CARES Act: Impact on Employee Benefits


CARES Act: Impact on Employee Benefits

On March 27, 2020, Congress passed, and the President signed, an unprecedented 2 trillion-dollar stimulus and relief package into law, named the Coronavirus Aid, Relief, and Economic Security Act or the CARES Act. This act provides direct stimulus relief to corporations and individuals. While there are many facets to this act, this brief serves to highlight the changes to employee benefits due to the CARES Act.

Expanded COVID-19 Testing

The Families First Coronavirus Response Act (FFCRA) required group health plans and insurers to provide coverage of certain diagnostic COVID-19 testing and related services without cost-sharing and without preauthorization. The CARES Act expands on these provisions:

Required Coverage of COVID-19 Vaccines and Other Preventive Treatments

If a COVID-19 vaccine, immunization, etc. are developed, the Act mandates coverage without employee cost-sharing for these preventive services. To qualify for this treatment, the preventive item or service must meet certain criteria as defined by the U.S. Preventive Services Task Force and/or the Advisory Committee on Immunization Practices.

Expanded Coverage of Telehealth Services by HDHPs

The Act includes a safe harbor allowing a high deductible health plan (HDHP) to cover telehealth or other remote care services, with no cost-sharing, prior to the participant’s meeting the plan deductible. This ensures the participant will maintain Health Savings Account eligibility. Note, this safe harbor is only for plan years beginning on or before December 31, 2021.

Expanded Use of HSAs, FSAs, and HRAs

Withing the CARES Act, HSAs, FSAs, and HRAs can now be used to purchase over the counter medications without a prescription. The act also mandates that menstrual care products will be treated as qualified medical expenses and can also be purchased using an HSA, FSA, or HRA. These provisions are effective for expenses incurred and amounts paid after December 31, 2019.

Amendments to the FFCRA

The CARES Act makes several minor changes and clarifications to the FFCRA:

Innovative is committed to assisting employers in understanding how these regulations impact their employee benefits plan. Innovative is available for any questions relating to this brief or any other aspect of the CARES Act or visit our COVID-19 Employer Resource Center for daily updates.

For a downloadable PDF, click here.

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