The Consolidated Appropriations Act Provides Further COVID-19 Relief

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The Consolidated Appropriations Act Provides Further COVID-19 Relief

The Consolidated Appropriations Act Provides Further COVID-19 Relief

December 30, 2020

The “Consolidated Appropriations Act, 2021” was passed into law on December 27, 2020 following a bipartisan support despite a short stall issued by President Trump regarding the payment of $600 versus $2,000 of individuals who make less than $75,000. The law allocates $900 billion for COVID-19 relief and a remaining $1.4 trillion portion towards standard spending allocations. The PPP will be in a separate post; however, the other provisions of the Act provides for:

$600 Stimulus Checks. Up to January 15th, 2021, single individuals making $75,000 a year or less, and married individuals making $150,000 a year or less, will receive a wired transfer of $600.
- This will be reduced, pro rata, up to $87,000 for individuals and $174,000 for married couples.
Extended Employer Assistance for Student Loans. The CARES Act previously amended the Internal Revenue Code to allow employers to treat student loan repayments as nontaxable employer provided educational assistance. This CARES Act relief was set to expire on December 31, 2020. The CAA extended the relief previously afforded under the CARES Act to employer loan assistance provided through December 31, 2025. Accordingly, employers may amend their employer educational assistance programs to include up to $5,250 worth of student loan payments that may be reimbursed or paid on behalf of an employee on a tax-free basis. Importantly, the $5,250 cap applies as a single unified limitation on both loan payments and other employer provided educational assistance.
Qualified Disaster Relief. Eligible participants can generally take qualified disaster distributions of up to $100,000 in the aggregate, to repay hardship distributions for principal residence, to obtain loan relief
- Note – the California wildfires or Hurricane Isaias would be covered. A list of all major disaster declarations can be found at: https://www.fema.gov/disasters/disaster-declarations.
Partial Plan Termination Relief. Wherefore a retirement plan will not be treated as having experienced a partial plan termination during any plan year which includes the period beginning on March 13, 2020 (the date the COVID national emergency was declared) and ending on March 31, 2021, if the number of active participants covered by the plan on March 31, 2021 is at least 80% of the number of active participants covered by the plan on March 13, 2020.
Pension Relief for Construction Workers. Certain multiemployer pension plan participants in the building and construction industry shall be eligible to begin receiving benefits at age 55, even if they are still employed at the time of such distributions.
Transfers of Excess Pension Assets to Retiree Health or Life Accounts. Under current law, certain retiree health and life insurance costs may be transferred from a defined benefit pension plan to a retiree health or life insurance account within the pension plan over an elected transfer period of up to 10 years. The CAA, provided certain conditions are met, permits employers to make a one-time election during 2021 to end any existing transfer period for any taxable year beginning after the date of such election.
Extended Grace Period for Flexible Spending Accounts. Under the CAA, employers may permit extended grace periods or expanded carryovers for health and dependent care flexible spending accounts (FSAs) for plan years ending in 2020 and 2021.
Temporary DCAP Rule for 14 Year Old Dependents. The CAA temporarily changes the maximum age of a dependent from age 13 to 14 and allows participants who had children who aged out of dependent care FSA (DFSA) coverage in 2020 to use DFSA funds through the plan year ending in 2021 to reimburse expenses for the dependent until the dependent attains the age of 14.
Changes in Medical Billing Rules. Effective 2022, the law eliminates a plan’s ability to impose restrictions on use of out of network services; requires group health plans to calculate an employee’s cost sharing amount for out of network services; prohibits out of network providers from the practice of billing the plan participant for the balance of the out of network charge not paid by the plan; requires that group health plans and carriers add deductible, out of pocket maximum and consumer resource contact information to any paper or electronic insurance card issued to participants; and requires that group health plans and carriers provide advanced billing and personal cost information to participants based on the contracted rate the plan has established with the provide.
New Mental Health Parity Rules. Insured and self-insured group health plans that offer mental health or substance use disorder benefits provided by group health plans. Therein, this provides greater transparency to the patients as well offering great contention in the medical community.

The Consolidated Appropriations Act Provides Further COVID-19 Relief

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