On December 27, 2020, President Trump signed the “Consolidated Appropriations Act of 2020” (CAA) into law. Over the next few weeks, we will share more information about the 5,593-page law, but until then, here are some key takeaways:
FSA Relief: Employers can allow employees to carry over unused funds or extend their spending grace period for up to 12 months for plan years ending in 2020 or 2021. Businesses can also allow prospective changes during the 2021 plan year without a corresponding status change.
Federal Paid Leave: The CAA allows an employer to provide paid leave and get the related tax credits through March 31, 2021.
Payroll Tax: If an employer postponed withholding and paying the employee’s share of payroll taxes, the CAA extends the repayment period through December 31, 2021. Also, penalties and interest will not start to accrue until January 1, 2022.
Surprise Billing: Beginning on January 1, 2022, if an out-of-network provider and a plan cannot agree on payment, they can request a special “baseball-style” arbitration based on median in-network rates or what the provider believes is fair payment. From the patient’s perspective, the law caps out-of-network cost-sharing at in-network rates for certain types of out-of-network care.
Carrier and Group Plan Requirements: Many new transparency requirements will affect groups with plan years that start on or after January 1, 2022. They include: (1) adding cost-sharing to health plan ID cards; (2) making detailed cost information available to plan participants before they incur certain kinds of claims; and (3) annually reporting extensive health plan cost and claim information to the federal government.
PPP Loans: The new law provides $284 billion additional dollars in funding for the Paycheck Protection Program (PPP), liberalizes the PPP forgiveness rules, and gives existing PPP loan recipients another funding opportunity. It also makes PPP qualified expenses tax-deductible.
Retention Tax Credit: The CAA extends the retention tax credit through June 30, 2021, and improves upon it. More businesses may qualify, and employers can get tax relief for larger amounts of employee wage and benefit costs.
Stimulus Payments: Qualified taxpayers will get direct payments of $600 per individual and eligible child dependents in the next few weeks. The economic relief is means-tested based on 2019 incomes. The cut-off is an annual income level of more than $87,000 for single filers/$174,000 for those married filing jointly with no qualifying dependents.
Unemployment: The CAA extends federal pandemic unemployment assistance by $300 a week for 11 more weeks, through at least March 14, 2021.