Submitted by Kieran Cleary, TAC Benefits Group, LLC

The COVID-19 virus came as a shock to everyone. With its fast spread and deadly symptoms, the government at the state and federal level was quick to enact a plan of action, requiring certain businesses to shut down indefinitely. This caused business owners and their employees to scramble. The virus has fundamentally changed both the economic and political landscapes in the U.S. for the foreseeable future. To stop the bleeding, two legislative packages have already been enacted by Congress, with a third “economic stimulus” package approved by the Senate. The economic stimulus bill is scheduled for a vote in the house first thing Friday morning. It is expected to pass and be signed by the President in fast order. You should consult with your tax attorney or economic advisors to determine for what benefits or loans of the economic stimulus your business and your employees will be eligible. This article will explain the emergency legislation and the affect it will have on group benefits and FMLA.

H.R. 6201, The Families First Coronavirus Response Act, was passed by Congress on March 18, 2020. The relief package contains several provisions that affect employers, including staffing companies. First and foremost, the FFCRA requires health insurance companies to waive cost-sharing charges for FDA-approved COVID-19 testing. Cost-sharing includes copayments, co-insurance and deductibles. So, if you feel symptoms, get tested. The package also requires cost sharing to be waived for telemedicine, doctor visits, urgent care visits, and visits to the ER, so long as these are related to COVID-19. If you are self-funded you should consider adding a telemedicine program to your plan. If fully insured, you should confirm that your carrier plan has telemedicine.

New Jersey has expanded on this law by ordering health insurers to make sure their telemedicine networks are adequate. Insurers should cover out-of-network telemedicine visits if in-network options aren’t available. Also, health insurers can’t impose pre-authorization requirements on medically necessary treatment that is delivered via telemedicine. Telemedicine is especially important in this uncertain time because you can use this service by phone or video and the health provider can make a diagnosis, when possible, and prescribe medicine and tests, allowing you to stay home as often as possible.

The Families First Coronavirus Response Act also includes two complementary but distinct emergency paid leave provisions, generally applicable to employers with fewer than 500 employees and financed through refundable tax credits. To determine if you are 500 employees or more you should use the ACA formula and look back 12 months. These provisions will become effective no later than April 1, 2020 and will expire at the end of the year. The first of the provisions, The Emergency Family and Medical Leave Expansion Act requires employers to provide public health emergency leave under the Family and Medical Leave Act of 1993 (FMLA). This applies when an employee is unable to work due to the need to care for a child under the age of 18, because of school or childcare provider closings. Here’s what the provision includes…

• First 10 days of leave may be unpaid, unless employee elects to substitute paid leave (including emergency paid sick leave), and remainder of 12-week leave must be paid
• Paid leave must be at least two-thirds of regular rate of pay, up to $200/day and $10,000 in the aggregate
• Entitlement extends to employees who have been employed for at least 30 days eligible for leave, in contrast to FMLA’s 12-month/1,250-hour rules
• Note that this new leave entitlement is not available on account of actual COVID-19 infection

The second of the two paid leave provisions, The Emergency Paid Sick Leave Act requires certain employers to provide up to two weeks of paid emergency “sick” and “caring for” leave. This applies when employee is unable to work due to the following COVID-19-related reasons…

• Employee is subject to –or is caring for someone subject to –Federal, State, or local quarantine or isolation order
• Employee has been advised by –or is caring for someone advised by –health care provider to self-quarantine
• Employee is experiencing symptoms and seeking medical diagnosis
• Employee is caring for son or daughter whose school or place of care has been closed, or childcare provider unavailable, due to COVID-19 precautions
• Employee is experiencing substantially similar condition specified by Health and Human Services in consultation with Treasury and Labor

The entitlement is based on 80 hours for full-time employees and two-week average for part-time and hourly employees, and special rules for employees with varying schedules based on 6-month look back or reasonable expectation at time of hire. This has a direct impact on the staffing industry due to short-term, contingent nature of temporary workers’ jobs. We believe that for temporary workers, hours should be based on the hours employees are scheduled to work over the course of their assignment. Only if the assignment does not have a defined end date or the hours are not specified, would the calculation of hours worked be based on an employee’s reasonable expectation at the time of hire. Conditions of the EPSLA provision are as follows…

• Paid “sick” leave capped at $511/day and $5,110 in the aggregate
• Paid “caring for” leave must be at least two-thirds of regular rate of pay, up to $200/day and $2,000 in the aggregate, complementing new FMLA entitlement
• Leave must be provided immediately, no waiting period
• Act restricts carryover of leave from one year to the next, and unused leave need not be paid out after termination of employment

The Department of Labor can provide an exception for employers with fewer than 50 employees based on the assumption that the provisions in H.R. 6201 could jeopardize ongoing business viability. This exception could potentially become problematic for the staffing industry due to the large numbers of temporary employees who work on short-term assignments versus the number of permanent staff that operate the business. The American Staffing Association is advocating for the use of the SBA revenue-based test ($30 million annual revenue) for defining small business. Additional guidance from the DOL on this matter is forthcoming.

Additionally, the American Staffing Association is seeking guidance on issues that as written are not clear, or that would become an ongoing issue for the staffing industry. For additional information on the impact of COVID-19 on your employee benefits program or FMLA, please visit our website at www.tacbenefitsgroup.com.

Remember to wash your hands, avoid large gatherings, disinfect, and to enjoy the extra time with family. To all our friends in the NJSA, please stay safe!