The U.S. House of Representatives voted 363-40 in favor of H.R. 6201, the "Families First Coronavirus Response Act," early March 13 after a chaotic day of negotiations between House Speaker Nancy Pelosi and the Trump Administration. The package would require employers with fewer than 500 workers to provide corona-affected individuals with paid sick and family leave, and create tax credits for such employers to partially offset the new benefit obligations. Employers with fewer than 50 employees are eligible to apply for hardship exemptions. The package also expands food and nutrition services, allow for emergency state unemployment insurance grants, and increase Medicaid funding to states, among other things.
The legislation is likely to become law in coming days. Most observers expect Congress will need to enact subsequent economic stimulus-type measures in the coming days and weeks.
NATSO members are encouraged to contact legal counsel to learn more about how this law will affect their businesses.
Speaker Pelosi and Treasury Secretary Mnuchin have been engaged in robust negotiations over the past few days, with the last remaining issues centering around the business tax credit for providing paid sick and emergency family leave for workers impacted by the coronavirus. The legislation requires employers with fewer than 500 employees to provide two weeks of emergency paid sick leave for employees, as well as 12 weeks of paid emergency family and medical leave throughout the coronavirus crisis, which employers would be partially reimbursed for through tax credits. The paid sick leave provision will expire at the end of the year. Businesses with fewer than 50 employees can be exempted from the paid emergency family and medical leave requirement.
Other priority items the Trump Administration has requested, such as a payroll tax cut, currently have little support on Capitol Hill but threatened to derail the negotiations in the final hours. Democrats have said it will be debated as part of future coronavirus crisis-related legislation, along with other priorities sought by Congressional Republicans and the White House including targeted tax relief for the affected industries.
Other highlights of the House-passed bill include:
- Food and Nutrition -- $500M additional support for the WIC program; $500M for the Commodity Assistance Program; $100M for eligible school children when schools are closed for at least 5 days; $250M made available for home and other nutrition services for the aging and disabled; and waiving statutory requirements for several food programs to allow for emergency provisions and added safety measures, including waiving federal work and work training requirements for SNAP during crisis.
- Funding for Free Testing -- $82M for COVID-19 related diagnostics and related items and services for TRICARE and $642M for IHS, $60M for the VA, and $1B to pay claims for providers for reimbursements of such health services.
- Free Testing Requirements -- Group health plans and health insurance issuers offering group or individual health insurance coverage, along with Medicare Advantage plans, TRICARE, and the VA may not impose cost-sharing or prior authorization requirements for diagnostic laboratory tests for detection of SARS-COV-2 or diagnosis of COVID-19 or related items or services. Coverage and waiving of cost-sharing is also required for these items and services under Medicare, Medicaid, CHIP, IHS, and for the civil service.
- Relatedly, on March 11, the IRS announced that high-deductible health plans can cover COVID-10 testing and treatment without a deductible or with a deductible below the required minimum for HDHPs without losing their HDHP status under the Code or threatening the tax-favored treatment of participants' health savings accounts (HSAs).
- Increase in Medicaid Funding -- Temporary increase in Medicaid Federal Medical Assistance Percentage (FMAP) of 6.2% if states meet certain requirements for coverage of COVID-19, an increase in Medicaid allotments for the territories for FY2020 and FY2021, and a state option to provide coverage for the detection of the virus for uninsured individuals with 100% FMAP for these purposes.
- Emergency Family and Medical Leave -- Creates an emergency family and medical leave program in response to the coronavirus. Private sector employers with fewer than 500 workers and government entities would ahve to provide as many as 12 weeks of job-protected leave to employees at least two-thirds pay due to a recommendation or order by a public official or health care provider, to care for a family members with coronavirus, or to care for a child whose school or place of care is closed more than 5 days due to a public emergency. The first 14 days could be unpaid, although a worker could choose to use other accrued leave. The Labor Department is authorized to issue regulations to exclude certain health care providers and exempt small businesses with fewer than 50 employees.
- Emergency Paid Sick Leave -- Private sector employers with fewer than 500 workers and government entities would have to provide paid sick leave of 80 hours for full-time employees and average hours for a two-week period for part-time employees due to coronavirus diagnosis, symptoms, or preventative care, or due to a recommendation or order by a public official or health care provider, to care for a family member with coronavirus, or to care for a child whose school or place of care is closed due to a public emergency. Workers would be paid the greater of their normal wage or local minimum wage or two-thirds pay for providing care to a family member. The provision expires at the end of the year.
- Tax credits for paid sick and family medical leave -- Payroll credit required for paid sick ($511 per day limit while the employee is caring for themselves and $200 per day limit for a family member or if a child's school is closed) and family leave ($200 per day limit or an aggregate of $10k) for wages through the end of 2020.
- Unemployment Insurance -- Provide as much as $1billion for emergency transfers to states in fiscal 2020 to process and pay unemployment benefits. Individuals in states with rising unemployment can qualify for an additional 13 weeks (20 in some states) for unemployment benefits.
- Mask Liability -- The measure would make personal respiratory protective devices a covered countermeasure under the Public Readiness and Emergency Preparedness Act, which allows HHS to provide liability protections for certain emergency response products.
- Waive Pay-Go -- The bill waives statutory "PAYGO" requirements that otherwise stipulate that new expenditures or tax breaks must not add to the federal debt.
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