When President Trump declared the Covid-19 pandemic a National Emergency in accordance with the Robert T. Stafford Disaster Relief and Emergency Assistance Act, he authorized employers to establish a Code Section 139 Qualified Disaster Relief Program (“Section 139 Program”). A Section 139 Program allows employers to pay or reimburse employees on a tax-free basis for certain personal and living expenses incurred as a result of a “qualified disaster.”
OCA is introducing the Employee Relief Program (ERP) to help employers establish a Section 139 Program.
Our ERP offers employers more flexibility than cash or gift cards to provide financial aid to their employees and/or terminated/furloughed employees. Unlike cash or gift cards, employers control how the funds can be used, preserving unspent dollars while gaining access to real-time insights into employee spending trends. Employers determine the amount they wish to contribute per employee, as well as the type of eligible expenses they want to allow – from groceries and home office supplies to educational supplies and more.
OCA will be waiving all monthly participant fees (regardless of group size) for the first 3 months of the ERP benefit. There will be a one-time pass-through fee of $5 per debit card issued. Keep in mind, the pre-tax benefit will only be available for as long as the nation remains under a federally declared disaster. Therefore, we do not anticipate this program lasting for more than a few months.
Frequently Asked Questions
What is the Employee Relief Program (ERP)?
The ERP is a new account-based benefit product that allows employers to offer targeted financial assistance to employees. The employer simply designates the amount they wish to contribute per employee and chooses the categories of expenses they wish to cover. Employees easy access to their “relief” funds in the form of a convenient debit card called the Employee Care Card – supported by a simple online experience.
How much does OCA’s ERP cost?
OCA will be waiving all monthly participant fees (regardless of group size) for the first 3 months of the ERP benefit. There will be a one-time pass-through fee of $5 per debit card issued and/or replaced. Debit card issuance fees will be invoiced to the employer.
How does the employer funding work?
Employers will have to pre-fund the full ERP funding amount in advance of the ERP program “going live”. Any unused funds will be returned to the employer when the benefit program is no longer offered.
So, is the ERP a tax advantaged account?
Now that the COVID-19 has been declared a national emergency, Internal Revenue Code Section 139 can be used to allow employers to make tax-free payments or reimbursements to employees as “qualified disaster relief payments.” If used outside of COVID-19 to provide financial support for employees for other reasons – then it should be treated as taxable income, the same way you would treat a bonus.
What can it be used to purchase?
OCA’s ERP program supports several different configurations – to allow employers to select the merchant/spend categories they believe will be most impactful to their employees. Examples of those options include: Grocery & Pharmacies, General Retail & Office supplies, Education, Clothing, Utility and Insurance expenses, & Healthcare
Where is the debit card accepted?
The ERP Employee Care Card can be used at all online and brick-and-mortar merchants that accept Mastercard – whose categories align to the spending restrictions of the employer’s program. For example, if the employer has designated the funds can only be used for groceries – then the card will be restricted to work only at grocery merchants (such as ShopRite, Amazon Fresh, etc.).
Are there any notable merchants that may not accept this type of card?
In the setup of the program, the employer dictates what categories of spending will be allowed – that, by definition, restricts the set of merchants that can accept the card. However, within an allowed spending category, there are not specific merchants that should be excluded. It is important to understand, however, that spending is restricted based on the categorization of the merchant themselves, not the SKU of the product being purchased. So, if the consumer is attempting a transaction at a product that is ancillary to the primary category of the merchant, there is a chance the transaction could be denied. Some merchant categories specifically excluded include airline, transportation, rental cars, and hotels but under certain circumstances, these may be reasonable expenses. OCA can allow additional MCCs for the program overall or exceptions can be made for specific individual cards, using Merchant exceptions
Are there any limits or minimums?
Employer groups must contribute a minimum of $250 per employee. Aside from the spending categories allowed by the program (ex. grocery, education, etc.), there are no limits on the employees’ daily spending other than those monitored for potential fraudulent use.
How will this relate to my existing account-based benefit programs?
This program is a standalone program to keep it separate from other funds and not confuse participants who have a benefit account. A different card for ERP vs. FSA, etc. keeps things clean for employers, the employee and dependents. To create a unique program and experience, debit cards, employer and participant experiences (ex. portal and mobile) will be separate from your benefit accounts.
If somebody already has another account/card with OCA, will this account show up in their existing portal/mobile app?
No, existing participants will receive a separate portal login, specifically to access their employee care card.
How are contributions made to the card?
For this program, all accounts are pre- funded in full before the cards are issued. As part of the group setup process, the employer must prefund the with the full amount of the funds being loaded to the cards.
Can the card be reloaded?
Yes. The contribution schedule should be discussed during the employer setup process. Account funding can be a one-time event, a recurring event – or can be done on an ad hoc basis, as the situation evolves.
Can the employee submit a claim for manual reimbursement – or is debit card the only way to access funds?
No. While OCA can support claims for any account type, the program must be setup to only allow access to funds through the debit card to keep the price of the ERP product low.
How can an employee check their balance?
Participants can check their balances through the IVR. The employee will also have online access to their account via our portal – where they can check balances, view recent transactions, and more.
What reporting is available for employers? Is this a separate login from my existing employer portal/reporting access?
The employer (just like the consumer) would have a different login from their other benefit account programs in order to access reports – however, the standard set of reports are available. The enrollee account balance report is a perfect report to monitor and report on the use of funds under the program.
What happens once the program is launched – what will the employee receive?
Once the employer setup is complete, the employee will receive their debit card in 7-10 business days just like another card issued from OCA.