• Updates to Benefit Plans Due to COVID-19 CARES Act

    April 17, 2020

    ​On March 27, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law. Included in this act were a number of provisions, mandatory and optional, with impacts to the Farm Credit Foundations benefits plan.

    On April 14, the Plan Sponsor Committee chose to adopt the optional provisions below to provide the best course of action to help employees. Supporting you and your families is at the very heart of what it means to be Farm Credit.

    Medical Plan Updates

    The plan will cover 100% of testing and treatment costs for you and your eligible dependents at in-network providers. If you or your eligible dependent test positive for COVID-19 through a CDC-approved test, you will not be required to meet your deductible or out-of-pocket limit. This provision will be in place through June 30, 2020 (extended from the original date of May 31) and could be extended further.

    • 100% coverage for COVID-19 testing (includes antibody testing)

    • 100% coverage for COVID-19 related facility charges

    • 100% coverage for COVID-19 treatment

    HSA/FSA Plan Updates

    You may now use your Health Savings Accounts (HSA) and Flexible Spending Accounts (FSA) funds to purchase over-the-cover (OTC) drugs and medications without a prescription from a physician. Learn more about this change.

    401(k) Plan Updates

    In order to take advantage of these new provisions, you must meet one of the defined eligibility requirements noted in the CARES Act to be a “qualified individual”.

    New Coronavirus-Related Distribution (CRD)
    A qualified individual may:

    • Take an in-service distribution up to $100,000 with no 10% early withdrawal penalty

    • Elect no federal income tax withholding (mandatory 20% withholding waived)

    • Repay the CRD over three years into their 401(k) account

    • Stretch out income taxes owed on early distributions over three years

      • Note: These provisions are complicated and participants should seek the advice of a tax professional.

    401(k) Loans

    A qualified individual may:

    • Borrow their entire non-forfeitable account balance up to $100,000 less any outstanding loan amounts (Applies to loans taken for 180 days starting March 27, 2020)

    • Delay existing loan repayments due from March 27, 2020 to December 31, 2020 for one year

    • Not exceed the maximum number of loans (two) allowed by the plan

    If you are considering how you may access your 401(k) funds under standard provisions versus these new COVID-19 specific provisions, review this chart.

    John Hancock Retirement Plan Services will be administering these new provisions, including the self-certification process for qualified individuals. See the FAQ for additional information.