On the afternoon of Wednesday, March 18, in a 90-8 vote, the Senate passed the Families First Coronavirus Response Act. The legislation has now passed both the House and the Senate and has been enacted into law by the President.
The effective date is 15 days after enactment: April 2, 2020.
There are some significant obligations for employers under the new act which begin immediately. Here's a short summary:
A group health plan and a health insurance issuer offering group or individual health insurance coverage (including a grandfathered health plan (as defined under the Affordable Care Act)) shall provide coverage, and shall not impose any cost-sharing (including deductibles, copayments, and coinsurance) requirements or prior authorization or other medical management requirements, for:
- Diagnostic testing for the detection of SARS–CoV–2 or the diagnosis of the virus that causes COVID–19; and
- Items and services furnished to an individual during health care provider office visits (which includes in-person visits and telehealth visits), urgent care center visits, and emergency room visits that result in an order form or administration of diagnostic testing of SARS–CoV–2 or COVID-19.
The Act also generally provides that government programs, such as Medicare, Medicare Advantage, Medicaid, CHIP, the Indian Health Services, TRICARE, the Federal Employees Health Benefit Program (FEHBP), and the VA, must provide coverage for testing for COVID-19 without cost-sharing. States may also provide coverage under Medicaid for testing without cost-sharing for uninsured persons, and the federal government will match 100 percent of the costs.
The Act amends the FMLA to allow certain employees of employers with fewer than 500 employees and government employers to take 12 weeks of job-protected leave for an employee who is unable to work because of a bona fide need for leave to care for a child whose school or child care provider is closed or unavailable for reasons related to COVID-19.
The first 10 days of leave may be unpaid leave, while the remainder of the 12 weeks must be paid leave.
Eligible employees include those employed for at least 30 calendar days, as compared to the 12-month period under the current FMLA.
Employers of health care providers or emergency responders are exempt from providing this FMLA leave. The U.S. Department of Labor (DOL) has authority to exempt employers with fewer than 50 employees (employers that would normally not be subject to the FMLA) if the paid FMLA leave “would jeopardize the viability of the business as a going concern.”
Employers will be required to reinstate employees after their FMLA leave period ends. There are exceptions for employers with fewer than 25 employees experiencing significant economic hardship.
For the first 10 days of FMLA leave, the employee may use unpaid leave, or choose to substitute any accrued vacation, personal, or sick leave (or the emergency paid sick leave discussed below if category 5 applies). Subsequent to the first 10 days, employers must provide paid leave for not less than two-thirds of an employee’s regular rate of pay based on the number of hours the employee would otherwise be normally scheduled to work. The amount of paid leave is capped at $200 per day and $10,000 in the aggregate.
For variable hour employees, the average weekly hours are calculated based on a 6-month lookback period ending on the day the employee takes the FMLA leave (or a reasonable estimate if they have not completed six months of employment).
Employers with collective bargaining agreement (CBA) employees can comply with the Act by contributing to a multiemployer fund, plan, or program that provides paid leave based on hours worked under the agreement.
The FMLA provisions are effective “not later than 15 days after the date of enactment” and expires on December 31, 2020.
Emergency Paid Sick Leave
The section requires employers with fewer than 500 employees to offer employees, regardless of how long they have been employed by the employer, paid sick leave in the following circumstances:
- The employee is subject to a federal, state or local quarantine or isolation order related to COVID-19;
- The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
- The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis
- The employee is caring for an individual who is subject to a federal, state or local quarantine or isolation order, or the individual has been advised to self-quarantine due to concerns related to COVID-19;
- The employee is caring for a son or daughter if the school or daycare for their child has been closed or the child’s care provider is unavailable due to COVID-19 precautions; or
- The employee is experiencing any other substantially similar condition to be defined by the U.S. Department of Health and Human Services (HHS) in consultation with Treasury and the DOL.
The number of hours available are as follows:
- For full-time employees: 80 hours
- For part-time employees: the average number of hours they work in a 2-week period
The DOL has the authority to draft exclusions for the following:
- Health care providers and emergency responders
- Businesses with fewer than 50 employees where providing emergency paid sick time would jeopardize the viability of the business
Employers are prohibited from requiring employees to use other paid leave provided by the employer before using the new paid sick time. Additionally, it’s unlawful for an employer to “discharge, discipline, or in any other manner discriminate against” any employee who (1) takes a leave or (2) has instituted a complaint regarding the employer’s failure to provide the requisite leave.
The dollar amounts of pay available to an employee are as follows:
- Emergency sick time relating to an employee’s condition (points 1-3 above) is calculated based on the employee’s regular rate or applicable minimum wage, whichever is greater, but not required to exceed $511 per day and $5,110 total
- Emergency sick time relating to caregiving (points 4-6 above) is calculated based on 2/3 of the employee’s regular rate or applicable minimum wage, whichever is greater, but not required to exceed $200 per day and $2,000 total
The paid leave provisions go into effect “not later than 15 days after the date of enactment,” which would be April 2, 2020, and expires on December 31, 2020. The DOL has announced a 30-day non-enforcement policy while they focus on compliance assistance.
There are refundable tax credits for both the paid sick leave and emergency FMLA provisions to assist employers with the cost of these requirements.
Under the Families First Act, employees who have been employed by the employer for at least 30 calendar days are eligible for Expanded FMLA Leave. The CARES Act amends the Expanded FMLA Leave rule to extend paid leave to employees who
- Were laid off on or after March 1, 2020.
- Had worked for the employer for at least 30 of the last 60 days prior to their layoff.
- Were rehired by the employer.
Disclaimer: Please note that this is not all-inclusive. Our guidance is designed only to give general information on the issues covered. It is not intended to be a comprehensive summary of all laws which may apply to your situation, treat exhaustively the subjects covered, provide legal advice, or render a legal opinion. Consult your legal advisor regarding the specific application of the information to your plan.