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CARES and Practical HR Considerations During COVID-19: THRM (The HR Manager) COVID-19 Bulletin #3

The 2 Trillion-Dollar Economic Stimulus package, Coronavirus Aid, Relief, and Economic Stability (CARES) Act, is an 880-page, multi-faceted aid package providing benefits to individuals, businesses and industries as well as additional support for the healthcare system. Some of CARES’ key provisions for businesses and individuals are recapped below. Additionally, we’re providing answers to questions that THRM consultants have been receiving such as how to handle I-9's during COVID-19 and the proper way to document an FFCRA leave request.




Small employers with less than 500 employees including non-profits (some limited exceptions); Sole proprietors; Self-employed; 1099 contractors

Key Provisions:

• Apply through any SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating

• Loans can be used to pay payroll costs, including benefits as well as rent, utilities, interest on mortgages and interest on certain debts

• Unlike traditional SBA loans, there is no requirement for personal guarantee or collateral

• Loans will be fully forgiven when used for payroll costs (at least 75%), interest on mortgages, rent and utilities; forgiveness will be reduced if full-time headcount declines or salary or wages are reduced

Notes & Resources:

  • Cannot be used in conjunction with FFCRA leave tax credits, employee retention credits and payroll tax deferrals.



Small employers with less than 500 employees including non-profits (some limited exceptions); Sole proprietors; Self-employed; 1099 contractors + must meet disaster criteria.

Key Provisions:

• Credit history and ability to repay will be considered

• Must show economic injury due to COVID-19, not other factors

• Loans do not go through lender but directly from SBA Disaster Assistance

• Eligible businesses can borrow up to $2 M at low interest rates fixed for the term of the loan with terms up to 30 years, no prepayment penalty

Notes & Resources:



Available to employers of any size who have suspended operations to some degree or experienced a loss of at least half of their gross receipts during Q1 2020. Not available to employers if they've applied for a Paycheck Protection Loan or received credits for wages under the FFCRA. Not available to governmental employers or self-employed individuals.

Key Provisions:

• Assists employers that need to cease or significantly curtail their business operations by reducing payroll taxes for employers that do not fall under other programs.

• Employers can receive a refundable tax credit equal to 50 percent of the wages paid to their employees, to a maximum credit of $5,000 per employee on wages paid after March 12, 2020 and before January 1, 2021. Not available to employers with a Paycheck Protection Loan or receiving credits for wages under the FFCRA.

Notes & Resources:



Employers not applying for debt forgiveness for the PPP Loan

Key Provisions:

• Allows employers to defer payment of payroll tax due between March 27, 2020 – December 31, 2020.

• Only applies to employer’s share of social security taxes.

• Deferred taxes must be paid in two installments: at least 50% due by December 31, 2021 and remaining 50% due by December 31, 2022.

Notes & Resources:


Many states, counties and cities are enacting their own programs and policies to support employers during COVID-19. Check your state and local government websites for details.

Notes & Resources:



COVID-19 related unemployment, includes workers not normally eligible for unemployment benefits such as contract workers, self-employed individuals, business owners, gig workers, individuals with limited work history or those who have exhausted state UI benefits.

Provisions Specific to Individuals:

• Increased benefit amount by $600/week March 29, 2020 through July 31, 2020 and from 26 to 39 weeks; this is in addition to the amount an eligible individual receives from the state.

• Eliminates 1-week waiting period.

• Fully funded by the Federal government but will be administered by the state. Eligible individuals will automatically receive the benefit if they are participating in a state program.

Notes & Resources:



Employees participating in FSAs, HRAs, HSAs or MSAs.

Provisions Specific to Individuals:

• Over-the-counter (OTC) medicine purchased without a prescription now eligible for reimbursement.

• Expands the list of qualified medical expenses to include menstrual care products.

• These are permanent changes in effect January 1, 2020.



Participants in 401(k), profit sharing, 403(b), and governmental 457(b) plans with:

• A personal diagnosis of COVID-19 by a CDC approved test

• A spouse or dependent who has been diagnosed

• Adverse financial consequences due to being furloughed, quarantined, laid off, or having their paid work hours reduced

Provisions Specific to Individuals:

• Provides access to retirement funds for coronavirus-related distributions with special provisions:

• The 10% early withdrawal penalty and 20% withholding for COVID-19 related distributions is delayed.

• Income tax and/or “repayments” can be spread over a 3 year period.

• Distributions cannot exceed 100K across all retirement accounts.

• “Repayment” of distributions are treated as rollover contributions back to the plan or IRAs.

• Required Minimum Distributions (RMDs) are waived for 2020

• Increases the limit on loans from qualified plans to $100k or 100% vested balance, delays existing loan payments due on or before 12/31/2020 for 1 year, and waives the Required Minimum Distributions (RMDs) for 2020.

Notes & Resources:

The retirement plan provisions are optional for plan sponsors to enact. Plan amendments are required but do not need to be adopted until the end of the 2022 plan year. Employers should reach out to their 401k administrator for more information.



Participants in private health insurance plans.

• All testing for COVID-19 must be covered by private insurance plans, whether they are fully insured or self-insured, without cost sharing. This includes all testing, beyond just FDA-approved testing, such as a test developer has requested (or intends to request) emergency use authorization, or tests developed in and authorized by a state to diagnose COVID-19.

• Provides coverage of preventive services and vaccines with no cost sharing for the coronavirus once they become available.

• Extends telehealth services to individuals participating in HDHPs with an HAS before patients reach their deductibles without jeopardizing their status. Applies to all telehealth and remote care services and is not limited to COVID-19-related services.

Practical HR Considerations During COVID-19

How can we handle I-9 verifications during the Shelter in Place requirements? DHS provided guidance on the I-9 verification process for employers and workplaces that are operating remotely during COVID-19:

1. Employee completes I-9 Section 1, per usual. 2. Employer completes Section 2 and examines documents remotely (video, email, etc...)

Within 3 days of when normal business operations resume,

1. Employee must present documents in person within 3 days of when normal business operations resume 2. Employer physically inspects documents 3. Employer completes Section 2 Additional Information and enters "COVID-19" and "documents physically examined on X (date)"

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