The IRS is taking steps to respond to the COVID 19 virus. Additional steps and guidance are expected.
One of the requirements for making pre-tax contributions to a Health Savings Accounts (HSA) is that the HSA owner be enrolled in a high deductible health plan (HDHP) through his employer. There has recently been concern that coverage for COVID 19 testing may disqualify a plan as an HDHP if coverage is provided without regard to minimum deductibles or cost sharing requirements. Notice 2020-15 makes clear that an employer can provide coverage for COVID 19 related expenses prior to the satisfaction of a minimum deductible or cost sharing without changing the HDHP status of a health plan. The notice provides employers flexibility to cover COVID 19 testing and related costs without concern for causing adverse tax consequences to employees that contribute to HSAs. The notice does not create a requirement that COVID 19 related costs be covered by an employer health plan.
Other possible remedies
It is unclear what other remedies may be provided in the coming weeks or months. These may include some form of tax forgiveness measure like the cancellation of 2009 required minimum distributions following the crash of 2008 or further changes to hardship distributions from qualified retirement plans. Kerr Russell employment attorneys will be summarizing new developments as they arise.
A good time to review employer plans
Employers should be prepared to answer question about the extent of coverage under employee health plans. Employee retirement plans should be reviewed to determine whether cost saving changes should be considered. If the current threat has a lasting effect on economic conditions, plans drafted in times of less uncertainty may need to be revised.
An employer having questions about how the COVID 19 threat may affect employer plans and policies should contact a Kerr Russell attorney.
Mark C. Knoth chairs the firm’s Labor, Employment, Employee Benefits & ERISA Practice Group. He counsels and advises business owners, managers and human resources professionals on workplace issues. These include civil rights and anti-discrimination laws; employee discipline; wage and hour; overtime; employee leaves; reasonable accommodations; veterans issues; picketing; secondary boycotts; reductions in force; drug testing; unemployment compensation; affirmative action; and union organizing campaigns, among other matters. He additionally drafts employee policies, handbooks, contracts, and covenants not to compete, and investigates threats of violence, allegations of harassment, and other employee misconduct.
Olivia V. Hankinson counsels and advises business owners, managers and human resources professionals on various labor and employment related issues. These often involve concerns which may implicate employment laws including the Americans with Disabilities Act, Title VII of the Civil Rights Act, the Fair Labor Standards Act, the Michigan Persons with Disabilities Civil Rights Act, the Family and Medical Leave Act, the National Labor Relations Act, and the Michigan Occupational Safety and Health Act. Olivia represents employers with respect to unemployment insurance hearings, MIOSHA violation allegations, EEOC investigations, and other employment law matters. She also drafts employee handbooks, employment agreements, restrictive covenants, and various other employment policies.
Liam K. Healy focuses his practice on helping clients maintain compliance with the myriad of state and federal tax laws and regulations that govern individuals and businesses. A particular focus of Liam’s practice is in the area of employee benefits and ERISA. Liam specializes in designing pension and executive compensation plans to benefit business owners and executives. His practice includes drafting and reviewing deferred compensation agreements, severance agreements and non-compete agreements, representing employers in multi-employer plan collection and withdrawal liability matters.
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