Employee Benefits and Policies affected by COVID-19

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The global COVID-19 pandemic has upended our daily life, resulting in heightened anxiety and fear. In addition to concerns for our physical wellbeing and that of our loved ones, many employees are also confronting financial challenges and uncertainties, there are several options available to assist university employees during this unprecedented time.

Changes to 403(b) Plan Rules

The $2 trillion Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) was signed into law on Friday, March 27, 2020. In addition to other provisions designed to provide economic assistance in response to the COVID-19 pandemic, the CARES Act provides certain relief to qualified retirement plan participants:

  • 403(b) Distributions. Participants can take distributions of up to $100,000 (in the aggregate, across all plans and IRAs) without triggering the 10% early withdrawal penalty or mandatory 20% tax withholding, so long as the distributions occur prior to December 31, 2020 and qualify as “coronavirus related distributions”. The CARES Act further provides that participants can pay the distribution related income tax over the course of three years. Additionally, participants may opt to repay the distributed amount to their 403(b) account within three years.
  • 403(b) Loans. For qualifying participants that take out a 403(b) loan between March 27, 2020 and September 23, 2020, the loan limit has been increased to the lesser of $100,000 or 100% of such participant’s vested account balance. Further, outstanding loan payments due between March 27, 2020 and December 31, 2020 may be delayed for one year, and subsequent repayments, including interest, will be adjusted to reflect the delay.
  • Suspension of Required Minimum Distribution Rules. 403(b) plans generally require that a participant’s account begin retirement distributions by April 1st of the year following the year in which the participant retires or turns age 72, whichever is later. The CARES Act provides that the minimum distribution rules will not apply to distributions that would have been required to begin in calendar year 2020 or that were required but not made prior to calendar year 2020. Subsequent required minimum distributions will be delayed by one year. Participants who want to take their required minimum distribution are able to do so.

The foregoing is a brief overview of these changes. Please contact your 403(b) plan administrator for more information, to discuss your eligibility for the distributions, loans and suspended required minimum distributions discussed above, and to review the monies available in your personal account. The Teachers Insurance and Annuity Association (TIAA) can be reached at 1 (855) 400-4294 and Fidelity Investments can be reached at 1 (800) 343-0860. For employees enrolled with Fidelity, a communication regarding Fidelity’s administration process will be forthcoming.

Changes to Over the Counter Rules

Over the Counter (OTC) medications are now reimbursable under Flexible Spending Accounts (FSA) without requiring a prescription. In addition, menstrual care products are now reimbursable as eligible expenses. These provisions are retroactive to January 1, 2020.

Emergency Employee Loans

Full-time employees hired on or before April 8, 2020 are eligible to receive an interest-free university loan in an amount up to $10,000 to assist with expenses related to COVID-19. Beginning on April 16, 2020, employees interested in pursuing this option are encouraged to contact David Martinez, Director of Payroll and Human Resources Information Systems, at [email protected] to discuss loan terms and repayment options.

Employee Emergency Fund

With the support of President Gempesaw, the Office of University Mission and Campus Ministry, the Office of Equity and Inclusion, the Division of Student Affairs and the Office of Business Affairs have collaborated on the creation of an Employee Emergency Fund (EEF) to support employees needing additional assistance due to COVID-19. The EEF will allow the university to provide one-time $400 financial assistance to such employees and will be administered by the Office of University Mission and Campus Ministry. Distributions will be made via a direct deposit into employee checking accounts. Beginning on April 16, 2020 employees interested in the EEF should complete the request form. Emergency assistance will be distributed quickly and with respect for the confidentiality of your individual situation.

Information on benefits and programs implemented by the City of New York to assist residents managing the impact of COVID-19 can be found online.

Return to Work on Campus policy series:

Social Distancing and Hygiene Guidelines

Sick Leave and Paid Family Leave for COVID-19