Stay Informed! Employer Considerations Surrounding:  COVID-19

FFCRA Signed Into Law

COVID-19, Employee Benefits, Trending Topics

On March 18, 2020 the United States Senate passed and President Trump signed the Families First Coronavirus Response Act (FFCRA). This law is in response to the recent COVID-19 pandemic and addresses emergency paid leave and additional Family Medical Leave Act (FMLA) provisions for employers with 1 to 500 employees.

Here are two important provisions within the law which could have immediate ramifications for your organization:

Emergency Paid Sick Leave Act (EPSLA)

This Act provides two weeks of paid sick leave for the following reasons:

  • Employee is subject to quarantine for COVID-19 (full pay)
  • Employee is advised to self-quarantine due to concerns related to COVID-19 (full pay)
  • Employee has symptoms related to COVID-19 and is seeking a diagnosis (full pay)
  • Employee is caring for an individual subject to quarantine or advised to quarantine (2/3 pay)
  • Employee is caring for a child if the school or place of care is closed due to COVID-19 precautions (2/3 pay)
  • Employee is experiencing any other similar condition as defined by HHS or DOL (2/3 pay)

For an employee to be eligible for benefits, there is no minimum length of service requirement.

Full-time employees are entitled to 80 hours of pay and part-time employees are entitled to pay for the typical hours they work in a two week period. Pay shall not exceed $511/day and $5,110 in aggregate for employee leave and $200/day and $2,000 in aggregate for caring for others.

Employees covered under a collective bargaining agreement are guaranteed this benefit as well.

Employers must provide EPSLA time in addition to any other paid time off that is already offered. Employers are prohibited from changing current leave policies by reducing the amount of leave ordinarily provided. In addition, employers are prohibited from requiring employees to take or exhaust employer-paid leave before taking EPSLA time.

Employers will be required to post a notice regarding the EPSLA. The Department of Labor will be providing a template notice in the near future.

This Act goes into effect April 2, 2020 and expires on December 31, 2020.

Employers of employees who are healthcare providers or emergency responders may elect to exclude those employees from this requirement. The Department of Labor may subsequently issue guidance excluding certain health care providers and emergency responders from employees that are eligible for this leave.

Emergency Family and Medical Leave Expansion Act (EFMLEA)

This Act expands the current federal Family and Medical Leave Act (FMLA) by expanding FMLA leave for “a qualifying need related to a public health emergency”.

The paid leave is solely for those employees that are unable to work or telework due to a need to care for a child under 18 due to closures of schools or care providers related to the COVID-19 health emergency.

  • First two weeks of leave are unpaid, but employees can use available sick, PTO or EPSLA time
  • Remaining ten weeks are paid at not less than 2/3 of the employee’s usual pay
  • Pay is not to exceed $200/day or $10,000 in aggregate
  • Employee must be with the employer for at least 30 days

Small employers with 50 or less employees could receive an exemption from the Department of Labor if the imposition of this expanded FMLA would jeopardize the viability of the business.

Employers with less than 25 employees will not be required to restore employees that take this leave to their previous position if it has been eliminated due to economic considerations during the leave.

Employers of employees who are healthcare providers or emergency responders may elect to exclude those employees from this requirement. The Department of Labor may subsequently issue guidance excluding certain health care providers and emergency responders from employees that are eligible for this leave.

Tax Credits for EFMLEA and EPSLA

Tax credits will be available for most employers providing the required paid leave. Public employers will not be eligible for the tax credit. Employers should consult with their tax professional for details on these credits.

­­COVID-19 FREQUENTLY ASKED QUESTIONS

The outbreak of COVID-19 has raised many important questions for employers to consider when making employment decisions. The following Frequently Asked Questions (FAQs) are designed to be a general guide to help you as your organization is considering decisions unique to your operations.

Please be advised that the information contained herein is subject to change. As of the date of publication, the Families First Coronavirus Response Act (FFCRA) has been signed into law. However, regulatory agencies have not issued interpretive guidance. Employers should review their own internal PTO and sick leave policies and adjust as necessary.

Here are a few FAQs to help answer common questions you may have:

Family Medical Leave Act (FMLA)/Paid Time Off (PTO)

Am I required to change my existing PTO or Sick Leave policies?

Current employer PTO and/or sick leave policies should remain in place. The FFCRA – Emergency Paid Sick Leave Act (EPSLA) prohibits employers from changing their current PTO or sick leave policies to avoid the EPSLA requirements. Employers cannot reduce their current PTO or sick leave time by the EPSLA leave time.

Emergency Paid Sick Leave Act (EPSLA)

What does the government require in terms of paid time off?

The EPSLA requires all employers with less than 500 employees to offer two weeks of paid leave for the following reasons related to the coronavirus:

  • Self-quarantine or to seek a diagnosis or preventive care for COVID-19 (full pay)
  • Care for a family member who is quarantined or seeking treatment for COVID-19 (2/3 pay)
  • Care for a child due to school closure or childcare unavailable due to COVID-19 (2/3 pay)

What is required for full-time employees? Part-time employees?

Full-time employees are entitled to 80 hours of pay and part-time employees are entitled to pay for the typical hours they work in a two week period.

What is the length of service requirement that applies to employees for paid leave under the EPSLA?

There is no length of service requirement for employees to qualify for paid leave under the EPSLA.

Do I have any EPSLA Notice obligations?

Yes. Employers will be required to post a notice regarding the EPSLA. The Department of Labor will be providing a template notice in the near future.

Is there an exemption under the EPSLA for small employers (less than 50 employees)?

No.

Emergency Family and Medical Leave Expansion Act (EFMLEA)

What does the FFCRA require in terms of FMLA?

The Emergency Family and Medical Leave Expansion Act (EFMLEA) expands current FMLA provisions to provide for 12 weeks of job protected leave for a public health emergency.  This applies to ALL employers with less than 500 employees.

A “qualifying need related to a public health emergency” applies to employees that are unable to work or telework due to a need to care for a child under the age of 18 due to school or childcare closures related to COVID-19.

Do I need to provide for paid leave under the EFMLEA?

Yes. The EFMLEA requires employers to provide 10 weeks of paid leave at 2/3 of the usual pay rate. The first two weeks are unpaid, but employees are able to use available sick, PTO or EPSLA time.

Am I required to provide paid leave for other types of FMLA?

No. For all other FMLA leaves, normal protocol should be followed. Employers may choose to tentatively approve FMLA, allowing employees more time to return the Health Care Provider Certification as health care provider offices are overwhelmed seeing a larger than usual volume of patients.

What is the length of service requirement that applies to employees for the leave under the EFMLEA?

30 days.

Is there an exemption under the EFMLEA for small employers?

Small employers with 50 or less employees could receive an exemption from the Department of Labor if the imposition of this expanded FMLA would jeopardize the viability of the business.

What if someone does not qualify for PTO or FMLA?

If you are going to lay off employees, check with your insurance carriers to determine if enrolled employees can remain on the insurance as active employees. If not, COBRA should be offered and normal protocol followed for a reduction in hours.

How does this affect someone who is already out on FMLA?

Typically the leave would continue per normal protocol. It is unclear at this time if the EFMLEA provides an additional 12 weeks if someone has already exhausted FMLA for other reasons previous to the enactment of the FFCRA. Guidance may be issued at a later date regarding job restoration if the employee’s position has been eliminated due to down-sizing or closure.

COBRA

A layoff is a temporary suspension of normal work hours for a group or groups of employees. During this time, employees are not working any hours. What does this mean for health insurance purposes?

If a group or groups of employees are not working the number of hours to satisfy eligibility requirements, it is considered a reduction of hours. Depending on the insurance policy, coverage is lost either the day of the event or at the end of the month in which the event occurred. This would constitute a COBRA qualifying event and COBRA should be offered to the employees.

If I am required to offer COBRA to employees that are laid off, can I pay a portion of the premium?

Yes. COBRA premiums can be paid either in full or partially by employers. If an employer is going to require an employee to continue to pay a portion of the COBRA premium, the employer should require payments similar to FMLA leaves.

Is the federal government offering any COBRA subsidies?

No. At this time there are no federal COBRA subsidies available.

Health Insurance Portability and Accountability Act (HIPAA)

Are employers allowed to ask employees if they have tested positive for or have been exposed to COVID-19?

Employees should report to their employer if they feel they have been exposed or test positive (including family members). Much like ADA disability and accommodation information, this information should be provided to only those employees (including leadership) with a need to know. Access to this information should be limited.

In the employer context, HIPAA only applies to self-funded health plan claim information. If employees report on their own conditions, HIPAA privacy rules do not apply.

Health Insurance Coverage

We sponsor a High Deductible Health Plan (HDHP) that is Health Savings Account (HSA) compatible. Are my employees still able to contribute to the HSA if COVID-19 testing and treatment is covered at full or reduced cost before the minimum deductible is met?

Yes. The IRS issued Bulleting 2020-15 which essentially allows individuals to continue to contribute to an HSA even if COVID-19 testing and treatment is provided at reduced or no cost by the underlying HDHP.

We sponsor a fully insured health plan in the state of Wisconsin. Is the plan required to cover COVID-19 related testing and treatment at no cost?

The Office of the Commission of Insurance in Wisconsin (OCI) issued a bulletin on 3/6/2020 encouraging (not requiring) insurers to cover COVID-19 testing and treatment. However, the FFCRA requires all private health plans to provide testing, including the cost of a provider, urgent care and emergency room visits to receive testing at no cost.

We sponsor a self-funded health plan. Is the plan required to cover COVID-19 related testing and treatment at no cost?

The FFCRA requires all private health plans to provide coverage for COVID-19 diagnostic testing, including the cost of a provider, urgent care center and emergency room visits in order to receive testing at no cost.

Short Term Disability Coverage

Are employees eligible for Short Term Disability (STD) Benefits if there is a lay-off?

For most carriers’ fully-insured STD contracts, an individual whose claim is solely due to being placed in quarantine or isolation will not be eligible for STD benefits. But, if the individual has other evidence of disability or has a confirmed diagnosis of COVID-19 he/she may be eligible, depending on the specific facts of the claim.

On short term disability policies that are self-funded, it is at the employer’s discretion. In the alternative, employer could offer paid sick days for employees. 

Key Takeaways

Now that the FFCRA has been signed into law, please note these changes take effect on April 2, 2020.  Additional guidance will be provided by the respective regulatory agencies. Organizations would be well-served to review the changes and stay informed regarding additional requirements.  Please contact your M3 account team for further guidance.

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