COVID-19 RELIEF BILL UPDATE

Less than 24 hours after the bill was passed and signed, we are starting to look at the details and what it means for businesses.  Here is what we know so far:

The bill addresses two different types of relief for employees:  Enhanced FMLA benefits and paid sick leave. 

ENHANCED FMLA
The enhanced FMLA benefits apply to private employers with fewer than 500 employees and some public employers. 

The waiting period for eligibility is 30 days for any FMLA leave request related to COVID-19.  There is no requirement for number of hours worked when using this enhanced FMLA. 

Qualifying reasons to use this FMLA expansion would be that an employee who is unable to work (or telework) to take leave due to the need to care for a child under the age of 18 whose school or day care facility has been closed due to public health emergency. If an employee is able to telework (the job requirements are such that they could be performed remotely) and the employee refuses to do so, they are no longer eligible for FMLA leave under this expansion. 

The first 10 days of FMLA under this expansion are unpaid.  Subsequent days must be paid at 2/3 the employee's regular rate of pay.  There is a cap of $200/day ($10,000 per employee aggregate).  The employee may substitute accrued but unused leave time for the initial 10-day (unpaid) period. 

It is important to note that this law does not add a new 12-week entitlement period.  If an employee has already exhausted their part or all of their annual FMLA leave, they do not get an additional 12 weeks.  The enhancement allows additional reasons to utilize FMLA leave only.

Employees still have a responsibility to provide as much notice as is practical if they need to utilize this enhanced FMLA leave. 

If an employer has fewer than 25 employees, at the end of an employee's FMLA leave, if the employee's position no longer exists because of economic changes due to the public health crisis, the employer must make a reasonable effort to restore the employee to the same or equivalent position.  If there is no position available, the employer must continue to contact the employee when a similar or equivalent position becomes available for up to one year from the date the need related to a public health emergency concluded or 12 weeks after the date the employee's leave started. 

There is an exemption possible for businesses under 25 employees who can prove that complying with this law would "jeopardize the viability of the business as a going concern", but it is still unclear what the requirements would be to qualify for this exemption.

PAID SICK LEAVE
The second type of relief provided by H.R. 6201 to employees is paid sick leave.  This paid sick leave is available to all employees, part-time or full-time, of employers with fewer than 500 employees. 

There is no eligibility period for this benefit.  All employees who are active at the time it goes into effect are eligible. 

Full-time employees would receive 80 hours of paid leave.  Part-time employees would receive the average number of hours worked over two weeks. 

The reasons an employee could utilize this paid sick leave would be:
(1) The employee is subject to a federal, state, or local quarantine or isolation order related to 
      COVID-19.
(2) The employee has been advised by a healthcare provider to self-quarantine due to concerns   
     related to COVID-19.
(3) The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis.
(4) The employee is caring for an individual who is needs to quarantine, isolate, or self-quarantine
     under government order or health care advisor advice.
(5) The employee is caring for their son or daughter if the school or place of care of the son or
     daughter has been closed, or the childcare provider of the son or daughter is unavailable, due to 
     COVID-19 precautions.
(6) The employee is experiencing any other substantially similar condition specified by the Secretary
     of Health and Human Services, in consultation with the Secretary of the Treasury and the
     Secretary of Labor.

There is a cap on sick leave.  For those who utilize the leave for their own condition, the leave is capped at $511/day (or $5110 in aggregate).  For those who utilize leave to take care of a family member or when an employee experiences the substantially similar condition (item 6 above), the leave is capped at $200/day (or $2000 in aggregate). 

The employer is allowed to require the employee to follow reasonable notice procedures in order to continue receiving the paid sick leave. 

Both of these provisions must go into effect no later than 15 days  after enactment (April 2, 2020) and will remain in place until the end of 2020. 

EMPLOYER TAX CREDIT
This bill also addresses relief for employers.  Employers will receive tax credits for wages required to be paid under the new paid sick leave and the paid FMLA. Employers will also receive tax credits for certain related health plan expenses.  The credit amount will equal 100% of the wages paid under the emergency paid sick leave and emergency FMLA expansion.  This credit will be applied quarterly against the employer's share of the Social Security taxes.  Any excess amount will be treated as overpayment and is refundable.  There is also additional credit available for employers related to health plan expenses in order to reimburse employers for the cost of continuing to provide health care coverage while employees are receiving wages under the new provisions. 

COVID-19 TESTING COSTS
H.R. 6201 also requires all group health plans and individual health insurance to cover FDA-approved COVID-19 diagnostic testing without any cost sharing or prior authorization.  This does NOT extend to COVID-19 treatment, only diagnostic testing.  This is effective immediately and will stay in effect until the public health emergency ends.  In addition, HDHPs previously could cover COVID-19 testing and and treatment on a pre-deductible basis.  This has been superseded by H.R. 6201 and is now required without cost sharing.