The current healthcare and employment crisis caused by COVID-19 has a lot of people wondering about their benefits. From using their healthcare benefit accounts, to childcare, to COBRA, it can all seem confusing. Take a look at the COVID-19 benefits FAQs below.
COVID-19 Benefits FAQs: 5 Questions
I was laid off. Can I use my Flexible Spending Account (FSA)?
A Flexible Spending Account is not portable like a Health Savings Account (HSA). If you had an FSA through your employer and lost your job, you cannot continue to use the account. Unfortunately, the account and the contributions stay behind with your employer.
I am no longer covered by a high deductible health plan. Can I use my HSA?
Yes. An HSA is your account for life. You can use the account to pay for out-of-pocket healthcare expenses, even if you are not enrolled in a high deductible health plan. You cannot, however, put money into an HSA unless you are enrolled in an HDHP.
Can I get COBRA if I’ve been furloughed?
Under COBRA, people are eligible to continue getting their group health plan coverage if they have lost a job (or their spouse or parent) or had a reduction in hours.
Therefore, people who were laid-off can use COBRA continuation coverage. For furloughed employees, the answer depends on your employer.
A furlough is usually temporary, with a specific end date. However, a furlough can be extended beyond the initial period or converted later into a layoff. In a furlough, the employee experiences a forced, unpaid leave of absence, but is still considered an employee.
The employer will talk with their insurance carrier and review the health plan documents, then decide to what degree COBRA benefits are available. Contact your HR department or benefits administrator for more information.
How can I pay for COBRA?
COBRA premiums are usually paid 100 percent by the employee (or person who is covered); when people are still employed, their company pays for part of the premium. Thus, choosing to keep COBRA can be costly. However, you have some options.
First, you can pick and choose which coverages to keep and who to keep covered. That can make COBRA more affordable.
Second, if you have an HSA, you can use it to pay for COBRA premiums.
Here is something else to consider. Congress is currently working on a bill to assist workers with COBRA coverage. In 2009 during the recession, Congress passed the American Recovery and Reinvestment Act (ARRA). ARRA covered 65 percent of COBRA premiums for up to 15 months. If this current bill is passed, it may help with COBRA costs and keep you covered as the economy recovers from COVID-19.
My kids are now at home and I don’t have childcare. Can I adjust how much I put in my Dependent Care FSA?
Yes. The IRS rules are more relaxed with a Dependent Care FSA than with a healthcare FSA. In a recent blog I covered this topic.
Here is a list of reasons you can update your election (if your plan allows):
- Change in care providers. Have you started using a new care provider?
- Change to care hours. Did your care center reduce or extend hours?
- Facility closure. Did your child care center close?
- Increase or decrease in care costs. Did the cost of care go up (or down)?
There is one exception. If a relative provides child care for you, you cannot update your DCAP election for cost changes. Also, you cannot use your DCAP to reimburse yourself, your spouse, or another person living in your home for child care.
The Adventures of Captain Contributor is an award-winning benefits education program produced by DataPath, Inc.