The coronavirus pandemic has had a significant impact on nearly all aspects of employment, including employee benefits. As COVID-19 continues to spread and impact the health of millions worldwide, employees remain concerned about how the virus will affect their medical coverage, retirement plans, and health privacy. COVID-19 affects all employees differently; therefore, it is important to be aware of how your workplace has been impacted and whether or not your benefits are at risk.
Potential Affected Areas
If you receive employee benefits, you may be wondering if you will be affected by COVID-19 and what you can do to minimize any damages. Mass layoffs and closures have taken place across the United States with an estimated 48 percent of businesses in the U.S. temporarily closed according to a National Bureau of Economic Research (NBER) working paper issued in April 2020. Businesses are still unsure when they can continue normal operations leaving many employees on edge about their ability to earn a living and receive the benefits in which they are entitled.
COVID-19 has impacted many areas of employment, with the most affected areas encompassing health and retirement. Many small businesses in the U.S. have already taken the necessary steps to acquire funding through the CARES Act. Certain programs under the CARES Act, such as the Paycheck Protection Program, focus on maintaining payroll and applicable overhead meaning that employee benefits are not a top priority for many businesses struggling to stay afloat. Additionally, employees who are laid off often lose their benefits when they leave their job and with many nonessential workers still not able to return to their jobs, they remain without important benefits.
Many employees have been furloughed as non-essential businesses close, impose reduced hours, or operate with fewer staff members due to social distancing. For some of these workers, group medical plan coverage may no longer be available. If you have been furloughed, carefully review your group medical plan document or certificate of health coverage to determine if you are eligible for medical coverage even if you are no longer “actively at work.” If the coverage period ends before you return to work, you could lose coverage as your plan may be terminated.
If your employer has a self-funded health plan, you may be able to keep your employee health insurance. Self-funded employers often have the option to waive eligibility conditions which would allow furloughed employees to maintain their health coverage. Some employees may also have to leave their position due to getting a diagnosis of coronavirus or experience coronavirus-like symptoms; for these workers, group medical coverage may or may not be available based on your plan. If your employer is sponsoring a healthcare plan that is subject to the Family and Medical Leave Act (FMLA), you may be protected against medical coverage loss.
COVID-19 has affected more than just employee health coverage; many employees have also suffered from changes to their retirement plans. The average matching contribution for a 401k is 4.3 percent of the employee’s pay with some employers matching dollar per dollar up to a maximum of 3 percent. Due to the recent economic climate, some businesses may choose to cancel their 401k plans completely, significantly impacting an employee’s ability to save for their future. If your employer does have plans to terminate your 401k, he or she must first provide you with a notification about the termination, as well as a date of when the plan will be stopped.
Even if your employer chooses not to cancel your 401k, he or she may make the decision to suspend or cancel matching contributions. These modifications to a 401k plan can make it challenging to continue saving at a steady pace and may force some workers to stop making contributions themselves due to lack of incentive. If your job is stable, you may want to continue contributing to your retirement plan even if your employer chooses to cancel, suspend, or reduce matching. Changes in match amounts are likely to be temporary.
Due to the rapid rate in which the coronavirus is spreading across America and the one million-plus U.S. residents who have been diagnosed with the condition, many employees have concerns over HIPAA regulations. If you have been diagnosed with coronavirus or have shown symptoms that indicate that you may have the illness, you may be wondering if you are protected under HIPAA laws. Without this protection, your health insurance could be compromised; it is important to understand that workers are still protected under HIPAA and that COVID-19 should not impact a person’s right to health privacy.
If an employee presents with symptoms that are known to be consistent with the coronavirus, and if the employer sponsoring the group medical plan learns of the illness, the health insurance plan is considered to be protected health information. This means that this information can only be disclosed to the employee’s family members and other people who may be directly involved in the employee’s care. Any information that is learned by an employer through any means with the exception of the group medical plan is considered to be confidential. Employers who learn about an employee’s symptoms should not share this information.
Work with a Business Benefits Group
Employee benefits are often one of the first things that a person considers before accepting a job. Benefits such as health insurance, retirement, and many others allow workers to maintain comfort and good health. The rapid disruption to the economy caused by COVID-19 has jeopardized employee benefits. As the virus continues to spread, employers and employees should make it a priority to review their employee benefits. To learn more about how COVID-19 can affect employee benefits, work with the business benefits experts at Business Benefits Group today.