What the Coronavirus Means for Individuals and Businesses

The COVID-19 “Corona Virus” pandemic is affecting many of our current and future client’s health insurance. Specifically individual health insurance plans and group benefits offered by employers. The information below and there is a lot if will be updated and changed as we receive it from our trusted carriers and industry partners.

Individuals That Have Lost Health Insurance:

What to do if you are an employee losing health insurance coverage? Contact us so we can compare rates and options below.

  • Individual health insurance that could qualify for premium assistance
  • Keep COBRA if it’s an option and affordable.
  • Potentially qualify for Medicaid or CHIP coverage on dependents.

Businesses Offering Group Benefits

What employers need to know about the Families First Coronavirus Response Act (H.R. 6201).

On the afternoon of March 18, 2020, the Senate passed H.R. 6201, the Families First Coronavirus Response Act. Division C of the Bill details the Emergency Family and Medical Leave Expansion Act, and Division E provides additional protections under the Emergency Paid Sick Leave Act. Both divisions apply to employers with fewer than 500 employees.

At a high level, these laws work together so that, under the Emergency Paid Sick Leave Act, qualifying employees will receive 80 hours of paid leave for immediate use, then they will receive paid leave at two-thirds of the employee’s wages for the duration of a COVID-19 related Family and Medical Leave Act leave.

Key provisions of both laws are described below.

 

NOTE: The information on this page was last updated on March 26, 2020. Please contact us for the latest updates.

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    Emergency Family and Medical Leave Expansion Act

    (Effective 15 days after enactment)

    This statute provides for additional benefits under the FMLA so that eligible employees will receive job protection and a paid component for certain COVID-19-related absences.

    Which employers are covered?

    Employers with fewer than 500 employees are subject to the expansion. Part-time employees are included in this count to assess coverage.

    The Secretary of Labor has authority “for good cause” to exempt (1) certain healthcare providers and emergency responders; and (2) small employers with fewer than 50 employees where the added expense would jeopardize the business. Under certain circumstances, the requirement to restore employees to their employment will not apply to businesses with fewer than 25 employees.

    Additionally, an employer of employees who are healthcare providers or emergency responders may exclude these employees.

    As a practical matter, larger employers that break up their workforce across smaller employing entities should review the respective employee populations for each entity to determine whether the expansion will apply to that population. In making this decision, consider what company is listed as the employer on an employee’s pay statement or review each Employer Identification Number separately.

    Which employees are eligible?

    Employees who have been employed for at least 30 calendar days will qualify for leave. Notably, the other FMLA employee eligibility requirements (e.g., hours worked) do not apply here.

    Employers appear to have the discretion to exclude healthcare providers and emergency responders, though this language of the statute is in tension with the delegation of rulemaking authority to the Secretary of Labor to determine such exemptions.

    What events will trigger coverage?

    Employees who are unable to telework may use this leave if they must care for a child following the closure of a school or daycare, or other unavailability of childcare due to the coronavirus.

    How does paid leave apply?

    The first ten (10) days of FMLA leave may be unpaid (but see the Emergency Paid Sick Leave Act provisions, below).  Employees may elect to use their accrued vacation, personal or sick leave to cover this window, but employers may not require it. After this initial period, the employer will be required to pay at least two-thirds of an employee’s regular wages, according to their normally scheduled hours.

    Payment is capped at $200 per day and $10,000 total for the duration of the leave.

    The statute provides a formula for calculating payments for employees with varying or irregular schedules.

    The expansion allows for up to twelve (12) weeks of coverage for all eligible employees in addition to the initial 10-day supplement provided by the Act.

    Emergency Paid Sick Leave Act

    (Effective 15 days after enactment)

    This statute provides for immediate use of up to 80 hours of paid leave for eligible employees, in addition to any other leave policies afforded by the employer.

    Which employers are covered?

    Employers with fewer than 500 employees are subject to the statute.  Part-time employees are included in this count to assess coverage.

    The Secretary of Labor has authority to exempt (1) certain healthcare providers and emergency responders; (2) small employers with fewer than 50 employees where the added expense would jeopardize the business.  Under certain circumstances, the requirement to restore employees to their employment will not apply to businesses with fewer than 25 employees.

    Which employees are eligible?

    All employees, full and part-time, are covered. Unlike the FMLA expansion, there is no tenure requirement.

    However, an employer of employees who are healthcare providers or emergency responders may exclude these employees. Employers appear to have the discretion to exclude health care providers and emergency responders, though this language of the statute is in tension with the delegation of rulemaking authority to the Secretary of Labor to determine such exemptions.

    When can employees take leave?

    Immediately. There is no accrual or waiting period.

    What events will trigger coverage?

    Employees who are unable to telework may use this leave for COVID-19 related medical leave, including self-isolation due to a positive COVID-19 diagnosis; obtaining a medical diagnosis or care if the employee is experiencing coronavirus symptoms; complying with a recommendation or order of a public health official or healthcare provider; caring for a family member who is self-isolating because of a positive diagnosis or experiencing coronavirus symptoms; or is experiencing any other “substantially similar condition” specified by the Secretary of Health and Human Services in consultation with the Secretary of Treasury and the Secretary of Labor.

    As with the FMLA component above, coverage will also be triggered where an employee must care for a child following the closure of a school or daycare, or other unavailability of childcare due to the coronavirus.

    How does paid leave apply?

    Full-time employees are entitled to 80 hours of paid leave. For part-time employees, employers should use the employee’s average weekly hours over a two-week period. State and local minimum wage rates are automatically adopted for calculating payments if they are higher than the employee’s effective hourly rate.

    Payment is capped at $511 per day or $5111 in the aggregate if the employee is home due to any qualifying reason listed above other than school closure or care for an ill family member under specific circumstances. Payment is capped at $200 per day or $2000 in the aggregate if the employee is home caring for a family member with the virus or due to a child’s school closure.

    How does the statute interact with state and local law?

    This leave is to be given in addition to any required paid leave provided by state or local law.

    Does this paid leave ever expire?

    Yes. Leave will automatically expire on December 31, 2020 and cannot be carried over into the following calendar year.

    What happens if an employer violates the Act?

    Failure to pay sick leave will be treated as a minimum wage violation under the Fair Labor Standards Act (FLSA). Remedies for a private cause of action include unpaid wages, liquidated damages (double damages), attorneys’ fees and costs. Employers should be conscious of the heightened risk for a collective action for failure to comply, as well as the potential for personal liability for owners, corporate officers, and other supervisors provided by the FLSA.

    How do employers alert their employees of the Act?

    Within seven days from enactment, the Secretary of Labor will provide a model notice to be posted in areas that are readily accessible to employees (e.g., kitchens and breakrooms). We anticipate direct notice might also be required in the form of an email or letter.

    Refundable Payroll Tax Credits for Paid Leave

    (Effective 15 days after enactment)

    The statute also provides for refundable payroll tax credits through 2020 for employers that provide paid leave in accordance with either the Emergency Family and Medical Leave Expansion Act or the Emergency Paid Sick Leave Act.

    How is the tax credit determined?

    Section 7001 of the act provides a tax credit for the cost of paid leave provided under the Emergency Paid Sick Leave Act. Section 7003 of the act provides a similar tax credit for the cost of paid leave provided under the Emergency Family and Medical Leave Expansion Act.

    Both credits are applied against section 3111(a) or 3221(a) of the Internal Revenue Code, which imposes the employer portion of Social Security and Medicare (FICA) taxes.  Accordingly, even employers that do not pay income tax may benefit from the credit.  The credits are refundable to the employer.

    Section 7001 permits a tax credit for up to 10 days of paid leave per employee under the Emergency Paid Sick Leave Act in the amount of up to (a) $511 per day for amounts paid to employees who must self-isolate, obtain a diagnosis, or comply with medical advice regarding a COVID-19 diagnosis, or (b) up to $200 per day for employees on paid leave due to caring for a family member or for a child due to school closures or unavailability of care.  In addition, employers may obtain a credit for “qualified health plan expenses” that are allocable to providing qualified paid sick leave determined above.

    Section 7003 provides a similar tax credit for paid leave under the Emergency Family and Medical Leave Expansion Act, but that credit is limited to $200 per day and an aggregate of $10,000.  A credit is also available for the cost of providing qualified health plan expenses allocable to providing the qualified family leave determined above.

    Similar refundable tax credits are available for self-employed workers.

    When does the tax credit apply?

    The tax credit applies only to paid wages beginning on the effective date of the law (15 days after its enactment), and will expire on December 31, 2020. The Internal Revenue Service (IRS) is expressly empowered to issue additional guidance implementing these changes, and the bill includes additional funding reserved to the IRS for this purpose.

    Helpful Links

     

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    Health Insurance COVID-19 Carrier Specific Resources:

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