The Families First Coronavirus Response Act (FFCRA), signed into law on March 18, 2020, requires small and midsize businesses to provide paid sick leave for employees sickened by COVID-19 or caring for someone who is. These businesses will then receive reimbursement for the cost of those payments in the form of a tax credit. The IRS released FAQs about how to claim this credit. The Employers Council on Flexible Compensation (ECFC), highlighted some points of interest that relate to health coverage and the amount of wages subject to this credit:
“Qualified health plan expenses provided to employees are included in the amount of the credit, but only to the extent that these expenses were excluded from the employee’s gross income as employer-provided coverage from a group health plan under Internal Revenue Code section 106. Q&A 31 through 36 of the IRS FAQs detail how qualified health plan expenses are determined and they include the following items of interest:
We will continue to update you on any legislative developments related to COVID-19 and consumer-directed healthcare.
If you have any additional questions, please reach out to us. Visit our COVID-19 resource center to get answers to all your questions related to the crisis and consumer-directed healthcare (CDH).