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Presbyterian Church (U.S.A.) congregations, employers, and affiliated organizations are making difficult decisions about staffing, including layoffs, reduction in hours, and furloughs.

When making these difficult decisions, keep in mind that the Board of Pensions has suspended the required 20-hour rule. Therefore, if you have an employee with benefits coverage working more than 20 hours, and you reduce those hours to less than 20, the employee can maintain benefits, provided the dues remain paid. However, the employer may not be eligible for the federal Paycheck Protection Program (PPP) loan forgiveness, which requires that employers continue to pay at least 75 percent of salary.

With a furlough, you can reduce hours to zero and still maintain the active status of an employee for benefits purposes without the need to continue pay, provided the dues are paid on the position.

And finally, once a layoff or termination decision is made, the employee no longer remains eligible for benefits through the Board.

Reduced hours, furlough, and layoff: What’s the difference?

Understanding terms is the first step in understanding your options.

  • Reduced hours. The employee is working and is being paid but on a reduced schedule. The Board will waive the hours requirement to participate in the Benefits Plan for members who had been covered. In addition, employers may be eligible for support through the Families First Coronavirus Response Act (FFCRA) and CARES Act relief programs. See below.
  • Furlough without pay. The member is no longer working and no longer receiving a paycheck. However, the Board will waive the hours requirement to participate in the Benefits Plan for members who had been covered so employers may continue to provide or offer benefits to these members as long as dues remain paid. See below.
  • Layoff. This is the same as a termination. All benefits through the Board end; members have the option to continue medical coverage through Medical Continuation.


It’s important to note that in the case of a layoff, employers are not eligible for any of the federal programs: Paycheck Protection Program (PPP loan),  paid leave tax credit or employee retention credits. In some cases, when an employer decides to furlough employees, if it meets certain criteria, it may be eligible for some federal programs.

This chart outlines the effect of a reduction in hours or a furlough on a member’s benefits through the Board of Pensions.

Benefits impactReduction in work hours or furlough without pay
Cafeteria Plan (section 125 plan)A reduction in work hours or a furlough that affects eligibility for coverage would qualify as a midyear event that would allow for changes in salary deductions and/or employee contributions.
Benefits coverage continuationThe Benefits Plan requirement to be regularly scheduled to work for 20 hours per week is suspended until further notice for those who were previously covered.
Employee contributions for benefits coverageThe employer may pay 100 percent of dues/premiums in situations of reduced hours or furlough. Or, the employer may reduce or elect to waive employee dues contribution (or premium) or defer payment of the employee portion for healthcare coverage for the duration of the furlough. The employer is required to pay the Board the full dues amount unless the employer has received a waiver or deferment.
Health savings account, healthcare flex spending accountReduction in work hours is a qualifying event for midyear changes in salary deductions.
Dependent care flex spending accountClosures of school and daycare are qualifying events for midyear changes in salary deductions.

Find an online copy of this article – and other Board of Pensions information related to the coronavirus crisis –