The COVID-19 pandemic has put unprecedented pressure on people, families, businesses and the economy at large. Employers are looking for ways to help their employees through this crisis—with paid time off or other types of assistance programs. To help employers support their employees, Alight now offers the Employee Care Card. This solution gives employers the ability to provide financial assistance to address employees’ most basic needs during this time of crisis.
Additional financial support for employees
IRC Section 139 may allow employers to offer tax-free funds to employees for Qualified Disaster Relief (QDR) payments—as long as expenses are for reasonable and necessary personal, family, living or funeral expenses incurred as a result of COVID-19.* Or, employers can offer post-tax funds for specific expenses that they feel are critical during this pandemic or to promote employee wellbeing. Employers can designate a specific amount to offer employees and stipulate the allowed expenses.
Clearly defined eligible expenses
Employers can control how employees spend these additional funds. Restricting purchases to specific merchant types, such as grocery stores or other specific retailers, allows employers to ensure employees are using these funds for critical items only.
Here are a few examples of expenses employers may consider covering:
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Grocery items, like food and beverages, toilet paper and hand sanitizer.
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Office supplies, which can enhance employees’ work-from-home environments and optimize productivity.
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Unforeseen education and childcare expenses due to school closings.
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Supplementing employee healthcare needs with additional dollars.
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Utilities and other critical home expenses that may increase as a result of working from home.
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Extra uniforms and work clothes for employees who are serving on the frontline.
Easy access to funds
Employees may look to employers for help and support during these trying times. It is important to enable your employees to easily access and use these additional funds. Whether it be taking away substantiation requirements or not requiring claims submissions, simplifying the process can ease stress and anxiety your employees may feel.
Employers can make spending these funds easier by providing a stored value card so employees can swipe the card at approved merchants instead of their debit or credit cards. If employers use Alight’s Employee Care Card, they can administer their employee financial assistance programs with maximum flexibility and control, while providing their employees with an intuitive and paperless experience.
The Employee Care Card is a stored value card that provides a simple experience for employees—no claims submissions needed, no substantiation requirements and it’s accepted at most major merchants. Employers have control over the amount of dollars they offer per employee and which expenses the card can be used for. Providing cash disbursements through payroll may seem easier than providing a stored value card. However, the card actually creates additional visibility for employers:
- Employees are physically reminded of your support each time they use the card.
- QDR payments are not subject to payroll withholding or taxes nor is reporting required on employees’ Form W-2.*
- Employers have a real-time view into how employees are spending funds and can easily reload the card if the pandemic lasts longer than expected.
You can show your employees how much you care with this additional financial support during the COVID-19 crisis.
* Employers should consult qualified legal/tax counsel for tax advice to determine if Section 139 is applicable.