Federal Changes Impacting Qualifying Status Change Events, Spending and Savings Accounts, and Other Updates
The Division of State Group Insurance (DSGI) has released Management Advisory #20-005. This advisory outlines the extension of qualifying status change (QSC) events, flexible spending account (FSA) carry-over limit increases, the extension of appeal rights, and other updates and changes.
Employees will need to contact the People First Service Center at (866) 663-4735 to request allowable changes.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law in response to the public health crisis and associated economic fallout in the wake of COVID-19. The bill includes provisions that would permit limited early withdrawals (“coronavirus-related distributions”, or CRDs) and higher loan amounts from qualified retirement accounts to ease financial pressures faced by workers who contract or are negatively affected by the virus.
The bill also suspends required minimum distributions (RMDs) for the entire 2020 calendar year.
Summary of CRD and RMD Waiver included in the CARES Act:
Coronavirus-Related Distributions: The bill contains a new distribution type from a 403(b) plan called a “coronavirus-related distribution” (CRD). Although the CRD is taxable, the 10% early withdrawal penalty and the 20% mandatory withholding will not apply to CRDs. Unless the individual elects otherwise, a CRD is included in gross income ratably over three years. The CRD is limited to a maximum aggregated amount of $100,000 across all an individual’s plan accounts and IRAs. The eligibility requirements (“Eligibility Criteria”) include an employee:
- Who is diagnosed with coronavirus disease 2019 (COVID-19) by a test approved by the Centers for Disease Control and Prevention.
- Whose spouse or dependent (as defined in Code section 152) is diagnosed with such virus or disease.
- Who experiences adverse financial consequences as a result of being quarantined, being furloughed or laid off or having work hours reduced due to such virus or disease, being unable to work due to lack of child care due to such virus or disease, closing or reducing hours of a business owned or operated by the individual due to such virus or disease, or other factors as determined by the Secretary of the Treasury.
- Loan Initiation: Individuals who meet the eligibility criteria can take out loans during a 180-day period after enactment in amounts of the lesser of $100,000 of the vested account balance (considering the outstanding balance of all other loans taken from plans of the employer) or 100% of the nonforfeitable value of the participant’s account under the plan. (Increased from the otherwise applicable limit of $50,000 or 50% of the vested account balance).
- Loan Repayments: For any repayment on a loan due between enactment and December 31, 2020, the due date for repayments by eligible individuals may be delayed for one year. Any subsequent repayments must be adjusted to reflect the delay and interest accrued during the delay.
- Eligible individuals with existing loans who meet the Eligibility Criteria and have outstanding loans (whether entered before or after enactment) are entitled to have any repayment on a loan due between enactment and December 31, 2020, delayed for one year. Any subsequent repayments must be adjusted to reflect the delay and interest accrued during the delay. Sponsors must affirmatively elect for these enhanced loan benefits to be made available to their participants.
RMD Waivers: Required minimum distributions (RMDs) for 2020 are waived for 403(b) plans. The waiver also applies to those individuals who attained age 70 ½ in 2019 and elected a delayed required beginning date of April 1, 2020.
- We continue to encourage individuals to first utilize their emergency savings accounts before tapping long-term retirement savings.
- We also recommend individuals talk with a financial advisor before taking any action. An advisor can provide the proper guidance as to what to consider for an individual’s own situation.
If you have further questions, please contact your individual 403(b) provider or email Human Resources at email@example.com.
Reemployment Assistance (formerly known as Unemployment Compensation)
Reemployment Assistance provides temporary wage replacement benefits to qualified workers who are out of work totally or partially due to COVID-19. Faculty, A&P, USPS, and OPS employees can apply for benefits through the Florida Department of Economic Opportunity’s (DEO) website. DEO makes the determination regarding eligibility and benefit payments.
The information regarding eligibility, what you need to apply, and other frequently asked questions can be found on the Reemployment Assistance Frequently Asked Questions document or the DEO website.
Executive Order #20-85 Telehealth and Immunizations for State Group Insurance
Governor DeSantis issued Executive Order 20-85 directing the Department of Management Services to amend its state plan documents with its health maintenance organizations (HMOs) and preferred provider organization (PPO) contracts to allow for telehealth services and immunizations at retail pharmacies. These services are available for the duration of the public health emergency period at no cost to the member.
This Letter to Members will be mailed out in support of this directive.
Dependent Care Flexible Spending Account
Due to the closures of child care facilities and schools, employees can call the People First Service Center and request to reduce their contribution amount for their Dependent Care Reimbursement account. The closure of facilities and lack of child care options is a QSC (#24) that allows this change due to the closure or change in daycare and other camp programs.
FICA Alternative Plan – BENCOR
The CARES Act provisions affecting BENCOR plan accounts ease distribution and loan rules to free up funds for individuals impacted by the pandemic and provide relief for 2020 from the required minimum distribution (RMD) rules. Click here to see the provisions for this plan.
Insurance Benefits Suspension Process
Updates have been made to the insurance benefits process to temporarily stop suspending employee health and pharmacy coverage due to underpayments. This process change ONLY applies to health and pharmacy coverage and does not apply to supplemental insurance coverage.
- All underpayment processes for collecting employee and employer underpayments will continue during this time.
- All underpayment notification processes (emails and letters) will continue during this time.
- The only process change is that coverage will not be suspended if unable to collect the full premium from the employee.
This change is in effect through May 31, 2020.
Chard Snyder Benefits Card
Updates have been made to the Chard Snyder Benefits Card process to unsuspend all previously suspended cards and to temporarily stop suspending cards due to pending documentation. This change is in effect through May 31, 2020.
Executive Order #20-88 Re-employment of Essential Personnel
On March 30, 2020, Governor DeSantis signed Executive Order 20-88 authorizing Florida Retirement System (FRS) participating employers to utilize recent retirees who have retired since October 1, 2019, or who may retire prior to or on August 1, 2020, under a state administered retirement system to provide essential work or essential services during this state of emergency without impacting their retirement benefits.
Executive Order 20-88 does not apply to employment or services that are not essential for the COVID-19 emergency. Retirees providing essential services during the COVID-19 emergency are temporary employees and should not be reported on the agency’s retirement file. Additionally, these retirees will not earn or accrue retirement benefits during the period covered by Executive Order 20-88.
Seminole Emergency Relief Fund for Employees
The Seminole Emergency Relief Fund was created to assist employees who have been severely impacted financially by the COVID-19 pandemic.
The Seminole Emergency Relief Fund is closed at this time, and applications are no longer being accepted.