Topic: COVID-19

Governance Issues for Retirement Plan Sponsors Due to “Opt-Out” Amendments

On March 27, 2020, President Trump signed the Coronavirus Aid, Relief, and Economic Security Act or the “CARES Act”, into law.  We discussed the employee benefit plan provisions included in the CARES Act in our Quick Study published last week, which can be found here.  For sponsors of defined contribution plans, these provisions include: coronavirus-related distributions, which are a new form of distribution, relaxed loan provisions, and suspension of 2020 required minimum distributions (a brief summary of these provisions is provided in the second part of this blog post).

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Employers May Offer Tax-Free Financial Assistance to Employees Affected By Coronavirus under Internal Revenue Code Section 139

On March 13, 2020, President Trump declared a national emergency under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (the “Stafford Act”) in response to the Coronavirus Disease 19, or COVID-19.  This declaration allows employers to make qualified disaster relief payments to employees affected by COVID-19 on a tax-free basis pursuant to Section 139 of the Internal Revenue Code (the “Code”).

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High-deductible Health Plans May Cover COVID-19 (Coronavirus) Costs

To facilitate the nation’s response to the 2019 Novel Coronavirus (COVID-19), also known as the Coronavirus, the Internal Revenue Service advised in IRS Notice 2020-15 that a high-deductible health plan (HDHP), until further notice, is permitted to pay for COVID-19-related testing and treatment, without jeopardizing its status as an HDHP.  Additionally, contributions to an HDHP participant’s health savings account (HSA) will not be adversely affected if the HDHP covering the participant provides for coverage of costs for COVID-19-related testing or treatment‎.

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