SVP, REGULATORY AFFAIRS & COMPLIANCE Quarterly Legislative … · 2020-04-21 · SVP, Regulatory...
Transcript of SVP, REGULATORY AFFAIRS & COMPLIANCE Quarterly Legislative … · 2020-04-21 · SVP, Regulatory...
Quarterly Legislative and Regulatory Update
ANNETTE BECHTOLD, CIC, ChHC, REBC
SVP, REGULATORY AFFAIRS & COMPLIANCE
April 12, 2020
ONEDIGITAL GROWTH SUMMIT 2018
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Annette Bechtold
SVP, Regulatory Affairs and Reform Initiatives
Spotlight
The Coronavirus Aid, Relief, and Economic Security (CARES) Act
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“To be good, and to do good, is all we have to do.”
John Adams, 2nd President of the United States
Government Response to COVID-19
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Legislative COVID-19 Action
• $8.3 billion emergency spending package
• March 6, 2020
Action by
Administration
•Declares national emergency
•HHS Secretary creates waivers necessary to respond
•March 13, 2020
Families First Coronavirus Response Act
• Provides relief to businesses and employees affected by COVID-19 events
• March 18, 2020
The CARES Act signed into law
• $2 trillion to stimulate economy and provide support to individuals and businesses
• March 27, 2020
Stimulus Package 4
• Additional funding, as needed, to stimulate the economy and/or respond to the outbreak
• TBD
The CARES Act
1. Title I: Keeping American Workers Paid and Employed Act
2. Title II: Assistance for American Workers, Families, and Businesses
3. Title III: Supporting America’s Health Care System in the Fight Against the Coronavirus
4. Title IV: Economic Stabilization and Assistance to Severely Distressed Sectors of the United States Economy
Discussion
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TITLE I: Keeping Workers Paid and Employed
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Paycheck Protection Program
Description
100% guaranteed covered loans
Available to businesses and self-employed
individuals
During the period of February 15, 2020
through June 30, 2020
Eligibility
Businesses whose principal place of
residence is in the United States
In operation on February 15, 2020
500 or fewer employees for whom you paid
salaries and payroll taxes
Terms of the Loan
Based on average monthly payroll costs
First eight weeks of certain expenditures are
forgivable – no repayment
Remaining balance becomes a 2-year loan subject to 1% interest
Distribution
Available through the Small Business
Association (SBA), credit unions, or banks
Loan program available to small businesses and
sole proprietors on Friday, April 3
Available to independent contractors and self-
employed individuals on Friday, April 10
TITLE I: Keeping Workers Paid and Employed
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Details of the Paycheck Protection Program Loan Amount
Loan Use
Payroll costsContinuation of group health
care benefits while on paid sick medical or family leave
Mortgage interest obligations Rent and utilitiesInterest on other debt
obligations incurred prior to 2/15/20
Maximum loan
is the lesser of: 2.5 x of payroll costs or $10,000,000
Businesses calculate the average monthly payroll costs over previous 12
months or 2019 calendar year
Excludes individual cash compensation over $100,000 not including any non-
cash benefits
Cannot include any paid sick leave or family leave reimbursed under the
Families First Coronavirus Response Act
Payroll costs include:
Salary, wages, commissions, or similar
compensationCash tips or equivalent
Payment for vacation, sick leave, or family or
parental leave
Allowance from dismissal or separation
Payment for provision of group health care and
retirement benefits
Payment of State or local tax assessed on
employee compensation
TITLE I: Keeping Workers Paid and Employed
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Details of the Paycheck Protection Program Loan Forgiveness – pending guidance
Add total amounts used, i.e. amounts paid out during the covered period [Covered period = 8 weeks from the date the lender makes first disbursement]
Reduce if payroll costs paid are <75% [If payroll costs are 60%/non-payroll costs 40%, only 25% of the non-payroll costs forgivable]
Reduce proportionately for reductions in staff [If staff retention is 80%, amount forgivable is 80% unless staff is rehired by 6/30/20]
Reduce for wages reductions >25% [Amount is reduced directly by the amount of wage reduction exceeding 25%]
Staffing Retention Reduction
Avg. # FTEs/mo. in covered period
Avg. # FTEs/mo. for 2/15/19-6/30/19 or 1/1/20-2-29/20
EXAMPLE: Avg. FTE/mo. (2020) = 280
Avg. FTE/mo. (2019) = 35080%
Wage Retention Reduction
EXAMPLE: Employee A has average monthly pre-loan wages of
$6,000 and $3,600 during the loan
• Change in wages is 60% [$3,600 ÷ $6,000] –
allowable is 75%, or $4,500
• Amount paid during loan (2 months) = $7,200
rather than $9,000 → loan reduced by $1,800
TITLE II: Assistance for Workers, Families, and Businesses
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Unemployment Assistance
Pandemic Emergency Unemployment Compensation
Provides additional unemployment compensation up to 13 additional weeks
for those individuals who:
• have exhausted all rights to regular compensation under the State law or under
Federal law with respect to a benefit year (excluding any benefit year that ended
before July1, 2019);
• have no rights to regular compensation with respect to a week under such law, any
other State unemployment compensation law, unemployment compensation law of
Canada, or to compensation under any other Federal law; and
• are able to work, available to work, and actively seeking work
Emergency Increase in Unemployment
Compensation Benefits
Provides an additional $600 per week to
otherwise eligible unemployment
compensation recipients and will apply to
weeks of unemployment from the date the
State makes available in agreement with the
DOL and July 31, 2020
Temporary
Funding for First
Week
Federal
government
provides payment
if the state has a
one-week waiting
period
Pandemic Unemployment Compensation
Grants unemployment compensation for January 27, 2020 through December
31, 2020 for individuals not normally eligible for state or federal law or
pandemic emergency unemployment compensation
Temporary Grants for
Short-time
Compensation
Assists states who
don’t allow short-time
compensation to
receive 100%
reimbursement for
provision of benefits
TITLE II: Assistance for Workers, Families, and Businesses
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Recovery Rebates
Check delivery:
• Will arrive direct deposit if account is known to the IRS, otherwise by
mail to last known address
• Online sign-up for all those who do not file or for who there is no
known address or banking information https://www.irs.gov/coronavirus/non-filers-enter-payment-info-here
Taxpayer Amount
Single $1,200
Head of household $1,200
Married filing jointly $2,400
Additional $500 per child who has not
attained age 17
Full Amount Prorated Amount Not Eligible
Up to $75,000 $75,001 - $99,000 Over $99,000
Up to $112,500 $112,501 and $146,000 Over $146,000
Up to $150,000 $150,001 and $198,000 Over $198,000
Amount
Based
on AGI
TITLE II: Assistance for Workers, Families, and Businesses
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Employee Retention Credit
• 50% of first $10,000 of wages per employee in a calendar year
• Based on qualified wagesAmount of Credit
• Include compensation (excludes FFCRA wages) and its qualified health plan expenses
• 100 or fewer FTE* employees in 2019 = wages paid to all employees
• >100 FTE* employees in 2019 = wages paid to only those who did not work
Qualified Wages
• Wages paid from March 12, 2020 through December 31, 2020
• Report on quarterly tax Form 941
Claiming the Credit
Available to non-government employers whose:
1) operations were fully or partially suspended, due
to a COVID-19 related shut-down order; or
2) gross receipts declined by more than 50% (when
compared to the same quarter in the prior year and
ending with the subsequent quarter where gross receipts
are more than 80% for the same calendar quarter)
Not allowed with Paycheck Protection Program
* FTE (full-time equivalent employees as defined
under the ACA’s employer shared responsibility
TITLE II: Assistance for Workers, Families, and Businesses
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Other Tax Relief
• Waives the 10% early withdrawal penalty for distributions and plan loans up to $100,000 from qualified retirement accounts
• For coronavirus-related purposes made on or after January 1, 2020
• Repayment terms over next three years
Retirement Funds
• Beginning in the 2020 tax year
• May claim up to $300, for cash contributions to certain charitable organizations, even if not itemizing deductions
• Includes churches, certain educational organizations, hospitals and medical research organizations, etc.
Partial Deduction for Charitable Contributions
• Employers may provide a student loan repayment benefit to employees on a tax-free basis
• Limited to $5,250 annually
• Excluded from employee’s gross income
• Applies to any loan payments made after March 27, 2020 and before December 31, 2020
Exclusion for Certain Employer Payments on Student Loans
• Employers and self-employed may defer FICA and SECA taxes through 12/31/20
• Payback over two years (50% by 12/31/21 and 50% due by 12/31/22) with no penalty
• Employers receiving Paycheck Protection Program loans are not eligible
Delay of Payment of Employer Payroll Taxes
Title III: Supporting America’s Health Care System
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Various Benefits-Related Provisions
Coverage of Testing and Preventive Services
Adds COVID-19 testing as preventive care
Requires health plan coverage with no cost sharing
Temporary Relief for Student Borrowers
Suspends all payments due for loans through September 30, 2020
No accrual of interest
Telehealth Expansion
Allows telehealth services, prior to the satisfaction of the deductible, for high deductible health plans (HDHPs) with health savings accounts (HSAs)
Applies to plan years on or before December 31, 2021
Over-the-Counter Medical Products
Menstrual care products are qualified medical expenses under flexible spending account (FSA), MSA, and HSA
FSA - Begins with expenses incurred after December 31, 2019
HSA – Begins with expenses paid after December 31, 2019
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OneDigital’s COVID-19 Resources
Your resource for navigating business and workplace challenges arising from the coronavirus pandemic
Gain access to resources to help you monitor and respond to this rapidly evolving situation:• Cutting-Edge Health Plan Cost Impact Tool• On-Demand COVID-19 Employer Advisory
Webinars• Employer FAQ• Benefits, HR and Compliance Guidance tools
onedigital.com/coronavirus/
CORONAVIRUS ADVISORY HUB
Helping Employers Make the Most of a $2 Trillion-Dollar Economic Lifeline
Mitigate risk and position your organization for financial stability and future growth post-pandemic:• CARES Act FAQ• Application materials for SBA’s Paycheck Protection Program• Articles, downloads and other resources to help you
understand and communicate the current economic landscape
onedigital.com/stimulus-guidance/
STIMULUS GUIDANCE HUB