A Message to Our Clients.
As we are all aware, the spread of the coronavirus (COVID-19) is impacting businesses, families, and financial markets worldwide. We know that many of you and your employees have the potential to be impacted and we share your concerns about public health and safety and business continuity.
In the event of the worst-case scenario, where strategic quarantine is necessary, please rest assured that The Capital Group has taken all the necessary steps to ensure uninterrupted service to all our clients as we collectively traverse this situation. In fact, we run drills several times a year to test and monitor the effectiveness of our disaster recovery plan. We have a vigorous IT infrastructure in place that supports our employees to provide continuous delivery of services from anywhere, and we’ve increased our already strong information security protections.
Over the course of the next several weeks, and longer if necessary, you will continue to receive News Flashes from us that contain important information from our carrier partners about the latest updates to your coverage regarding COVID-19. We will also be addressing questions regarding how disability insurance coverage and FMLA come into play for affected employees.
The links below provide some of the latest information from our carrier partners as well as pertinent government agencies related to labor laws and regulations that may be applicable. Please do not hesitate to reach out to us with any questions or concerns. We will be here to help answer questions and to support you and your employees.
Thank you for your continued trust in The Capital Group and we wish you the best during these interesting times.
PPP Loan Forgiveness
This past week we saw in a rare display of bipartisanship, the House passed (by a vote of 417-1), the Senate approved and President Trump signed into law the Paycheck Protection Program Flexibility Act (PPPFA) in an attempt to help address many of the concerns that were voiced by the small and mid-sized business community around the original Paycheck Protection Program (PPP) which sought to provide COVID-19 relief. A full accounting of the new law can be found on our COVID-19 web page PPPFA, but here are the major changes/provisions:
- Extends the PPP loan forgiveness period to include costs incurred over 24 weeks after a loan is issued or through Dec. 31, whichever comes first.
- Extends a period in which loans can be forgiven if businesses restore staffing or salary levels that were previously reduced from June 30 to December 31. The provision would apply to worker and wage reductions made from Feb. 15 through 30 days after enactment of the CARES Act, which was signed into law on March 27.
- Maintains forgiveness amounts for companies that document their inability to rehire workers employed as of Feb. 15, and their inability to find similarly qualified workers by the end of the year. Companies would be covered separately if they show that they couldn’t resume business levels from before Feb. 15 because they were following federal requirements for sanitization or social distancing.
- Requires at least 60% of forgiven loan amounts to come from payroll expenses, such as gross payroll, benefits and retirement contributions (decrease from the current 75% required), therefore the new non-payroll portion of a forgivable covered loan amount is now 40% (up from 25%).
- Repeals a provision from the CARES Act that barred companies with forgiven PPP loans from deferring their payroll tax payments.
- Allows borrowers to defer principal and interest payments on PPP loans until the SBA compensates lenders for any forgiven amounts, instead of the current six-month deferral period. Borrowers that don’t apply for forgiveness would be given at least 10 months after the program expires to start making payments.
- Establishes a minimum loan maturity period of five years following an application for loan forgiveness, instead of the current two-year deadline set by the SBA. That provision would apply to PPP loans issued after the measure is enacted, though borrowers and lenders could agree to extend current loans.
Roughly $130 billion remains from the second round of $320 billion that Congress approved for PPP. There was concern that the legislation could be interpreted as preventing businesses from receiving full loan forgiveness if they spend less than 60% of their PPP funds on payroll expenses. Under the current regulations, a business that does not meet the payroll threshold of 60%, is still eligible to receive partial forgiveness. Additionally, Marco Rubio and Ben Cardin (D-MD) of the Senate Small Business Committee drafted a letter to Treasury Secretary Mnuchin and SBA Administrator Carranza requesting their respective agencies to provide additional data and reporting on the PPP, EIDL, and Small Business Debt Relief programs. For those of you who are policy wonks, you can read all of the details here.
If you missed our live PPP Loan Forgiveness Webinar last week with our panel of experts, please click on it and watch the recording. Stay tuned for Part II, date to be announced soon, where we will be answering your questions on the provisions of newly passed PPPFA. More to come shortly….
If you have any questions on the new legislation, our in-house legal and compliance departments stand at the ready to help. Please feel free to reach out to Alice Weakly at email@example.com to schedule a time to talk with a member of our team.
PPP Loan Forgiveness
On May 15th, the Small Business Administration (SBA) released the application for Paycheck Protection Program loan forgiveness. The 11-page document provides much-needed clarity on items like the definition of full-time hours and the various time periods for calculations. But it’s hard to follow…the dense language, multiple tables, calculations, and exemptions make the application a headache to understand. We’ve put together a Q&A of the most commonly asked questions…but don’t worry, we are going to break it all down for you on June 3rd.
When can my staff return to the office or workplace as per CDC Guidelines?
As both states and the Federal Government continue to discuss plans to reopen the country, the Centers for Disease Control (CDC) recently unveiled new guidance for businesses on how employees could return to work. The CDC outlines how business owners can help to determine which staff members are ready to return to work, when, and under what conditions. Their recommendations outline different scenarios based on the employee’s current or recent-past health status with regard to COVID-19. We have broken important parts of their guidance down for easy reading: Click Here for Details
What about employee privacy?
While Health Insurance Portability and Accountability Act (HIPAA) rules generally prohibit asking employees about their health, the Equal Employment Opportunity Commission (EEOC) has confirmed that employers have the right to request health information from workers during the COVID-19 outbreak. Employers may ask if employees are experiencing fever, chills, cough, shortness of breath, or a sore throat. That being said, please be sure to maintain all health information as a confidential medical record in compliance with the Americans with Disabilities Act (ADA).
It is important for employers to know how to disclose information about COVID-19 and How to Protect Employee Privacy during the pandemic.
Updated COBRA Regulations
US Department of Labor (DOL) in conjunction with the Internal Revenue Service (IRS) issued a final rule extending certain employee benefits deadlines, including COBRA, so plan participants, beneficiaries and employers have additional time to make important decisions that affect benefits during the COVID-19 outbreak. Specifically:
– The 60-day election period for COBRA continuation coverage
– The date for making COBRA premiums payments
– The date for individuals to notify the plan of a qualifying event or determination of disability
CLICK HERE for more details.
An overview of COVID-19 regulatory activity by state.
As a leader in the Insurance Industry, we take our responsibility to constantly monitor the legislative and regulatory landscape seriously, and keeping you informed of this activity is fundamental to our partnership. Federal and state activity has escalated due to this crisis, and this overview of state Department of Insurance actions will help you see the full picture of what’s happening. CLICK HERE to see the latest regulations by state.
The Big Picture-PPP, EIDL, EEIG, FFCRA Which program will work for me?
In order to assist our clients of all sizes, we have put together a chart outlining all of the programs available under CARES including: Paycheck Protection Program (PPP), Economic Injury Disaster Loan (EIDL), Emergency Economic Injury Grant (EEIG), Pandemic Unemployment Assistance Program (PUA), Economic Impact Payments and the FFCRA. We call it the “Big Picture” and you can click on it here: Big Picture CARES Act Comparisons
PPP Interim Rules and Regulations
This interim final rule announces the implementation of sections 1102 and 1106 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act or the Act). Section 1102 of the Act temporarily adds a new product, titled the ‘‘Paycheck Protection Program,’’ to the U.S. Small Business Administration’s(SBA’s) 7(a) Loan Program. Section 1106 of the Act provides for forgiveness of up to the full principal amount of qualifying loans guaranteed under the Paycheck Protection Program.
CLICK HERE for more information
Qualified Disaster Relief IRS Section 139
EMPLOYERS CAN NOW PROVIDE TAX-FREE QUALIFIED DISASTER PAYMENTS TO EMPLOYEES IN CONNECTION WITH COVID-19
Employers are scrambling to find ways to help their employees who are impacted by the novel coronavirus (COVID-19). Help is available. Now that the COVID-19 has been declared a national emergency, Internal Revenue Code Section 139 can be used to allow employers to make tax-free payments or reimbursements to employees as “qualified disaster payments.” Click the link below to see some frequently asked questions about how employers can use Section 139 immediately to help employees cope with COVID-19.
CLICK HERE for more information
DC Council Adopts Expanded Sick Leave, Unemployment Amendments
NOTE: Because the COVID-19 situation is dynamic, with new governmental measures each day, employers should consult with counsel for the latest developments and updated guidance on this topic.
On April 7, 2020, the D.C. Council unanimously passed its second emergency COVID-19 relief bill, the COVID-19 Response Supplemental Emergency Amendment Act of 2020 (Emergency Act), addressing a variety of programs and protections for residents.1 Significant for employers, the Emergency Act expands the District’s unemployment insurance program to take advantage of federal legislation and creates new paid sick leave entitlements for District employees working for mid-sized employers. The Emergency Act will become effective upon Mayor Bowser’s signature and remain in effect for a period of no more than 90 days.
PPL vs EIDL What’s the difference?
The CARES Act tasks the Small Business Administration with overseeing the distribution of millions of dollars in loans and grants to help small businesses survive the pandemic. It also provides additional funding for SBA’s Resource Partners to provide advice and training to help small businesses respond to the unprecedented challenges in communities throughout the country.
Review of the Families First Coronavirus Response Act FFCRA & Coronavirus Aid, Relief, and Economic Security Act – CARES Act
Presented on Apr 03, 2020
|CLICK HERE TO REPLAY THE PRESENTATION|
Replay a discussion with our legal panel for an analysis of the recently passed First Families Coronavirus Response Act “FFCRA” and the “CARES” – the Coronavirus Aid, Relief, and Economic Security Act. These acts, totaling over 2 trillion dollars in economic stimulus, are meant to broadly address the economic impacts of, and otherwise respond to, the COVID-19 outbreak within the United States. We outlined the particulars of the legislation’s impact on Employees, Human Resource Managers, COVID-19 related HR polices, and Businesses.
Kevin FitzPatrick, Partner at The Capital Group and CEO of GovTech
Andrew Beardall, Esq., General Council at The Capital Group
Stephen Stern, Esq., Partner at Kagan Stern Marinello & Beard, LLC
See how the major insurance companies are easing the burden of premium payments during the COVID-19 Pandemic.
“Our goal is to ensure we have adequate access to the protective equipment and medical supplies needed for the screening and treatment of COVID-19 patients now and over the long run,” said Dr. Witt. “We are humbled by the outpouring of support we have received from our communities and business partners to help source additional supplies.” Please see the information and guidelines for donating or becoming a new vendor if you wish to contribute to this effort.
Click HERE for the entire article.
BEST PRACTICES FOR HIPAA COMPLIANCE WHEN WORKING FORM HOME
Now that you have employees working from home it is more important than ever to make sure to comply with HIPAA regulations.
Steps your company should take: CLICK HERE
COVID19 Stimulus Relief Package “The Cares Act”
The Paycheck Protection Program application is now live – see links below. Small businesses and eligible nonprofit organizations, veterans’ organizations, as well as individuals who are self-employed or independent contractors, are eligible if they also meet program size standards. As a reminder, this is the new program where SBA will forgive the portion of the loans used for payroll, rent, utilities, etc. if all employees are kept on payroll for eight weeks. Links to the application and other information below:
- For a top-line overview of the program click HERE
- The application for borrowers can be found HERE
- If you’re a borrower, more information can be found HERE
- If you’re a lender, more information can be found HERE
- More information from the Treasury can be found HERE
The C.A.R.E.S. Act becomes law. What you need to know regarding your Retirement Account
On March 27, 2020, the C.A.R.E.S. Act (Coronavirus Aid, Relief and Economic Security Act) was signed into law. The new legislation is designed to pump more than $2 trillion into the U.S. economy by providing support to American Workers and businesses. Included in the legislation are several provisions that impact employer-sponsored retirement plans.
RETIREMENT ACCOUNT DISTRIBUTIONS
Required minimum distributions from retirement accounts are waived for the calendar year 2020.
This is good news for individuals who do not rely on their required minimum distributions for daily living expenses and who otherwise may be required to liquidate retirement account assets in a down market to fund required minimum distributions. In addition, funds will remain in the retirement account for an additional year earning income and potentially growing/recovering tax-free.
RETIREMENT ACCOUNT WITHDRAWALS
- The 10% penalty for early withdrawal from retirement accounts has been temporarily lifted for withdrawals up to $100,000 for any taxable year. Anyone with a coronavirus diagnosis, whose spouse or dependent is diagnosed, or who is quarantined, furloughed, laid off or has reduced hours or is unable to work due to lack of childcare qualifies for the distribution.
- Amounts distributed may be repaid at any time during the three years following the distribution.
- The tax on any taxable amount of a distribution may be spread over three years.
- The permitted loan amount from qualified employer plans is increased from $50,000 to $100,000. Outstanding loan repayments due before the end of 2020 are delayed for one year.
This is relief, but it is relief with limitations. Certainly, if there is a pressing need for money to cover expenses, being able to withdraw from a retirement account without penalty is helpful. However, every dollar withdrawn will lose the benefit of tax-free income and growth, which will reduce the funds available for retirement when the time comes. Plan participants should exercise caution in making early withdrawals and consider what other sources of funds are available before deciding. If they proceed, they should make every effort to meet the three-year window for repayment.
These provisions will require changes to record keeping operations and amendments to you plan documents. The Act includes relief for plan amendments by generally giving plans until at least the end of the 2022 plan year (or later as Treasury provides) to adopt amendments. We will be working with your record Keeper and will provide you with this amendment for your records when required.
As always, if you have any questions, please call us at 1-866-915-5192. Or email us at firstname.lastname@example.org
CLICK HERE for Carrier Premium Relief Guidelines
The links below provide some of the latest information from our carrier partners.
- United Healthcare
- The Hartford
- Lincoln Financial
- Mutual of Omaha
- Reliance Standard
Carrier Guidelines for Premium Relief: Premium Relief
Families First Coronavirus Response Act Update
The US DOL released new information regarding the Families First Coronavirus Response Act (FFCRA), including how:
- Employers count the number of their employees to determine coverage
- Employers count hours for part-time employees
- Employers calculate wages employees are entitled to under this law
- Small businesses obtain an exemption
Use these helpful guides for details:
Downloadable Poster for your worksite: EMPLOYEE RIGHTS PAID SICK LEAVE AND EXPANDED FAMILY AND MEDICAL LEAVE UNDER THE FAMILIES FIRST CORONAVIRUS RESPONSE ACT
This new law applies to emergency paid leave under the Family and Medical Leave Act (FMLA) and emergency paid sick leave. The law only applies to employers with fewer than 500 employees and is effective April 2, 2020 through December 31, 2020. Find full details here.
First Family Coronavirus Response Act (FFCRA): FFCRA Flow Chart
More Resources explaining the stimulus and recovery programs related to COVID 19
Our COVID-19 Resource Page contains a wealth of reference materials in regards to client resources. Listed below is a quick reference guide to the most commonly asked questions from the prior two weeks:
Payroll Protection Act (PPP) simplified explanation: What is PPP Simplified
Payroll Protection Act (PPP) expanded explanation: PPP Expanded Overview
Health Savings Accounts in the News COVID-19
HSA Contribution Deadline Extended to July 15, 2020
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. The posting of these new FAQ items (#17, #20, and #21) gives the guidance that has been awaited regarding contributions for 2019.
- IRS is allowing HSA owners to use funds in their HSA to pay medical expenses associated with COVID-19 testing and treatment prior to their health plan’s deductible being met.CLICK HERE to read IRS Notice 2020-15 “High Deductible Health Plans and Expenses Related to COVID-19”.1
- One of the components of the $2.2 trillion stimulus bill the US Senate passed last week (“Coronavirus Aid, Relief, and Economic Security Act”) allows HSA owners to use funds in their HSA to pay for Telehealth Services irrespective if the deductible on their HDHP has been met. CLICK HERE to read a Forbes article (3/25) that highlights components of the stimulus package.
While the IRS is viewing expenses associated with COVID-19 as a qualified medical expense, major health plans have waived member cost-sharing, including copays, coinsurance, and deductibles for COVID-19 diagnostic testing provided at approved locations in accordance with CDC guidelines for all commercial insured, Medicaid and Medicare members. In addition, many self-insured companies are choosing to implement similar actions.
Kaiser Permanente is prepared
Kaiser Permanente is working closely with local and national agencies to monitor and respond to the novel coronavirus pandemic.
COVID-19 can be fatal in a small percentage of those who get it, David Witt, MD, national infectious disease leader at Kaiser Permanente, recommends taking a cautious and calm approach — know the latest, know your risk, and know how to protect yourself and others.
“Kaiser Permanente has confronted highly infectious diseases for years, and we are confident we can safely treat patients who have been infected with this virus with limited risk to other patients, members, visitors, and employees,” said Dr. Witt. “However, as the COVID-19 situation rapidly advances, the demands on the health care system threaten to exhaust our supplies, equipment, and our people.”
To prepare for an anticipated surge in the number of people who will need care, Kaiser Permanente is actively engaged in a nationwide planning effort to ensure our facilities, resources, and staff are prepared for this demand. Here’s what we’ve implemented thus far:
- Telehealth options: We’re proactively extending the use of telehealth appointments via video and phone where appropriate. This allows people to stay home and still get great care while helping address the community spread of COVID-19 and easing the global shortage of personal protective equipment — masks, gowns, and gloves. We’re also encouraging the use of our mail-order pharmacy service to help members avoid unnecessary outings.
- Consolidation to meet critical needs: In some areas, we’re closing or minimizing services at our medical office buildings as we convert to telehealth appointments. By temporarily consolidating, we can support a potential surge in the number of people who need hospitalization, meet the critical need to conserve personal protective equipment and limit exposure to the virus for both members and employees. Our urgent care and medical centers are open and operating and remain safe places to be.
- Careful supply management: We’ve been prudently managing our resources for weeks, ensuring we have had adequate access to protective equipment and medical supplies needed for the screening and treatment of patients with potential and confirmed COVID-19 infections. As the virus is spreading quickly through many communities, we’ve gone from screening a few patients a day to screening hundreds, and our equipment and supply needs have increased dramatically as a result. We are carefully managing supply access in each of our facilities, and we continue to secure additional supplies through traditional as well as innovative means, such as making face shields and working with small businesses in the garment industry to begin making masks for Kaiser Permanente.
Virginia Governor Northam Issues Statewide Stay at Home Order
RICHMOND—Governor Ralph Northam today issued a statewide Stay at Home order to protect the health and safety of Virginians and mitigate the spread of the novel coronavirus, or COVID-19. The executive order takes effect immediately and will remain in place until June 10, 2020, unless amended or rescinded by a further executive order.
The order directs all Virginians to stay home except in extremely limited circumstances. Individuals may leave their residence for allowable travel, including to seek medical attention, work, care for family or household members, obtain goods and services like groceries, prescriptions, and others as outlined in Executive Order Fifty-Three, and engage in outdoor activity with strict social distancing requirements.
Maryland’s Governor Larry Hogan Declares State of Emergency, Expands Statewide Response to Novel Coronavirus
Three Confirmed Maryland Cases in Montgomery County, Patients In Quarantine And In Good Condition
ANNAPOLIS, MD—Tonight, Governor Larry Hogan announced the state’s first positive cases of novel coronavirus (COVID-19) and declared a state of emergency to ramp up Maryland’s coordinated response across all levels of government.
“In order to further mobilize all available state resources in response to this threat to public health, I have issued a proclamation declaring a state of emergency in Maryland,” said Governor Hogan. “With this declaration, I am officially authorizing and directing the Maryland Department of Health and the Maryland Emergency Management Agency to ramp up coordination among all state and local agencies and enable them to fast-track coordination with our state and local health departments and emergency management teams.”
Mayor Bowser Issues Stay-At-Home Order
Monday, March 30, 2020
(Washington, DC) – Today, due to an increasing number of coronavirus (COVID-19) cases in Washington, DC and across the region and the nation, Mayor Muriel Bowser issued a stay-at-home order for the District of Columbia. This order reinforces the Mayor’s direction to residents to stay at home except to perform essential activities.
The Mayor’s Order specifies that residents may only leave their residences to:
- engage in essential activities, including obtaining medical care that cannot be provided through telehealth and obtaining food and essential household goods;
- perform or access essential governmental functions;
- work at essential businesses;
- engage in essential travel; or
- engage in allowable recreational activities, as defined by the Mayor’s Order.
Any individual who willfully violates the stay-at-home order may be guilty of a misdemeanor and, upon conviction, subject to a fine not exceeding $5,000, imprisonment for not more than 90 days, or both.
The stay-at-home order goes into effect on April 1, 2020 at 12:01 am.
For more information on the District’s COVID-19 response and recovery efforts, visit coronavirus.dc.gov.
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