Four Ways Employers Can Assist Employees Amid COVID-19: FSA/HSA/HRA/MRA

Amid the COVID-19 pandemic, we find each day brings new information and challenges. But sometimes, all we want (and need) are answers. Read how you can assist your employees during this uncertain time.

Question 1: Can employees change their FSA elections?
Under current rules, employees are permitted to make FSA election changes when they have a qualifying event. For those getting married or having a baby, the distinction might be easy.

Things get a little more complicated when you have a change in employment status or changes in dependent care costs. For example, it is possible that employees are eligible for a special enrollment period for dependent care. With schools closing, employees may be experiencing increased child care costs that were not previously anticipated. Conversely, a reduction or change in hours could also result in changes.

Be on the look out for potential developments. On March 11, the Senate introduced S.3442. If passed, it would allow for special enrollment periods for individuals diagnosed with COVID-19.

Question 2: Can my HDHP offer first-dollar coverage for COVID-19 testing and remain HSA-qualified?
On March 11, 2020, the IRS issued Notice 2020-15 indicating medical care services received and items purchased associated with testing for and treatment of COVID-19 can be provided by a health plan without a deductible and remain an HSA-qualified plan.

Question 3: Are insurance plans required to provide COVID-19 testing at no cost?
The rules currently vary by state and whether a plan is self-insured or fully insured. Many insurance companies recently came out stating they would be covering COVID-19 testing with no cost sharing. For those covered by Medicare, the cost of the test is covered as well as additional expenses that can occur if you were to catch this virus. Medicaid and Children’s Health Insurance Program (CHIP) vary by state and individuals should verify coverage in their respective state.

Bills have been proposed at both state and Federal levels that would ensure the cost of COVID-19 testing would be provided at no cost. Please reach out to your existing insurer or state insurance commissioner to confirm the rules for your state and insurance plans.

Question 4: How can employers help employees cover the cost of testing and COVID-19 related expenses?
Sometimes all you want to do is lend a helping hand, but even that doesn’t always come easy. As employers look to navigate many aspects of COVID-19, they are looking for a little guidance on what options exist to provide employees with some additional funds

  • Employees insured under a group health plan can be offered a Health Reimbursement Account (HRA). To ensure privacy and compliance with HIPAA rules, the HRA should be set-up to pay all eligible medical expenses under Section 213(d). If you are looking to have the HRA align with a medical plan already in place, you can offer a short plan year.

  • Employees who were offered coverage but waived the benefit can be offered an Excepted Benefit HRA. Employers can provide up to $1,800.

  • Employees who are not offered health benefits can be offered a taxable Medical Reimbursement Account (MRA). An MRA behaves much like an HRA and can be restricted to medical expenses. However, as a taxable benefit, it is not subject to the coverage requirements of an HRA.

Becky Seefeldt is the Vice President of Strategy at Benefit Resource, Inc.  She can be reached at [email protected]

 

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