Posted April 7th, 2020

FFCRA & CARES Act – Overview of Benefits Changes

President Trump signed into law two major pieces of legislation aimed to provide relief in various forms to business, individuals, and government agencies – the Families First Coronavirus Response Act (“FFCRA”) and the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”).  Both laws make major changes to existing benefit and leave laws while also creating new benefit rights for certain employees.  Additional guidance from the Department of Labor and Internal Revenue Service is being released on a near-daily basis to aid employers and individuals with the implementation of these laws.  For more detailed guidance and specific questions, please contact our compliance team at teshelman@contributionhealth.com.


FFCRA – New Paid Sick Leave and FMLA Changes

The FFCRA established, effective April 1, 2020, two new forms of partially paid leave for employers with fewer than 500 employees.  The first leave option – Emergency Paid Sick Leave (“EPSL”), is available to all employees, full-time, part-time, and seasonal, up to a maximum of 80 hours (for full-time employees) or an amount equal to the average number of hours an employee works in a 2 week period (for part-time employees).  EPSL may be taken when an employee is unable to work for any of the following reasons:


  1. Being subject to a federal, state, or local quarantine/isolation order
  2. Being advised by a health care provider to self-quarantine for COVID-19 reasons
  3. Experiencing COVID-19 symptoms and seeking a medical diagnosis
  4. Caring for an individual subject to an order/advisory described in 1 or 2 above
  5. Caring for a child whose school or place of care is closed/unavailable for COVID-19 reasons
  6. Experiencing any substantially similar condition as indicated by HHS


Employees who take EPSL based on items 1, 2, or 3 above are entitled to their regular rate of pay, up to $511 per day and $5,110 in the aggregate.  Employees who take EPSL based on items 4, 5, or 6 above are entitled to 2/3 their regular rate of pay up to $200 per day and $2,000 in the aggregate.  Employees are eligible for this leave immediately – there is no waiting period or hours of service requirement before taking EPSL.  Employers should request and receive documentation that verifies the basis for taking leave – for items 1-4 this may be in the form of a doctor’s note or similar communication – as this documentation will be needed in the event the employer claims the payroll tax credits for providing leave and the IRS later audits the employer.

The second leave option under the FFCRA – Emergency Family Medical Leave (“EFML” or sometimes “EFMLA”) – is a limited expansion of the FMLA to provide 12 weeks of partially paid leave for employees who are unable to work or telework because they must care for a child whose school or place of care is closed/unavailable for COVID-19 related reasons.  The first 10 days of EFML are unpaid, though an employee with available EPSL could use that leave during this period (or other PTO could be used), and the remaining 10 weeks are paid at 2/3 the employee’s regular rate of pay up to $200 per day and $10,000 in the aggregate.

To be eligible for EFML, the employee must have been on the employer’s payroll for at least 30 days prior to taking the leave.  This is distinguishable from normal FMLA leave, which requires that an employee have completed one year of employment and at least 1,250 hours prior to taking leave.  Additionally, small employers with fewer than 50 employees must offer EFML, but they are not required to offer other types of FMLA leave.  During EFML, as with FMLA leave, an employee’s job must be protected (certain exceptions apply) and an employee must be allowed to continue health benefits under the same terms and conditions as if they were actively employed.

Exemptions do apply in certain cases for EPSL and EFML.  Employers with 500 or more employees are not required to offer FFCRA leave benefits and are also not eligible for tax credits for providing FFCRA leave.  Employers who employ health care providers may and emergency responders may, but are not required to, offer EPSL and EFML to these employees.  Additionally, employers with fewer than 50 employees may be eligible for the small business exemption if an authorized officer of the business determines that:

  1. The provision of EPSL or EFML would result in the small business’s expenses and financial obligations exceeding available business revenues and cause the small business to cease operating at a minimal capacity;
  2. The absence of the employee requesting EPSL or EFML would entail a substantial risk to the financial health or operational capabilities of the small business because of their specialized skills, knowledge of the business, or responsibilities; or
  3. There are not sufficient workers who are able, willing, and qualified, and who will be available at the time and place needed, to perform the labor or services provided by the employee requesting EPSL or EFML, and these labor or services are needed for the small business to operate at a minimal capacity.

Employers subject to the FFCRA are required to notify employees of their rights under the law.  A model poster is available from the DOL at: https://www.dol.gov/sites/dolgov/files/WHD/posters/FFCRA_Poster_WH1422_Federal.pdf. This notice may be mailed or emailed to employees who are teleworking due to a worksite closure pursuant to a government order/recommendation.


CARES Act – Several Benefit Changes (not all COVID-19 related)

 The CARES Act includes several provisions directly affecting how employer-sponsored group health plans pay for certain benefits related to COVID-19, but also includes several changes to existing laws that have much further-reaching impacts that should be reviewed by employers and plan sponsors.

COVID-19 Coverage

Group health plans, including self-funded medical plans and plans with grandfathered plan status, must provide coverage for COVID-19 testing to participants without cost-sharing.  This includes FDA-approved tests as well as additional forms of testing developed during the COVID-19 testing that may not yet be FDA-approved.  This requirement extends to coverage for items and services furnished during provider visits that relate to the administration of such a test.

The CARES Act further details that plans are required to pay out-of-network providers the “cash price” of the service as listed by the provider.  This means that normal out-of-network reimbursement rules may not apply to costs related to COVID-19 testing (in-network negotiated rates continue to apply).  Additionally, once a COVID-19 vaccine is available, the plan must provide coverage for this vaccine with no cost-sharing to plan participants.

Over-the-Counter (“OTC”) Medication & Reimbursements

Health Savings Accounts (“HSAs”), Healthcare Flexible Spending Accounts (“Health FSAs”), and Health Reimbursement Arrangements (“HRAs”) may reimburse participants for OTC medication purchased beginning January 1, 2020.  This change to existing law does not mandate that these accounts include OTC medication as an eligible reimbursement; however, in many cases plan sponsors will choose to include these costs as an eligible reimbursement to maximize the benefit for participants under said accounts/arrangements.   Additionally, menstrual care product expenses are newly classified as expensed incurred for medical care, meaning that these products are also now eligible for reimbursement from HSAs, Health FSAs, and HRAs.

Telehealth Services & High Deductible Health Plans (“HDHPs”)

For plan years beginning on or before December 31, 2021, health plans will not fail to be considered HDHPs for purposes of participant HSA eligibility where participants are provided with telehealth and other remote health care services with no deductible.  So long as the participant otherwise remains an eligible individual for HSA participation, the fact that an employer offers a free telehealth benefit, or does not require that the HDHP deductible be satisfied before accessing the telehealth benefit, will not jeopardize that participant’s HSA eligibility.  This change is not limited to telehealth services related to COVID-19 or required to due office policy changes during the COVID-19 pandemic.

Student Loan Repayment Benefits

The CARES Act also modifies the Internal Revenue Code by including “eligible student loan repayments” an item to be excluded from an employee’s gross income.  Employers may contribute up to $5,250 toward the cost of an employee’s qualified higher education loan (paid either directly to the lender or the employee) without that amount counting toward the employee’s gross income.


This publication reflects Contribution Health’s interpretation of existing law and regulation at the time of publication and may not reflect subsequent developments.  This information is provided for informational purposes and is not intended to constitute legal or tax advice.


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