Requirements for group health plan coverage

The Act requires group health plans and insurers to cover specific services related to testing for the virus that causes COVID-19. The new requirements apply to all group health plans, including self-insured plans and grandfathered plans under the Affordable Care Act. These requirements took effect March 18, 2020, and apply during the currently declared national emergency.

Group health plans and insurers must provide coverage for, and not charge any cost sharing for, the following services:

• Diagnostic tests to detect the virus that are approved or authorized by the FDA, including the administration of such tests
• Items and services furnished to individuals during provider office visits (whether in-person or via telehealth), urgent care visits and emergency room visits that result in an order for or the administration of the test described above, but only to the extent such items or services relate to the furnishing or administration of the test or the evaluation of whether the person needs the test

The law also prohibits group health plans and insurers from imposing prior authorization or other medical management requirements.

Similar requirements apply to Medicare (including Medicare Advantage plans), the Federal Employees Health Benefits Program, TRICARE and other federal health programs.

Emergency Family and Medical Leave Expansion Act

The law amends the Family and Medical Leave Act (FMLA) effective April 2, 2020 through December 31, 2020. Employers with fewer than 500 employees and public employers must permit employees to take up to 12 weeks of leave if they are unable to work (or telework) due to a need for leave related to a public health emergency to care for a son or daughter under age 18 if the elementary or secondary school or place of care has been closed or the child care provider of the son or daughter is unavailable due to a public health emergency. The first 10 days of the leave may be unpaid, but the remainder must be paid, up to a maximum of $200 per day and $10,000 in the aggregate.

Emergency Paid Sick Leave Act

Also effective April 2, 2020 through December 31, 2020, private employers that employ fewer than 500 employees and public agencies that employ one or more individuals must provide each employee paid sick time if the employee is unable to work (or telework) due to a need for leave because of a quarantine or isolation order related to COVID-19, self-quarantine, illness, caring for a quarantined or ill individual or caring for children because schools or caregivers are closed or a childcare provider is unavailable due to COVID-19.

The amount of paid sick leave is calculated based on 100 percent of the employee’s regular rate of pay or the applicable minimum wage, whichever is greater. Employers are only required to pay employees two-thirds of their regular rate of pay when their absence is to care for a covered family member. Paid sick time shall not exceed $511 per day and $5,110 in the aggregate for leave related to quarantines or illness and $200 per day or $2,000 in the aggregate for uses related to caring for children or others impacted. 

There are a myriad of state and local paid leave laws. The federal paid leave right would not diminish any rights under these laws, collective bargaining agreements or existing employer policies. Paid leave would not be payable as cash if it is not used.

Family leave, paid leave and multiemployer plans

With respect to multiemployer plans, responsibility for providing family leave and/or paid sick leave remains with the employer. Employers may satisfy the obligation through the fund, if they make contributions to the fund for that purpose.

Tax credits for employers

The Act provides refundable tax credits to offset the cost of providing paid sick and family leave. In addition, the tax credit may be increased for costs associated with qualified health plan expenses related to the leave. Tax credits are not deductible and apply to wages paid between a date set by the Secretary of the Treasury between April 2, 2020 and December 31, 2020.

Implementation

Segal can assist plan sponsors and employers to implement the terms of the Act for their benefit plans and human resources departments. Plan sponsors and employers should consult with legal counsel as to the application of the new law to their employment practices and benefit plans.

_{On all issues involving the interpretation or application of laws and regulations, plan sponsors should rely on their legal counsel for legal advice.}