how many employees an employer has?

A18 - The Emergency Family and Medical Leave Expansion Act does not distinguish between full-time and part-time employees, but the number of hours an employee normally works each week will affect the amount of pay the employee is eligible to receive.

Q19 - Where do you find the forms for FMLA as of 4/1/20?

A19 - Chard Snyder maintains a leave request form that is provided to the HR department for the employer. We have updated the FMLA Leave Request form that you have generally used, and simply added a new event type called “Public Health Emergency”. This new event type was put in place specifically for those who are unable to work due to caring for a minor son or daughter who has been impacted by a school and/or child-care closure related to the COVID-19 pandemic.

A Doctors assessment of the medical condition is still needed for approval. For normal FMLA conditions a Medical Certification is generally required, this has not changed for those normal FMLA event types. For the expanded FMLA due to school or child-care closure, this can include but is not limited to a proof of school closure, email from daycare director stating the daycare is closed, or some similar form of correspondence sent to the employee by an educational or care facility. These can be provided to us with the leave request form to expedite the process and forego the formal certification exchange that usually takes place.

Q20 - How do you handle an employee who is able to perform their work remotely and has been doing so for over a month while their children's school is closed, but is now saying they are unable to continue working from home and caring for their children because it is too much to handle? Does this qualify under the FMLA expansion?

A20 - If your employer permits teleworking—for example, allows you to perform certain tasks or work a certain number of hours from home or at a location other than your normal workplace—and you are unable to perform those teleworking tasks or work the required teleworking hours because you need to care for your child whose school or place of care is closed, or childcare provider is unavailable, because of COVID-19 related reasons, then you are entitled to take expanded family and medical leave. Of course, to the extent you are able to telework while caring for your child, paid sick leave and expanded family and medical leave is not available.

Q21 - Do railroads have to honor these Emergency FMLA updates?

A21 - Private sector employers are only required to comply with the Acts if they have fewer than 500 employees.

Q22 - Does the FMLA expansion only apply for employers with less than 500 employees?

A22 - If you have more than 500 employees, there isn’t anything you have to do for the emergency paid sick leave or EFMLA. The assumption was that employers who have 500 or more employees would be doing something like this anyway. There haven't been any statistics on that. So if you are 500 or more employees, you do not have to comply with this. But if close to 500, make sure that you are following the definitions very carefully, because this is not a full-time equivalents type of count. This is number of employees.

Q23 - Can this leave be intermittent like regular FMLA? So actually they get 400 hours of leave? Can an employee work most of their day but leave early (say an hour early) to care for children when the other parent has to go to work and be paid under the 2/3 pay for that hour?

A23 - Yes, if your employer allows it and if you are unable to telework your normal schedule of hours due to one of the qualifying reasons in the Emergency Paid Sick Leave Act. In that situation, you and your employer may agree that you may take paid sick leave intermittently while teleworking. Similarly, if you are prevented from teleworking your normal schedule of hours because you need to care for your child whose school or place of care is closed, or childcare provider is unavailable, because of COVID-19 related reasons, you and your employer may agree that you can take expanded family medical leave intermittently while teleworking.

You may take intermittent leave in any increment, provided that you and your employer agree. For example, if you agree on a 90-minute increment, you could telework from 1:00 PM to 2:30 PM, take leave from 2:30 PM to 4:00 PM, and then return to teleworking.

Employers and employees are encouraged to collaborate to achieve flexibility and meet mutual needs, and the Department of Labor is supportive of such voluntary arrangements that combine telework and intermittent leave.

Q24 - I work for a local public health department and it was my understanding that even though we are a public agency and would be eligible normally, we are considered "emergency responders" and our employees can be excluded from the FFCRA? Is this correct?

A24 - For the purposes of employees who may be excluded from Paid Sick Leave or Expanded Family and Medical Leave by their employer under the FFCRA, an emergency responder is anyone necessary for the provision of transport, care, healthcare, comfort and nutrition of such patients, or others needed for the response to COVID-19. This includes but is not limited to military or national guard, law enforcement officers, correctional institution personnel, fire fighters, emergency medical services personnel, physicians, nurses, public health personnel, emergency medical technicians, paramedics, emergency management personnel, 911 operators, child welfare workers and service providers, public works personnel, and persons with skills or training in operating specialized equipment or other skills needed to provide aid in a declared emergency, as well as individuals who work for such facilities employing these individuals and whose work is necessary to maintain the operation of the facility. This also includes any individual whom the highest official of a State or territory, including the District of Columbia, determines is an emergency responder necessary for that State’s or territory’s or the District of Columbia’s response to COVID-19.

Q25 - If an employee is on the emergency FMLA and then is furloughed, does the time they are off work count toward the 12 weeks?

A25 - No. The EFMLEA is a paid leave for employees who cannot work or telework due to having to care for a minor child whose school or childcare is closed due to the COVID crisis. The employee who is furloughed cannot work because they have a reason other than the qualified reason for EFMLEA.

Q26 - If an employee uses the paid sick leave for the two-week unpaid period under EFMLA, how do you enter the two-week unpaid for EFMLA when the paid sick leave is being used?

A26 - This is handled similar to regular FMLA when the employee exhausts PTO and FMLA at the same time.

Q27 - If someone is off for two weeks due to doctor’s orders for COVID reasons and they are paid under the Expanded FMLA, the employer is only required to pay them for the two weeks and after that the employee should go onto unemployment if they can't return to work? There is no other pay required under these regulations, correct?

A27 - Expanded FMLA is not available to an employee that is absent due to doctor’s orders.

The employee may be eligible for Emergency Sick Paid Leave for the first two weeks (ten days of work or 80 hours). However, that employee may be eligible also for regular unpaid FMLA for 12 weeks (the first two weeks are paid emergency sick paid leave). If the doctor’s orders are for more than two weeks, the employee may remain on leave for the duration of the period of leave recommended by the doctor (up to 10 weeks in addition to the first two weeks of paid emergency sick leave). There is no other pay required under these regulations.

Plan Documents

Q28 - If Chard Snyder is our administrator, will changes be automatically made to our SPD/summary materials?

A28 – If Chard Snyder handles your Plan Documents, we will work with you to amend your Documents and SPDs.

Insurance Premiums

Q29 - Can we still require employees who take this leave to repay their portion of the employee benefit premiums during the leave or upon their return, in accordance with our company policy?

A29 - Any payroll deductions through an FSA are stopped for furloughed employees, or participants may revoke coverage while on leave. However, if their enrollment is not disrupted, once they return to “pay status” they can resume deductions. Any missed deductions from paychecks would be made-up or recalculated over remaining pay periods to match a yearly FSA contribution.

Q30 - Is there any legislation putting a cap in place for employers on insurance premiums in the near future? How can we insure that our future rates are not adversely effected by the coronavirus coverage?

A30 - COVID-19 has no cost sharing down to the individual and the cost sharing between the health plan provider and the services provider. It gives you an idea that all of these are going to be increased required benefits, which means there probably is going to be an effect on premiums at some point. We don't have anything on the books right now that is going to stop or cap or limit the timeframe within which those increased costs are going to be passed back down and reflected as increase premiums to both the employer and the employee. So stay tuned on that one.

Medical Necessity

Q31 - Besides the stop loss concern, are you saying treatment to help some get better is not considered automatically medically necessary?

A31 - That's part of the problem. Because what's going to happen if you have a high deductible health plan that requires the deductible to be matched before the plan pays anything? That's where we're getting into issues if you want to have the plan pay not only the diagnostic but also the preventive care. If we want to cover treatments, then that treatment is going to be handled under the regular HDHP provisions which are going to say you don't cover anything until you hit the deductible.

Once the person has been diagnosed with COVID-19, the plan is now in treatment phase and that's not going to be preventive care. And there was concern that if they go in for COVID testing, for example, it's going to be covered, but if they find out that they have the disease and it warrants self-quarantine at home, but treatment requires going into the hospital. That's not covered until the deductible has been met. Some plans have taken the steps to actually cover more than the preventive care aspects.

Q32 - But when you outsource to Chard Snyder, will you question each OTC purchase for medical necessity? General health is not covered. How will you know or will you ask for a medical necessity proof each time?

A32 - OTC purchases do need to be medically necessary to be eligible. There are items that have dual purpose (not medical or for general health but dual purpose) and that's where we might need the doctor's note. Example: A doctor's note to say this individual has this medical condition and I am recommending that they take if this OTC type of medication or drug and be reimbursed.

Q33 - Do mental health providers and mental health office staff count as healthcare workers?

A33 - For the purposes of employees who may be exempted from Paid Sick Leave or Expanded Family and Medical Leave by their employer under the FFCRA, a healthcare provider is anyone employed at any doctor’s office, hospital, health care center, clinic, post-secondary educational institution offering health care instruction, medical school, local health department or agency, nursing facility, retirement facility, nursing home, home health care provider, any facility that performs laboratory or medical testing, pharmacy, or any similar institution, employer, or entity. This includes any permanent or temporary institution, facility, location, or site where medical services are provided that are similar to such institutions.

This definition includes any individual employed by an entity that contracts with any of these institutions described above to provide services or to maintain the operation of the facility where that individual’s services support the operation of the facility. This also includes anyone employed by any entity that provides medical services, produces medical products, or is otherwise involved in the making of COVID-19 related medical equipment, tests, drugs, vaccines, diagnostic vehicles, or treatments. This also includes any individual that the highest official of a State or territory, including the District of Columbia, determines is a health care provider necessary for that State’s or territory’s or the District of Columbia’s response to COVID-19.

Non-Profit

Q34 - Is there guidance on how CARES Act benefits will be distributed to non-profits?

A34 - Under the CARES Act (Coronavirus Aid, Relief, and Economic Security Act), the federal government will pay 50% of the reimbursable unemployment benefits from March 13, 2020 through December 31, 2020 for those non-profit employers that use the “reimbursement method” for paying unemployment benefits (these non-profit employers opted to pay the cost of any unemployment compensation in exchange for not paying unemployment insurance premiums). The CARES Act allows states flexibility in collecting the remaining 50%.

Tax Credits

Q35 - Are tax credits available to employers who are continuing benefits for employees that were temporarily laid off?

A35 - No. If employees are being laid off due to a temporary business slowdown or a mandated business closure, this type of leave is not available to them and correspondingly the tax credits are not available to the employer. The FFCRA provides tax credits to cover certain costs of providing employees with required paid sick leave and expanded family and medical leave for reasons related to COVID-19, from April 1, 2020, through December 31, 2020. If the amounts being paid by the employer are voluntarily being paid and not required under FFCRA, then the tax credit is not available.

Q36 - Can you clarify the qualified wages for the tax credit? If this is the Employee Retention Tax Credit, then my understanding is its all wages up to 50% of $10,000 per employee?

A36 - For tax credits under FFCRA: Qualified sick leave wages are wages that the FFCRA requires an employer to pay to an employee who is unable to work or telework because of either the employee’s personal health status (that is, the employee is under COVID-19 quarantine or self-quarantine or has COVID-19 symptoms and is seeking a medical diagnosis) or the employee’s need to care for others (that is, the employee is caring for someone with COVID-19 or for a child whose school or place of care is closed or childcare provider is unavailable). Qualified family leave wages are wages that the FFCRA requires an employer to pay to an employee who is unable to work or telework because the employee is caring for a child whose school or place of care is closed or childcare provider is unavailable due to COVID-19-related reasons.

For the Employee Retention Credit: The definition of qualified wages depends on how many employees an eligible employer has. If an employer averaged more than 100 full-time employees during 2019, qualified wages are generally those wages, including certain healthcare costs, (up to $10,000 per employee) paid to employees that are not providing services because operations were suspended or due to the decline in gross receipts. These employers can only count wages up to the amount that the employee would have been paid for working an equivalent duration during the 30 days immediately preceding the period of economic hardship. If an employer averaged 100 or fewer full-time employees during 2019, qualified wages are those wages, including health care costs, (up to $10,000 per employee) paid to any employee during the period operations were suspended or the period of the decline in gross receipts, regardless of whether or not its employees are providing services.

An eligible employer's ability to claim the Employee Retention Credit is impacted by other credit and relief provisions as follows: (1) If an employer receives a Small Business Interruption Loan under the Paycheck Protection Program, authorized under the CARES Act, then the employer is not eligible for the Employee Retention Credit. (2) Wages for this credit do not include wages for which the employer received a tax credit for paid sick and family leave under the Families First Coronavirus Response Act. (3) Wages counted for this credit can't be counted for the credit for paid family and medical leave under section 45S of the Internal Revenue Code. (4) Employees are not counted for this credit if the employer is allowed a Work Opportunity Tax Credit under section 51 of the Internal Revenue Code for the employee.

Section 139

Q41 - What is Section 139 and what does it mean to me?

A41 - Disaster relief payments under IRS Section 139 was originally created after 9/11/2001. COVID-19 falls under this federal disaster category, which allows employers to offer tax free funds and offer financial assistance to their employees through 12/31/2020, subject to further government action.

Employees easily access their funds in the form of a convenient debit card, either their Chard Snyder benefit card or the SpeedLift care card, supported by a simple, online experience. Unlike existing CDH the SpeedLift Care Card can be used for non-healthcare expenses. All medical, transit, and childcare expenses can utilize the Chard Snyder benefit card.

Q42 - As an employer, how does it work?

A42 - A new HRA expressly to help preserve consumer HSA dollars. It can be offered as a new benefit under for an employer.

Q43 - What can employees buy?

A43 - All expenses need to be for necessary family, personal, or living expense incurred as a result of the COVID-19 disaster. It can be used for groceries, utilities, gas, cleaning/sanitizing products, work from home expenses such as computer equipment or office supplies, etc. This program provides ready access to funds when needed, with limited merchants to control where funds are used for the SpeedLift Care card.

There are specific items that are not eligible by the IRS Section 139 for disaster relief payments including any items that are covered by insurance, lost wages/severance, and sick and family leave.

Q44 - Do I need a card to buy these items?

A44 -Employees will need the SpeedLift care card to access funds for:

Working from Home - Internet, Computer and Related Equipment, Cell Phone, Furniture, Office Supply, Other Required Expenses, and Utility expenses.
Lifestyle wellness - Exercise Footwear, Home Gym and Sports Equipment, Nutritional Programs and Classes, On-line Exercise Internet, Computer and Related Equipment, Cell Phone, Furniture, Office Supply, Other Required Expenses, and Utility expenses.
An Emergency Leave - Electric, Gas/Propane (Utility), Grocery, Internet, Meal Delivery Service and Kits, Phone, Refuse/Recycling, Rent/Mortgage, Vehicle, Water/Sewer, and Other expenses

In addition to these, an employer can offer these HRA accounts to cover:

Medical –Testing and treatment of COVID-19, Ambulance, Doctor, Hospital, Laboratory, Other Medical Service expenses, Telemedicine, and X-ray expenses.
Childcare –Babysitting/Child Care, Tutoring, Child Care Finder Services, Digital/Distance Learning Expenses, and Other Child Care Services.
Transit –Parking, Gas, Employer Approved Maintenance, and Other Transit expenses.

If an employer chooses to offer a medical, childcare, transit accounts, employees can continue to use their Chard Snyder benefits card. Claims can be submitted for reimbursement via our employee portal or mobile app.

Q45 - Do employees need to save my receipts for these items?

A45 - IRS Section 139 does not impose any requirements for recordkeeping or substantiation that the payments were for qualifying expenses. However, it is highly encouraged that employers maintain adequate records of such payments to substantiate any deduction taken.