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COVID-19 Emergency Appropriations for Employee Benefits

March 16, 2020

The House passed the Families First Coronavirus Response Act (HR 6201) by a vote of 363-40. The Senate, who has cancelled their weeklong recess that was scheduled to start on Monday, will now consider the measure.

This is the second coronavirus package that Congress has taken up. The first package was passed last week and provided nearly $8 billion for the immediate response of the pandemic at Health and Human Services, US Agency for International Development, the State Department and the Small Business Administration.

In a letter addressed to her House colleagues, Speaker Nancy Pelosi mentions the House will begin work on a third piece of legislation “to protect the health, economic security and well-being of the American people.”

The measure passed last night contains the following provisions:

NUTRITION FUNDING AND WAIVERS

  • $250 million for Health and Human Services Department programs that aid elderly Americans, including:
    • $160 million for home-delivered nutrition services
    • $80 million for congregate nutrition services for food in large settings (for example, adult daycare centers and meal sites)
    • $10 million for nutrition services for American Indians
  • The WIC program would receive $500 million in emergency funding.
  • The Commodity Assistance Program for the emergency food assistance program would receive $400 million, of which nearly $100 million could be used for costs related to food distribution.
  • Nutrition grants for Northern Mariana Islands, Puerto Rico and American Samoa would be made in the amount of $100 million for nutrition assistance provided in response to the virus.
  • States would have the flexibility to alter their Supplemental Nutrition Assistance Programs (SNAP) to provide additional aid to households with children who are eligible for free or reduced-price school meals if a school is closed for at least five consecutive days because of the virus.
  • Federal work requirements for SNAP eligibility would be waived under the new measure. The waiver would begin the first full month after the bill is enacted and terminated at the end of the first full month after the emergency coronavirus declaration is lifted.
  • If a state makes its own emergency or disaster coronavirus declaration, it could request emergency allotments of food aid to support increased participation in SNAP and assist in the temporary food needs. It wouldn’t change the maximum monthly allotment for any household size. States would be required to show relevant data to demonstrate the need for aid.
  • USDA would be allowed to wave statutory requirements for several food programs to make sure meals are provided safely to prevent the spread of the virus. Additionally, it would allow waivers of eligibility requirements for the National School Lunch Program, School Breakfast Program, Child and Adult Care Food Program and the Summer Food Service Program.
  • States would be able to request waivers for the requirement that WIC recipients certify their eligibility in person and for deferring blood work requirements.

MEDICAID FUNDING

  • States would be eligible for a 6.2 percentage point increase in their federal medical assistance percentages (FMAP). They would be required to provide coronavirus testing coverage without cost-sharing and not impose additional eligibility standards or premiums. States would be allowed to cover tests for the uninsured through their Medicaid program and receive a 100% FMAP to cover that cost.

TESTING

  • Insurers would be required to cover testing for coronavirus and related services (such as a doctor’s visit for the testing) without cost-sharing or prior authorization required. The cost-sharing provision would apply to Medicaid, Medicare, TRICARE, veterans’ health programs, Indian Health Services and coverage for federal civilian employees.
  • National Disaster Medical System would receive $1 billion for providers with reimbursement costs associated with testing uninsured individuals.

EMERGENCY LEAVE

  • The measure would establish an emergency paid leave program to respond to the coronavirus. Private-sector employers with fewer than 500 employees and government entities would have to provide as many as 12 weeks of job-protected leave under the Family and Medical Leave Act for employees who are required to:
    • Comply with a requirement/recommendation to quarantine because of exposure to or symptoms of coronavirus.
    • Provide care to family who must comply with such a requirement/recommendation
    • Provide child care to an individual under the age of 18 whose school or daycare has closed due to the virus
  • A worker could choose to use accrued vacation, personal leave or other paid leave if they have it available; otherwise, the first 14 days of leave could be unpaid. Following the 14-day time period, workers would receive a benefit from their employers that will be at least two-thirds of their normal pay rate.
  • FMLA would also be modified to allow individuals to use unpaid leave if they are diagnosed with the virus, caring for a family member or a child whose school or daycare has closed through Dec. 31, 2020.
  • Labor Department would have the authority to issue regulations to exclude certain health care providers and emergency responders from paid leave benefits and exempt small businesses with fewer than 50 employees from the paid leave requirements.

EMERGENCY SICK LEAVE

  • Private sector employees with fewer than 500 workers and government entities would have to provide employees with paid sick time off to be able to self-quarantine, obtain a diagnosis/care for coronavirus, provide care for a family member or care for a child whose daycare/school has closed due to the virus.
  • Full-time employees would receive 80 hours of sick leave under this new program. Part-time workers would be granted time off that is equivalent to their scheduled or normal work hours in a two-week period. Paid sick time could be carried from year to year.
  • Workers would be required to be paid their normal wage or the federal/state/local minimum wage, whichever wage is greater. If out for caring for a family member, that worker would be paid at two-thirds of their regular earnings.
  • Employers with similar paid leave policies already in place would be required to provide workers with the emergency paid sick time. The measure restricts employers from requiring a worker to use any other available paid leave before using their sick time.
  • Employers would also be prohibited from requiring a worker to find a replacement to cover their hours off, discriminating or firing an employee for requesting paid sick leave and from filing a complaint against the employer.

EMPLOYER TAX CREDITS

  • Payroll tax credits would be provided to employers to cover wages paid while employees are taking time off under the measure’s sick leave/family leave programs.
  • The payroll tax is a 6.2% levy on wages imposed on both employers and employees. The employees’ share would not be affected by the bill.
  • An employee’s sick leave credit would be wages of as much as $511 per day while he/she is receiving sick leave to care for themselves or $200 if the sick leave is to care for a family member or child out of school/daycare. There is a 10-day limit over the aggregate number of days taken into account for all preceding calendar quarters.
  • Each employee’s family leave credit would be wages of as much as $200 per day while the employee is receiving paid leave or an aggregate of $10,000.
  • The credit would be refundable if it exceeds the amount the employer owed in payroll tax.
  • Employers couldn’t receive the credit if they are also receiving a credit for paid family leave and medical leave established in the 2017 tax overhaul package. They would have to include the credit in their gross income.
  • The credit isn’t applicable to state and local governments
  • The credit would only be in effect for wages through the end of 2020.
  • The Department of Treasury would be required to issue regulations to ensure employers don’t manipulate the credit, to minimize compliance and record-keeping burdens, to waive penalties for underpayments in anticipation of the credit and to establish a process to recapture credits with there is an adjustment.
  • The bill would authorize the transfer of amounts equal to the credit, in addition to lost revenue from wages that are exempt from payroll tax, to the Social Security and disability insurance trust funds from the general fund.

SELF EMPLOYED TAX CREDIT

  • The bill provides a similar refundable credit against self-employment tax. It would cover 100% of self-employed individuals’ sick leave equivalent or 67% if they were taking care of a sick family member or child if their school was closed.
  • Their sick-leave equivalent amount would be the lesser of their average daily self-employment income or $511 per day if caring for themselves or $200 a day if caring for a family member. It would be available for 10 days over the number of days taken into account in preceding years.
  • Self-employed individuals could receive a family leave credit for as many as 50 days for the lesser of $200 or their average daily self-employment income.
  • Self-employed individuals would have to submit documentation, as required by the Treasury Department.
  • The measure would establish alternate requirements for self-employed individuals who also receive sick-leave pay from an employer. It would also establish rules for the credit to be provided in the US territories.

UNEMPLOYMENT INSURANCE

  • Emergency Transfers
    • States would receive as much as $1 billion in emergency transfers in FY20 to process and pay unemployment benefits.
    • Each state would receive a proportional amount based on the share of federal unemployment taxes paid by its employers.
    • Within 60 days of the bill’s enactment, states would receive half of their allocation if they certify that they meet certain requirements, such as allowing workers to apply for benefits by phone or online.
    • If states’ unemployment claims increased by at least 10% over the same quarter in the previous year, states would receive the remaining funds.
    • Modifications to certain unemployment policies, including rules related to job searches and initial payment waiting periods would be granted to states on an emergency temporary basis.
  • Extended Benefits
    • Eligible laid-off workers can receive regular unemployment benefits for as long as 26 weeks in most states.
    • Once those benefits are exhausted, an additional 13 weeks of benefits (or up to 20 in some states) could be available through the Extended Benefits program if the individual resides in a state with rising unemployment.
    • The bill would wave a matching state requirement and provide full federal funding for the EB program for the rest of 2020. To qualify, states would need to experience a 10% spike in unemployment claims over the past year and qualify for a full emergency funding transfer under the measure.
  • Interest-Free Loans: The bill would waive interest payments that states owe for the rest of 2020 on federal advances to their unemployment accounts.

ADDITIONAL PROVISIONS

  • The measure would cover personal respiratory protective devices as a “countermeasure” under the Public Readiness and Emergency Preparedness Act.
  • Defense Health Program at the Department of Defense would receive $82 million for virus-related items and services.
  • Veterans Affairs Department would receive $60 million.

Internal Revenue Service would receive $15 million to carry out the bill’s provisions.