In reaction to the COVID-19 (coronavirus) pandemic, the Families First Coronavirus Response Act was signed into law on 18 March 2020. The Act decided to dedicate hundreds of billions of dollars to paid medical and family leaves, unemployment insurance, free COVID-19 screening, and other initiatives to support People affected by the crisis.

The final bill will come into practice for affected employees no less than 15 days after passage and expire on 31 December 2020.

Businesses have started to raise questions, including whether federal aid may be available and if there is tax relief. Main provisions for H.R. 6201 Addresses these questions.

This should be remembered that these requirements are typically limited to private companies with less than 500 workers.

A summary of the highlights of the Act is given below.

Family and Medical Leave Act expansion

Businesses may be affected by staffing problems relating to self-isolation, forced quarantine, or true coronavirus-related disease. The terms under the Federal Family and Medical Leave Act (FMLA) have been briefly expanded and these modified requirements will refer only to FMLA absences due to a new eligible occurrence involving a public health emergency leave. Under the Emergency Family and Medical Leave Expansion Act: workers who have worked with a covered company for at least 30 calendar days will be eligible for a qualified leave.

  • Small companies with less than 50 workers may be excluded if the leave endangers the sustainability of their company. Employers with fewer than 25 employees may be exempt from certain provisions relating to the protection of employment.
  • Qualifying need is defined as’ an employee is unable to work (or telework) due to a need for leave to care for a son or daughter under the age of 18 of that employee if the school (i.e. primary or secondary school only) or the place of care has been closed or the childcare provider of that son or daughter is unavailable due to a public health emergency.
  • Registered workers who qualify for leave on these grounds should be paid by their employer at a rate not less than two-thirds of their regular rate of pay for the amount of hours that the employee would normally be expected to work, up to a limit of $200 a day or a sum of $10,000 for up to 12 weeks in the benefit year.
  • Employees who take leave under the Emergency FML Expansion Act must be allowed to choose to take advantage of any available paid time off including holidays, personal time, medical leave and/or sick leave during the first 10 days of their FMLA.
  • Employees entitled to a multi-employer bargaining agreement are treated separately in the law.
  • Exemptions apply to healthcare employers and emergency responders.

Are there payroll tax credits for businesses?

In this clause, for each calendar year, there is also a refundable tax credit equivalent to 100 per cent for salaries paid by the employer under the current Emergency Paid Sick Leave Act. The tax credit is permitted against the Employer portion of the Social Security tax imposed  (6.2 per cent) and the Medicare rate (1.45 per cent).

  • Depending on the cause the total is limited to a maximum of $511 or $200 per day.
  • When, in any calendar quarter, the credit exceeds the employer’s overall liability for the Social Security and Medicare portion, the excess is refundable to the employer.
  • Specific rules that prohibit a double tax credit apply.

Is COVID-19 Test Cost Covered by Families First Coronavirus Response Act?

H.R. 6201 includes some guidance related to COVID-19 diagnostics for health insurance coverage.

Diagnostic testing and provider visits including office visits, emergency care visits and emergency room visits must be provided without any co-pays, coinsurance or deductible.

Additionally, no prior authorizations would be needed for testing Such requirements will extend to most health insurance programs, including private health programs, fully insured and self-funded community health plans, Medicare, and Medicaid Several states have already ordered that such services be provided without cost-sharing, and many insurers have already agreed to do the same.