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March 20, 2020

Families First Coronavirus Response Act Signed Into Law

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On Wednesday, President Trump signed the Families First Coronavirus Response Act into law. The Act is the second emergency aid package in response to the coronavirus.

 

The first element of the Act requires most health plans, including employer sponsored plans, to cover the costs of testing for COVID-19 with no cost sharing, including no deductibles, co-pays or co-insurance. It also prohibits plans from requiring prior authorization for testing. The Act does not require plans to cover treatment after a positive diagnosis of COVID-19, so it will continue to vary from plan to plan. The requirements do not apply to excepted benefits, short term health plans, retiree-only plans or healthcare sharing ministries.

 

The effective date for the free testing portion of the bill is 15 days after signature until the public health emergency has expired.

 

Part two of the Act relates to expansion of the Family Medical Leave Act (FLMA). The new Emergency Family and Medical Leave Expansion Act requires private employers with fewer than 500 employees and public employers of any size to allow employees to take up to 12 weeks of leave with their jobs protected. This leave can be taken for qualified reasons beyond FMLA, including staying home to care for children due to school or daycare closures for a public health emergency. Affected employers are eligible for refundable payroll tax credits to cover the costs of extended paid leave.

 

This expansion of FMLA changes eligible employees to include those who have been employed for 30 calendar days, not the standard 12 months. This expansion is not related to whether the employee has COVID-19 or is required to isolate, but rather applies to employees unable to work to care for children whose schools are shut down due to the emergency.

 

The first 10 days of leave for eligible employees are unpaid, though that can be substituted by accrued vacation, sick or personal time. The remainder of the up to 12 weeks of protected leave must be paid at no less than 2/3 of the employee's regular pay. However it may not exceed $200 a day or $10,000 in the aggregate. This is unlike standard FMLA, which does not require paid leave to be provided.

 

Group health plans are still required to be provided during leave at the same cost to the employee. Non-group health plan benefits are not required to be available during leave.

 

This portion of the bill is effective 15 days after signature through the end of 2020.

 

The last major part of the Act requires private employers with fewer than 500 employees and public employers of any size to provide paid sick leave to employees if the employee is:

  • Subject a federal, state or local quarantine related to COVID-19
  • Advised by a medical professional to self-quarantine due to COVID-19 concerns
  • Experiencing symptoms of COVID-19 and seeks a medical diagnosis
  • Caring for an individual who meets one of the first two criteria
  • Caring for children whose schools, place of care, or childcare provider are closed or unavailable due to COVID-19
  • Experiencing any substantially similar condition specified by the Secretary of Health and Human Services

 

Employers affected are eligible for refundable payroll tax credits to cover the costs of the paid leave and healthcare costs. Employees are eligible regardless of how long they have been employed and the employer may not require the employee to use other types of paid leave before using this new emergency paid sick leave. However, there is an exemption for healthcare providers and emergency responders.

 

This portion of the bill is effective 15 days after signature through the end of 2020.

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