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 firstname.lastname@example.org.
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. Effective January 1, 2021 and moving forward, telehealth services are covered for the State’s HMO and PPO plan members. Services must be received from participating health care practitioners. Co-payments apply.
Contact your health plan to learn more about covered telehealth services.
Flexible Spending Account
Dependent Care FSA: Due to the closures of childcare facilities and schools, employees can call the People First Service Center at 866-663-4735 and request midyear changes. The closure of facilities and lack of childcare options is Qualifying Status Change (QSC) #24 that allows this change.
- Contribution Increases: Employees can call the People First Service Center to increase 2021 contributions to the following new limits: $5,250 if single or married filing separately, or $10,500 if married filing jointly or single-head of household.
- Grace Period Changes: The grace period to incur eligible expenses for plan year 2020 contributions is extended to April 15, 2022, to submit claims for expenses incurred before December 31, 2021. The grace period to incur eligible expenses for plan year 2021 contributions is extended to December 31, 2022. The deadline to submit claims is extended to April 15, 2023, for expenses incurred before December 31, 2022.
- Dependent Age Increase: If you were enrolled in the dependent care FSA plan before January 31, 2020, and your dependent turned 13 in 2020, you may continue to incur claims with the remaining 2020 funds in 2021 for this dependent until they reach the age of 14 or December 31, 2021, whichever occurs first.
Medical and Limited Purpose FSA: Any unused benefits from plan year 2020 carry over to plan year 2021 and must be used by December 31, 2021. The deadline to submit claims is extended to April 15, 2022 for expenses incurred before December 31, 2021. An employee may continue to receive reimbursements of unused contributions through the end of 2021 regardless of employment status. The grace period to incur eligible expenses for plan year 2021 contributions is extended to December 31, 2022. The deadline to submit claims is extended to April 15, 2023, for expenses incurred before December 31, 2022.
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.