There are provisions in the Coronavirus Aid, Relief and Economic Security (CARES) Act, signed into law Friday, that advisors may want to let their clients know about, according to planner Jeff Levine, lead “financial planning nerd” for Kitces.com and director of advanced planning for Buckingham Wealth Partners.
These provisions may be overlooked amid the bigger parts of the $2.2 trillion law, he said Friday during the Kitces.com webinar “Coronavirus Stimulus Bill – New Rules, Planning Strategies and Opportunities.”
Student Loan Deferral
The law’s student loan deferral, in which no federal payments are required until Sept. 30, 2020, is “going to be one of your action items with clients,” he said, stressing: “You need to get on the phone with clients who have federal student loan payments. Why? Because even though the payments are not required and even though no interest will accrue during this period of deferment, the payments that your clients make are not going to stop unless they stop them themselves. So, they’ve got to contact their loan provider or go online” to stop the payment if they want to take advantage of that option.
Although clients do not have to defer their student loan payment, he noted “it’s an interest-free loan right now” and, “if you’re tight on cash, you definitely should” take advantage of that option.
Clients who you should urge to stop making any loan payments now are those who will qualify for 100% loan forgiveness, including those who work in public service, he said. April through September this year “will count towards meeting the requirements to have that debt abated — so these six months are like six free months towards qualifying for whatever program they’re in,” he pointed out, adding: “If you’re going to have all your student debt waived, why pay more of it now … when it’s all going to go away anyway?”
Therefore, “that would be your highest priority call” to a client, followed by “individuals who need the cash flow and, after that, everybody else on your contact list who you know has student loans,” he said.
Health Care Help
Advisors may want to also make sure their clients are aware of the law’s health care related provisions, he pointed out. For instance, the definition of medical expenses has been expanded under certain medical plans to include over-the-counter medications and menstrual care products, he noted. Medicare beneficiaries and individuals with high-deductible health plans that are health savings account-eligible will also receive no-cost COVID-19 vaccines when available, he noted.
“Another nice call” advisors can make is to let clients know about the law’s provision that Medicare Part D recipients can request up to 90-day supplies of medicine instead of the 30-day supplies that individuals typically get from their pharmacies, he said. Older clients, after all, “may not to want to go out a lot right now” due to that demographic’s high risk of COVID-19 complications, he noted.