Understand the retirement, health plan changes in new economic stimulus law.

Most Americans' knowledge of the $2.2 trillion Coronavirus Aid, Relief and Economic Security Act stops at the $1,200 or $2,400 stimulus checks they're receiving from the U.S. Treasury. But the new law also includes several measures that directly affect employee benefit programs.

The CARES Act is designed to encourage employers to avoid laying off workers because of the pandemic fallout. It substantially expands federal support for unemployment benefits and includes these key provisions:

Retirement benefits: Employees can now make early withdrawals of up to $100,000 from 401(k) plans without incurring the usual 10% penalty. Income attributable to distributions is taxable over three years. Employees have three years to recontribute their funds.

Coronavirus-related distributions can be made to employees:

* Who are diagnosed with COVID-19, or whose spouse or dependent is diagnosed with it.

* Who suffer financial hardship because they were quarantined, furloughed, laid off, had hours reduced or were unable to work due to lack of child care.

In addition, 401(k) plans can make coronavirus-related loans to employees, up to $100,000.

Health plan provisions: High-deductible health plans and health savings accounts normally can't reimburse employees for first-dollar coverage. However, for plan years beginning on or before Dec. 31, 2021, HDHPs/HSAs can cover first-dollar costs for telehealth services. The services don't have to be COVID-19-related.

Educational assistance: Through Dec. 31, 2020, employers can make tax-free reimbursements or payments on employees' outstanding student loans, up to the $5,250 cap on employer-provided educational assistance.

4 other important provisions in the CARES Act

1. Employee retention credit. For wages paid after March 12, 2020, through the end of the year, employers that continue to pay and provide health benefits to employees who were furloughed or whose work hours were reduced qualify for a refundable tax credit against their share of Social Security taxes.

   For employers with up to 100 FT employees, the credit equals 50% of employees' wages and health benefits, up to $10,000 per worker. Catch: If you take out a loan, you can't take the credit. Learn more at www.tinyurl.com/CAREScredit.

2. Paycheck protection loans. Small employers that take out loans through June 30, 2020, to continue employees' pay will have those loans guaranteed by the federal government, up to 100% of their payroll costs. In addition to wages...