Health Plan Coverage and Leave Benefits Mandated by the Federal Coronavirus Act
Mar 25, 2020
President Trump signed the Families First Coronavirus Response Act (FFCRA) on March 18, 2020 following its passage by both houses of Congress. FFCRA includes employer mandates for expanded leave requirements under the Family and Medical Leave Act (FMLA), emergency paid sick leave, and health plan coverage of COVID-19 testing. We have summarized in the chart below the key provisions of these employer mandates.
| Provision | Expanded FMLA (FFCRA – Division C) | Emergency Paid Sick Leave (FFCRA – Division E) | COVID-19 Testing (FFCRA – Division F) |
|---|---|---|---|
| Who Must Comply? | Private sector employers with fewer than 500 employees and state and local government employers | All health plans, including insured, self-insured, grandfathered, and government health plans | |
| Who is Exempt? | Employers of healthcare providers and emergency responders. DOL may also authorize exemptions for employers with fewer than 50 employees if compliance would “jeopardize the viability of the business as a going concern” | No exemptions | |
| What is Required? | FFCRA amends the FMLA to include up to 12 weeks of leave for a “qualifying need” related to COVID-19. Employees who have been employed for less than 30 calendar days do not qualify for this benefit.
Qualifying need means the employee is unable to work (or telework) due to a need to care for a child under 18 whose school or place of care is closed due to a COVID-19 public health emergency. The first 10 days of leave may be unpaid. After 10 days, leave pay equals 2/3 of regular pay up to $200 per day and $10,000 in aggregate. |
Employers must provide two weeks of paid sick leave if needed for COVID-19 symptoms, diagnosis, or quarantine or isolation order.
Sick pay equals an employee’s regular rate of pay (under the FLSA) up to $511 per day and $5,110 in aggregate. Employees may also elect to take sick leave during the first 10 days of a COVID-19 FMLA leave or to care for someone under a COVID-19 isolation or quarantine. In such cases, the sick pay is 2/3 of normal pay up to $200 per day and $2,000 in aggregate.
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Health plans must cover in full COVID-19 testing, including the cost of a provider, urgent care, or emergency room visit for testing. The FFCRA prohibits any participant cost sharing or prior authorization requirements for these services. |
| When is it Effective? | 4/1/2020 – 12/31/2020 | Effective upon enactment for the duration of the public health emergency (as determined by HHS) | |
| Who Pays for it? | Employer costs are eligible for refundable Social Security payroll tax credits. Employer expenses that are eligible for the refundable credit include 100% of mandated leave and sick pay and a pro-rata share of health plan premium attributable to mandated leave periods. Government employers are not eligible for the tax credits. | Health plan sponsors | |
A few clarifying notes on these mandates may be helpful:
- The calculation of the 500-employee threshold is determined using FMLA rules, not the Internal Revenue Code controlled group rules that often apply to employee benefit plans.
- For the purpose of the expanded FMLA leave eligibility, the FFCRA defines a public health emergency as a COVID-19 emergency declaration by a Federal, State, or local authority. Therefore, the expanded leave eligibility could remain in effect in some regions even if HHS determined that a national emergency no longer existed.
- The Departments of Treasury, Labor, and Health and Human Services are expected to issue regulations further clarifying the provisions of FFCRA. The DOL has issued its first regulatory guidance in the form of fact sheets, an FAQ, and related links to relevant material, which can be found at this DOL website page: dol.gov/agencies/whd/pandemic.
This article provides a brief informational summary of the employee benefit provisions of FFCRA. It does not, and is not intended to, constitute legal advice. BPAS is not authorized to practice law.
Steve Chase is a Senior Vice President with BPAS Healthcare Consulting Services.
Updated: 4/2/2020