The Washington Report
April 1, 2020
Note to subscribers: Due to the current environment, information is changing at a rapid rate. While we do our best to provide timely updates, it is possible that the information shared in the newsletter may change or be revised after our publication deadline. Stay healthy and safe! ~The Washington Report team
President Signs $2T COVID-19 Stimulus Package Into Law
On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act (CARES Act – H.R. 748). The bill was passed by the Senate on March 25, 2020, and approved by the House on March 27, 2020. The CARES Act is the third phase of legislative relief efforts in response to COVID-19.
Financial Assistance: Among other provisions, the law will provide billions in loans and assistance to small and large companies, as well as aid to state and local governments. The law will also offer increased unemployment benefits, tax credits for businesses retaining employees on their payroll, and provide massive funding to hospitals fighting COVID-19. Employers and self-employed individuals will be able to defer the 6.2% tax paid on wages used to fund Social Security.
Rebate Payments: Eligible individuals with adjusted gross income of up to $75,000 ($150,000 for married couples) will receive a $1,200 ($2,400 for couples) “rebate payment.” These individuals are also eligible for an additional $500 payment per child. (The payments phase out for earners above the income thresholds and will not go to single filers earning more than $99,000; head-of-household filers with one child, more than $146,500; and more than $198,000 for joint filers with no children.)
Retirement: On the retirement front, the law provides short-term funding relief for single employer defined benefit plans as well as certain relief related to accessing retirement plan benefits. Below is a high-level summary of the key retirement plan provisions in the CARES Act:
- A plan sponsor may defer quarterly or final cash contributions to their defined benefit plan that would otherwise be due during calendar year 2020 until January 1, 2021.
- A plan sponsor may elect to treat the adjusted funding target attainment percentage (AFTAP) for the last plan year ending before January 1, 2020 as the AFTAP for plan years which include calendar year 2020.
- Retirement plan distribution rules have been relaxed, including:
- An increase in the defined contribution (DC) plan loan limit from $50,000 to $100,000;
- A temporary waiver of the required minimum distribution rules for DC plans in 2020; and
- Relief from the 10% excise tax on early withdrawals from defined benefit and DC plans for coronavirus-related distributions (up to $100,000).
Employers and Group Health Plans: The CARES Act includes several provisions relating to employers and their group health plans. Please see the Aon bulletin President Signs CARES Act Into Law in the Publications section of the newsletter. This bulletin discusses provisions of the CARES Act relating to employer group health plans and suggests employer actions in response to the law.
The full text of the CARES Act (H.R. 748) is available here.
IRS Publishes Notice on Effective Date for Employment Tax Credits Under the FFCRA
On March 27, 2020, the Internal Revenue Service (IRS) released Notice 2020-21, which states that employment tax credits for paid qualified sick leave wages and paid qualified family leave wages required by the Families First Coronavirus Response Act (FFCRA) will apply to such wages and compensation paid for periods beginning on April 1, 2020, and ending on December 31, 2020, and that days beginning on April 1, 2020, and ending on December 31, 2020, will be taken into account for credits for paid qualified sick leave equivalents and paid qualified family leave equivalents for certain self-employed individuals provided by the FFCRA. For additional information on the DOL guidance, please see DOL Issues FFCRA FAQs While IRS Begins Tax Credit Guidance in the Publications section of the newsletter.
IRS Notice 2020-21 is available here.
DOL Publishes Several Rounds of Guidance Explaining Paid Sick Leave and Expanded FMLA Under the FFCRA
Late last week, the Department of Labor (DOL) published several rounds of guidance explaining the protections and relief offered by the FFCRA when it takes effect on April 1, 2020. Among other provisions, the FFCRA provides temporary payments to individuals for family and sick leave, allows businesses to receive tax credits for providing such payments, and requires group health plans to cover testing for COVID-19 without cost-sharing to participants.
The guidance includes questions and answers addressing critical issues such as the definition of a “health care provider,” and the scope of the small business exemption for purposes of exclusion from the provisions of the Emergency Paid Sick Leave Act and Emergency Family and Medical Leave Expansion Act, as well as whether public sector employees may take paid family and medical leave. In addition, the DOL posted its two recently released posters and fact sheets in Spanish on its COVID-19 website.
This guidance adds to a growing list of compliance assistance materials published by the DOL, including the English-language versions of a Fact Sheet for Employees, a Fact Sheet for Employers, and two new required posters—one for federal workers and one for all other employees, as well as Questions and Answers about posting requirements, and a Field Assistance Bulletin describing the 30-day non-enforcement policy.
For additional information on the DOL guidance, please see DOL Issues Guidance on FFCRA Paid Leave Provisions and DOL Issues FFCRA FAQs While IRS Begins Tax Credit Guidance in the Publications section of the newsletter. Please note that some government websites are experiencing technological issues due to increased traffic. Readers may have to cut and paste the links below to access the information.
The DOL press release is available at: https://www.dol.gov/newsroom/releases/whd/whd20200328
A Fact Sheet for employers is available at:
A Fact Sheet for employees is available at: https://www.dol.gov/agencies/whd/pandemic/ffcra-employee-paid-leave
The FAQs are available at: https://www.dol.gov/agencies/whd/pandemic/ffcra-questions
The new poster for non-federal employers is available at: https://www.dol.gov/sites/dolgov/files/WHD/posters/FFCRA_Poster_WH1422_Non-Federal.pdf
The new poster for federal employers is available at: https://www.dol.gov/sites/dolgov/files/WHD/posters/FFCRA_Poster_WH1422_Federal.pdf
The questions and answers related to posting requirements are available at: https://www.dol.gov/agencies/whd/pandemic/ffcra-poster-questions
The Field Assistance Bulletin is available at: https://www.dol.gov/agencies/whd/field-assistance-bulletins/2020-1
The DOL’s COVID-19 and the American Workplace website is available at: https://www.dol.gov/agencies/whd/pandemic
President Signs CARES Act Into Law
President Trump signed the Coronavirus Aid, Relief, and Economic Security (CARES)
Act into law on March 27, 2020.
While the CARES Act focuses on workers, economic stabilization, and the health care system, it includes several provisions relating to employers and their group health plans.
- Discusses provisions of the CARES Act relating to employer group health plans; and
- Suggests employer actions in response to the CARES Act.
The Aon bulletin is available here.
DOL Issues Guidance on FFCRA Paid Leave Provisions
The U.S. Department of Labor (DOL) has issued guidance on the new federal paid leave provisions for leaves taken due to COVID-19 between April 1, 2020, and December 31, 2020, under the Families First Coronavirus Response Act (FFCRA).
The Aon bulletin, which provides an overview of the DOL guidance, is available here.
DOL Issues FFCRA FAQs While IRS Begins Tax Credit Guidance
The DOL issued more frequently asked questions (FAQs) on the new federal paid leave provisions for leaves taken due to COVID-19 between April 1, 2020, and December 31, 2020, under the FFCRA. In addition, the Internal Revenue Service (IRS) issued Notice 2020-21, which clarified that tax credits for the paid leave provisions under the FFCRA will apply to wages paid for the period beginning on April 1, 2020, and ending on December 31, 2020.
The Aon bulletin is available here.
Aon Presents: Investment Market Update: Q2 2020
Register for Aon’s webinar, on April 15, 2020, at 11:30 a.m. CST/12:30 p.m. EST, to hear from industry leaders as they review the market highlights from Q2. Aon experts will also provide investments strategies for portfolios and current positioning for doing business in a volatile world.
This Q&A-style webinar will cover a range of topics, including:
- The Q2 market update;
- Investment outlook for the second half of 2020;
- Rebalancing, return-seeking and potentially risk-reducing portfolio opportunities; and
- Investing in private markets during volatility.
Please register for the Investment Market Update: Q2 2020 webinar here.
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