IRS: Unused Transit Benefit May Be Used for Parking

In response to a question from a worker who, due to COVID-19, opted to drive to work instead of using public transportation, the IRS has issued a letter saying that employees may apply unused commuter transit benefit amounts to parking benefits in certain circumstances.

Rolling Over Unused Benefits

In the letter, the IRS states that an employee “is not precluded from rolling over unused transit benefit amounts through the use of another qualified transportation fringe,” such as qualified parking, if the other fringe:  Is offered by the employer’s plan; and  Does not exceed the maximum monthly amount for the respective qualified transportation fringe benefit.

Monthly Benefit Limits

The monthly maximum excludable amount for qualified parking is $270 in 2020 and 2021. The monthly limit for the other qualified fringe benefits of transportation in a commuter highway vehicle and transit passes, combined, is also $270 for 2020 and 2021.

Limitations on Use of Benefits

The letter points out the following limitations: 

• Amounts set aside under a compensation reduction agreement are not refundable other than by payment of another qualified transportation fringe under the employer’s plan; and 

• The employee must have made a valid compensation reduction election (and not have been terminated) to use compensation reduction amounts for commuting expenses in future months.

CDC Announces Shorter Quarantine Guidelines After a COVID-19 Exposure

During a recent media briefing, the Centers for Disease Control and Prevention (CDC) announced an update to quarantine guidelines, offering options for shorter quarantine periods. The CDC’s updated guidance allows for the following quarantine periods for those who may have been exposed to COVID-19 but are without symptoms: 

Ten-day quarantine period—An individual may end quarantine 10 days after exposure if the individual does not take a COVID-19 test. 

Seven-day quarantine period—An individual may end quarantine seven days after exposure if the individual tests negative for COVID-19.

While offering these shorter alternatives, the CDC still recommends a 14-day quarantine as the safest

IRS Offers Guidance on COVID-19 Employee Leave-sharing Plans

In recently issued frequently asked questions (FAQs), the IRS said employers may set up leave-sharing plans under IRS Notice 2006-59 to benefit employees adversely affected by COVID-19.

The IRS FAQs

The FAQs explain that leave-sharing plans permit employees to deposit leave in an employer-sponsored leave bank for use by other employees who have been adversely affected by a major disaster such as the COVID-19 pandemic. 

Employees depositing leave in a qualifying plan:

X  Do not include the deposited leave in income or wages.

X May not claim an expense, charitable contribution or loss deduction for the deposited leave.

The FAQs direct employers to Notice 2006-59 for information about the requirements of qualifying leave-sharing plans.

IRS Notice 2006-59 lets employees contribute leave to a bank for use by other employees affected by a major disaster.

IRS Notice 2006-59

Notice 2006-59 provides guidance on the federal tax consequences of leave-sharing plans during major disasters declared by the president. Currently, all 50 states are under a presidential major disaster declaration.

The notice lists eight features these plans must have for donor employees not to be taxed on donated leave. Among them are that use of donated leave be limited to employees for whom the major disaster has caused a severe hardship, requiring the employee’s absence from work; that the plan not allow a donor to deposit leave for transfer to a specific leave recipient; and that employers make a reasonable determination, based on need, as to how much leave each approved leave recipient may receive.

Trump Signs Executive Order Permanently Expanding Telehealth Benefits

President Donald Trump recently signed an executive order aimed to improve telemedicine and rural health care access. The order expands telehealth benefits for Medicare recipients past the public health emergency (PHE) declaration for the coronavirus (COVID-19) pandemic, particularly addressing health care access in rural communities.

Previously, Trump had expanded Medicare telehealth coverage, which offered expanded benefits and suspended restrictions on 135 health care services offered via telehealth to Medicare beneficiaries. This temporarily allowed recipients to receive a wider range of services. This executive order extends these flexibilities and moves to expand telehealth benefits permanently, and increase access and choices for seniors.

The Centers for Medicare & Medicaid Services (CMS) Releases Proposed Rule

Shortly after the executive order, the CMS issued a press release proposing a rule which reduces the clinician burden in rural areas. The CMS notes that telehealth can help address current health care challenges. "Telemedicine can never fully replace in-person care, but it can complement and enhance in-person care by furnishing one more powerful clinical tool to increase access and choices for America's senior," according to CMS Administrator Seema Verma.

The CMS’ proposal permanently allows for some services to be done via telehealth, including certain types of home visits. The proposed adjustments also help to ensure that the CMS appropriately recognizes the types of care where clinicians need to spend more face-to-face time with patients, including primary care and complex or chronic disease management. The CMS’ recent press release notes that these efforts help address health care challenges in rural areas, where access to health care providers often is limited.

According to a press release, the Centers for Medicare & Medicaid Services (CMS) is proposing to allow specified services to be offered via telehealth permanently.

The Expansion of Telemedicine

According to the U.S. Department of Health and Human Services (HHS), Medicare primary care visits have shifted toward the telehealth format, with 43.5% of Medicare primary care visits taking place virtually in April—less than 1% had been virtual in February. As the use of virtual health care has expanded in response to COVID-19, many health care providers have advocated for expanded use of telehealth after the PHE declaration. Though details regarding how telemedicine will impact Medicaid recipients continue to adjust, this executive order takes a step in the direction of expanding access to telemedicine services.