Frequently Asked Questions
Here is a FAQ for COVID-19 related benefits issues. This resource will be updated as more questions and answers are available.
I hear there were three phases to Congressional response to COVID-19. What are these three bills?
Phase one is the Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020 (H.R 6074), which provided $8.3 billion to fund acquisition of medical supplies and develop treatments and vaccines.
Phase two is the Families First Coronavirus Response Act (H.R. 6201), which required no-cost coronavirus testing, in addition to providing for paid leave under certain circumstances, and expanding food aid & unemployment insurance benefits during the outbreak.
Phase three is the CARES Act (H.R. 748) signed into law on Friday, March 27th.
We are a small business with 35 employees, and not subject to the FMLA. Does the FFCRA apply to us, and do we have to post the DOL employee FFCRA poster?
Yes. All employers with fewer than 500 employees, including part-timers, are covered by the paid sick leave and expanded family and medical leave provisions of the FFCRA, and are required to post the FFCRA Rights notice by April 1, 2020.
How do we know if employees of our commonly owned companies count toward the 500 maximum headcount in order for FFCRA to apply to us?
The guidance states that typically, a corporation including its separate divisions, will be considered a single employer and all of its employees must each be counted towards the employee threshold for that single corporation.
If two entities are found to be joint employers under the Fair Labor Standards Act (FLSA), all of their common employees must be counted in determining whether Emergency Paid Sick Leave and Emergency child care FMLA leave must be provided.
In addition, the DOL’s Q&As adopt the integrated employer test under the FMLA to determine whether two or more entities are separate, or combined, for FFCRA’s Emergency child care FMLA purposes. Those factors under the FMLA include common management, interrelation between operations, centralized control of labor relations, and degree of common ownership/control. See 29 CFR 825.104(c)(2). If two entities constitute an integrated employer under the FMLA, then employees of all entities making up the integrated employer will be counted in determining employer coverage for purposes of FMLA requirements.
Who pays for the FFCRA Sick Leave and FMLA Expansion? Also, does this expansion only apply to employees who have to care for a child whose school or day care provider has been closed for a public health emergency?
Employers with fewer than 500 employees are required to pay their employees who qualify under HR 6201. They can claim a 100% tax credit for these payments. Eligible employees are those who have worked for the employer for 30 days and meet one of the criteria for leave below:
10 days of paid sick leave is available to employees who need leave for their own symptoms, or their own state or health care provider ordered quarantine. This leave is paid up to $511 per day, max of $5,110 for the full duration.
10 days of paid sick leave is also available to employees who need to care for a child or another person (not limited to family members) who is home because their school/daycare is closed, or because they are under self-directed quarantine. This leave is paid at 2/3 salary, to a max $200 per day, to a maximum of $2,000 for the 10 day/2 week period.
The remaining 10 weeks is for employees who need to care for children (limited to employees own children or another child they provide financial support to and act as a parent to) home from school because the school/daycare is closed for COVID-19 concerns. This remaining leave is paid at 2/3 salary to a maximum of $200 per day/$10,000 for the 10 weeks.
For the purposes of Emergency Paid Sick Leave, are “Shelter in place” orders and “Stay at home” orders the same as a “Federal, State Local quarantine or isolation order”?
It is our understanding that shelter in place and stay at home orders qualify under the law on the same terms of self isolation. Sick pay would be available for employees that cannot work due to stay at home orders imposed on their employers, who are not essential employers, requiring employees to stay home, and when these employees are not able to telecommute.
Conversely, if an employer is open for business and not required to reduce in person work staff to zero (for example if they are an ‘essential employer’ under the regulations), and an employee does not want to report to work because of the pandemic, but is not physically ill or caring for someone else, this employe is not entitled to paid sick leave, even if a stay at home order is in effect.
How do we calculate the rate of pay for employees that qualify for the 10 days of full salary to the $511 daily cap under FFCRA Paid Sick Leave?
The DOL’s Q&A confirms that employers must pay an employee for hours the employee would have been normally scheduled to work. The DOL confirmed that FFCRA sick time benefits are capped at 80 hours total over a 2 week period. The guidance also notes that an employee who is scheduled to work 50 hours a week may take 50 hours of paid sick leave in the first week and only 30 hours of paid sick leave in the second week because of the 80-hour cap. The DOL also stated that sick time paid out to the employee does not need to include a premium for overtime hours.
Employees who work part-time or irregular schedules will be entitled to payment based on the average number of hours the employee worked for the six months prior to taking the leave.
Can my employee take paid sick and FFCRA FMLA to care for his nephew?
The 12 weeks total for the childcare leave (due to school closures, etc.)—10 days of Emergency Paid Leave and 10 weeks for the remaining FMLA portion—apply to an employee taking the leave to care for a “son or daughter.” The DOL issued further guidance defining son or daughter for the purposes of the FFCRA as: “your own child, which includes your biological, adopted, or foster child, your stepchild, a legal ward, or a child for whom you are standing in loco parentis—someone with day-to-day responsibilities to care for or financially support a child.”
If the employee takes care of the day-to-day responsibilities for and provides financial support for his/her nephew, then they would be entitled to this leave. This person would get 10 days of the Emergency Paid Leave at two-thirds of the employee’s regular rate (capped at $200/day and $2,000 in the aggregate) and the remaining 10 weeks of the FMLA at two-thirds of the employee’s regular rate (capped at $200/day and $10,000 in the aggregate).
Please note, however, if you are already subject to the FMLA and this employee, for example, took 3 weeks of FMLA leave in January, then he/she would be entitled to only 9 weeks total for this leave (10 days of Emergency Paid Leave, and 7 weeks of FMLA). These new provisions do not add to the 12 weeks of FMLA leave.
What does the CARES Act say about employee student loan or tuition assistance?
IRC Section 127 excludes from an employee’s income amounts (up to $5,250 per year) paid by an employer for education assistance. The CARES Act expands the definition of “education assistance” to include any payments made by an employer prior to January 1, 2021, with respect to qualifying student loans. The payments can be made directly to the employee or to the relevant lender. Note that any amount paid by the employee under this new provision would not be deductible by the employee under IRC Section 221.
What does the CARES Act change about OTC medications, feminine products, and FSA/HSA/HRA funds?
In 2010, the Affordable Care Act changed the previous allowance for the use of FSA and HSA funds for over-the-counter drugs. The ACA required a prescription in order for individuals to use these pre-tax funds for such purchases. The CARES Act now changes the law on these purchases back to pre-ACA times, allowing individuals enrolled in these pre-tax accounts to pay for OTC drugs without a prescription. It also appears this is a permanent change that will not expire at the end of 2020.
An additional change to the list of eligible items for FSAs, HSAs and HRAs is the addition of ‘Menstrual products’ as eligible items. These products are defined as tampons, pads, liners, cups, sponges, or similar products used by individuals with respect to menstruation. This move puts these health products in line with other already eligible expenses.
We are a small business with 35 employees, so we are subject to the FFCRA. However offering paid leave will jeopardize our business. What can we do?
If you have fewer than 50 employees and offering the paid leave under FFCRA will jeopardize the viability of the business, you may exempt yourself from compliance with the paid leave. The DOL lists 3 criteria, of which an employer must meet at least one, to claim an exception:
The provision of paid sick leave or expanded family and medical leave 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;
The absence of the employee or employees requesting paid sick leave or expanded family and medical leave 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
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 or employees requesting paid sick leave or expanded family and medical leave, and these labor or services are needed for the small business to operate at a minimal capacity.
We have 700 employees and are not subject to the FFCRA, but we are subject to the New York Paid Sick Leave for Quarantine. My Employee only has a doctor's note and not a State order. Must I grant 14 days of paid sick leave?
The most recent guidance at the time of this Q&A directs employers to accept a doctors note from an employee who has tested positive for COVID-19, or is caring for someone who has tested positive, as long as the employee confirms they are following the steps to obtain a valid order of quarantine from the proper authority. The directions for employees with positive tests who need an order of quarantine are linked here.
Can my employee take paid Expanded FMLA to care for her child whose school is closed, after this same employee took 12 weeks of FMLA in October?
Employees are only eligible for the expanded paid FMLA under FFCRA if they have not already exhausted all 12 weeks of FMLA entitlement in the current 12 month period. An employee who took all 12 weeks of their annual FMLA allotment 6 months prior would not be eligible for paid FMLA under FFCRA (but they would be eligible for the 2 weeks of paid sick leave if they have an eligible reason).
My child’s daycare is closed. I have an existing Dependent Care Account election I’d like to change since I cannot use it. Is this permissible?
The IRS rules generally prohibit any mid-year changes to tax favored accounts such as dependent care FSAs or general purpose FSAs, absent a qualifying event. The closure of a daycare center would generally qualify under the ‘change in cost’ event within Section 125 (1.125-4(f)(2)(i)), allowing an employee to make a change to their current election amount.
I tried to purchase over the counter medications with my HSA card at the pharmacy but the purchase would not go through. Why?
While the CARES Act removed the prohibition in the existing law that disallowed over the counter medication to be purchased with pre tax funds such as an FSA or HSA, vendors will need to update their systems and processes to facilitate direct purchases. Given the high volume of consumer purchases of essential items right now, it may take some time for these updates to be implemented. In the meantime, manual reimbursements may be submitted for newly eligible purchases.
We are paying 3 months of COBRA premiums for all employees that were laid off as a result of business shortages this month. When our employer COBRA payments cease, will the individuals be able to enroll in the public Exchange?
Ordinary rules do not include a qualifying event for situations where an employer’s premium subsidy for COBRA ceases. However, the HealthCare.gov COVID-19 site contains information stating that employer COBRA subsidy termination ‘may’ create a special enrollment period allowing impacted individuals to enroll in an Exchange plan at that time. It's a best practice to direct employees to the HealthCare.gov site and not confirm circumstances surrounding what the public Exchanges may allow in terms of special enrollments in the future.
We offer an HSA compatible high Deductible Health Plan (HDHP). I have seen something regarding telehealth being covered at 100% and am wondering how this affects HSA eligibility?
The first guidance on this was found in IRSA Notice 2020-15, which required telehealth for COVID-19 related treatment to be covered at 100%, with no cost share, and stating that HDHPs doing so will not impact an employees’ HSA eligibility. Newer rules expand on this, and now permit all telehealth (unrelated to COVID-19 testing or treatment) to be covered at 100% without causing a loss of HSA eligibility. This expansion for telehealth applies to plan years beginning on or before December 31, 2021. Any plan renewing January 1, 2022 and beyond cannot offer telehealth without cost share to HSA eligible employees.
Note this coverage for telehealth with no cost share is an option for employer plans and carriers; it is not mandatory.
My employee has asked for 12 weeks of paid leave under the FFCRA because she has just learned her 9 year old’s summer camp has been canceled due to the pandemic. Is this employee eligible for leave?
If you have fewer than 500 employees and are subject to the FFCRA, a summer camp closure is an eligible reason for up to 12 weeks of leave, paid at ⅔ salary (subject to the $10,000 aggregate cap) under the emergency FMLA for child care provision. The DOL released FAB 2020-4 which states “The Department's existing guidance provides that a closed summer camp or program may be considered to be the place of care for an employee's child if the child was enrolled in the camp or program before the summer camp or other summer program announced closure...”. If an employee had registered their child for a camp program and that program is no longer able to accommodate the child, this is generally an eligible leave under FFCRA. Note the first 2 weeks are unpaid under child care leave, however they would generally be paid under the paid sick leave to care for a family member provision of the FFCRA, so in effect, the employee is paid at ⅔ salary for all 12 weeks.
We had an employee take 80 hours of paid leave under the FFCRA after a positive COVID-19 test result in April. The employee now has a second positive test and has requested additional leave. Is this required?
The FFCRA provides for up to 80 hours of paid leave for the various COVID-19 reasons, including isolation after a positive test result. Once an employee has exhausted all 80 hours, (or the hours they would have worked in a 2 week period) there is not additional time provided by this Act. The employee would be able to use accrued paid sick leave, PTO, or unpaid leave.
Additionally, for employers subject to the New York State paid leave for COVID-19 orders of Quarantine, there is up to 14 days paid leave for individuals with a state order. Once these 14 days have been exhausted, there is not an additional allotment of paid time off under the law. Note that pay for 14 days is measured according to the employee’s usual schedule, so they are paid for days/hours they would have worked over 14 calendar days. However, June 25th guidance creates an exception to this single use rule for ‘health care workers’ and states “The health care employee shall be deemed to be subject to a mandatory order of isolation from the Department of Health and shall be entitled to sick leave as required by New York’s COVID-19 sick leave law, whether or not the health care employee already has received sick leave as required by the law for the first period of quarantine or isolation.”
We are bringing employees back to work, and want to have a proper testing plan in place. Can we choose which employees to test, or exclude high-risk employees from returning?
All employees must be treated similarly with regards to testing and return to work under EEOC guidance. The Age Discrimination in Employment Act (ADEA) prohibits a covered employer from “involuntarily excluding an individual from the workplace based on being 65 or older, even if the employer acted for benevolent reasons such as protecting the employee due to higher risk of severe illness from COVID-19.” The Americans with Disabilities Act (ADA) similarly would not permit employers to require pregnant employees to remain home, unless the accommodation was at the request of the employee.
My employee has asked for 80 hours of paid leave to care for his mother who is ill with COVID-19. Currently, this employee is on furlough. Am I required to pay this employee for 10 days of leave under FFCRA?
The Southern District in New York v. U.S. Department of Labor, et al., ruled that the DOL’s limiting instructions surrounding when an employee may qualify for leave under the FFCRA is not valid. Specifically, the court invalidated the work availability requirement for leave. This means that employees who may be on furlough, can still qualify for paid leave under the FFCRA’s various paid leave provisions. The DOL will likely appeal the decision, however its advisable that employers take note of the currently enforceable court ruling in New York only, and permit leaves under FFCRA for furloughed employees at this time.