The Families First Coronavirus Response Act signed by President Trump requires most health plans, including employer-sponsored plans, to cover costs related to COVID-19 testing.
Here’s a closer look at that provision as well as other parts of the Families First legislation.
The Short Story
Most group health plans (both fully-insured and self-funded), government-sponsored coverage, and individual health plans must cover costs associated with COVID-19 diagnostic testing with no cost-sharing.
The Details
The regulations in the Families First act indicate that such testing must be available without “any cost sharing (including deductibles, copayments, and coinsurance) requirements or prior authorization or other medical management requirements.” This includes related costs when an individual visits a medical provider’s office, urgent care, or emergency care, or uses telemedicine for the diagnostic testing. However, any actual treatment following a positive diagnosis is not required to be covered and therefore will vary from plan to plan.
Also, unless agencies issue guidance indicating otherwise, it appears these requirements do not apply to excepted benefits, short-term health plans, retiree-only plans, or healthcare sharing ministries.
Keep in mind that under IRS guidance provided recently in Notice 2020-15, the coverage of COVID-19 related to testing or treatment prior to meeting an HDHP’s plan deductible will not interfere with an individual’s eligibility to contribute to a health savings account (HSA).
Employers are encouraged to communicate to plan participants that this coverage is available without cost-sharing.
Effective Date: No later than 15 days after the date of enactment and continuing until the Secretary of the Department of Health and Human Services determines that the public health emergency has expired.
The Short Story
Private employers with fewer than 500 employees and public employers of any size must allow employees to take up to 12 weeks of job-protected leave for certain qualifying reasons beyond what is currently permitted under the Family Medical Leave Act (FMLA), including the need to stay home to care for a child due to a “public health emergency” that would include the closure of schools or daycare facilities. Affected employers are eligible for a refundable payroll tax credit to cover the costs of the extended paid leave and related employer health insurance costs.
The Details
Typically, the FMLA does not apply to private employers with fewer than 50 employees (although it does apply to all public entities such as schools and government entities regardless of size). However, these special FMLA protections will generally apply even to small private employers with fewer than 50 employees. The Act allows the Secretary of Labor to provide an exemption for small employers (those not normally subject to FMLA, if the expansion of protected leave “would jeopardize the viability of the business as a going concern.”
That being said, in the absence of such agency guidance providing that exemption, all public employers and private employers with fewer than 500 employees, including those with fewer than 50 employees, must assume they should provide protected leave (including pay and ongoing group health plan coverage) for certain employees through the end of 2020.
Employees Eligible for FMLA Protected Leave
Protected leave must be provided to an employee if:
For employees who qualify, the first 10 days of leave may be unpaid, although employees could substitute any accrued vacation, personal, or sick leave (including sick leave as provided under the Act). The remainder of the protected leave (up to 12 weeks) must be paid at no less than 2/3 of the employee’s regular rate of pay based on the number of hours the employee is normally scheduled to work, but no more than $200 per day, or $10,000 in the aggregate. This is different from standard FMLA-protected leave for other qualifying reasons, which does not require the employer to provide paid leave.
Note that employees not eligible for the expanded leave protections might also qualify for FMLA-protected leave when a COVID-19-related illness qualifies as a “serious health condition” under existing FMLA rules.
Health Insurance Requirements During an FMLA Leave
Employers must generally reinstate employees after their FMLA leave period ends, but there is an exception for small employers (those with fewer than 25 employees) required to offer this extended leave who are experiencing significant economic hardship.
Effective Date: No later than 15 days after the date of enactment through the end of 2020.
The Short Story
Under the Families First law, private employers with fewer than 500 employees and public employers of any size must provide paid sick leave for all full-time and part-time employees for a number of COVID-19-related reasons. Affected employers are eligible for a refundable payroll tax credit to cover the costs of the paid leave and related employer health insurance costs.
The Details
Paid Leave Requirements
Private employers with fewer than 500 employees and public employers of any size must provide paid sick leave for all full-time and part-time employees who meet one of the following qualifying reasons:
Employees are eligible regardless of how long they have been employed by an employer, and an employer may not require an employee to use other paid leave provided by the employer before using the new emergency paid sick leave.
Employees who qualify for this paid sick leave should be paid as follows:
If the employee is sick or subject to quarantine, sick pay is calculated based on the employee’s regular rate of pay or, if higher, the applicable minimum wage, up to $511 per day and $5,110 in the aggregate. If the employee is absent to care for a family member or child, sick pay is based on 2/3rds of the regular rate of pay up to $200 per day and $2,000 in the aggregate.
An employer of an employee who is a healthcare provider or an emergency responder is not required to provide the paid sick leave to such employee.
Effective Date: No later than 15 days after the date of enactment through the end of 2020.
Tax credits will be provided to employers subject to these expanded FMLA and paid sick leave requirements to offset the cost.
The employer refundable tax credits may be applied against the employer portion of Social Security taxes equal to the “qualifying” paid leave wages, and the amount of related employer’s contributions toward group health costs. The IRS is expected to release guidance on the calculation method and process for employers to collect the credit.
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