Admin Changes, FFCRA Basics, HIPPA and ADA, Disability Webinar Invitation

Posted by Lori Alala on March 16, 2020

As we continue to see developments on both governmental and industry reactions to COVID-19 (Coronavirus), our team at Broome Associates wants to keep you up-to-date on how this will impact you as employers and on the benefits front. This email is providing you an update through 4 pm ET on March 16, but will be doing a live webinar tomorrow to allow clients to ask questions and get the latest info.

WEBINAR INVITATION: We invite you to be a part of a webinar we are going to do for our clients tomorrow, March 17, at 2:00 pm ET / 1:00 pm CT concerning the changes under federal law that we are briefly discussing below as well as carrier updates on health and disability benefits. Please plan on attending, the link to sign into the webinar is: https://fuze.me/webinars/join/1929970/482e978167ae11eabdf30242ac110002

Health Benefits

Nearly every carrier and claims administrator has put in place special benefits to address the growing concern about COVID-19. At this stage, the following has been implemented:

• Coverage for the cost of COVID-19 testing at no cost to members
• Improved access and lower cost for the use of virtual medical treatment (telemedicine or online visits with a medical professional)

For our self-funded clients, we have received far better information now about the cost of the testing (which will be covered as claims costs for your group health plan). On average, the cost per test is running between $40-50 per test – a lot less than the thousands per test that was rumored at the beginning of last week. You will receive amendments to add this benefit to your group health plan in the next couple days.

Maintenance Medicine Supplies. This may also be the time to encourage your employees to have their maintenance medicines delivered by mail instead of going to the pharmacy, or to use some delivery service from your local pharmacy. While we have not heard about mandatory quarantines, it is better for individuals who are taking those medicines to have plenty on hand to avoid the very serious issues that could arise if they don’t take their medicines.

Federal Leave Law Changes

Congress and the President reached an agreement on legislation addressing various issues related to the COVID-19 outbreak, but the one that will most impact you as an employer is a federal paid leave mandate that will predominantly impact employers with less than 500 employees. The Emergency Families First Coronavirus Response Act (EFFCR) has passed the House and is expected to be voted on by the Senate today. There is no guarantee that there won’t be changes but we wanted to get information to you as soon as possible since there has been considerable discussion about this in the news over the last couple days.

For employers with less than 500 employees, the proposed law contains language creating an Emergency Family & Medical Leave Expansion. This law would provide employees with the right to take up to 12 weeks of job-protected leave under the Family and Medical Leave Act (FMLA). Eligible employees must have been on the employer’s payroll for 30 days, and may use emergency FMLA leave for the following reasons:

  • To adhere to a requirement or recommendation to quarantine due to exposure to or symptoms of coronavirus;
  • To care for an at-risk family member who is adhering to a requirement or recommendation to quarantine due to exposure to or symptoms of coronavirus; and
  • To care for a child of an employee if the child’s school or place of care has been closed, or the childcare provider is unavailable, due to a coronavirus.

The first two weeks of leave may be unpaid (an employee may choose to substitute accrued vacation leave, personal leave, or other medical or sick leave during this period, but an employer may not require an employee to do so). After the two weeks of unpaid leave, employers must continue paid FMLA leave at a rate of no less than two-thirds of the employee’s usual rate of pay (assuming leave is necessary for one of the above purposes). There is language that would allow the Secretary of Labor to exempt small employers with less than 50 employees from this paid leave part of the law if it would “jeopardize the viability of the business as a going concern.”

This expansion is temporary – under the legislation, the broader FMLA rule would only be on the books for 12 months – and would require employers to protect an individual’s job while out on leave. There is an exception to this requirement for employers with fewer than 25 employees if the employee’s position is eliminated due to a downturn in the economy.

Beyond the FMLA Expansion, there is an Emergency Paid Sick Leave provision that would remain in effect for the rest of 2020, requiring employers with fewer than 500 employees to provide employees with two weeks of paid sick leave either:

  • Paying the employee at 100% of the employee’s regular rate, to quarantine or seek a diagnosis or preventive care for coronavirus for the employee themselves; or
  • Paying the employee at two-thirds the employee’s regular rate if taken to care for a family member for the same reasons or to care for a child whose school has closed, or childcare provider is unavailable, due to the coronavirus.

Full-time employees are entitled to 80 hours of leave, and part-time employees are entitled to the typical number of hours that they work in a typical two-week period.

With all of these special mandates, the key question is HOW ARE WE SUPPOSED TO PAY FOR THIS? The proposed law does include refundable tax credit offsets for the employer share of Social Security (FICA) taxes for the cost of providing paid leave under these temporary mandates. But the exact mechanism is not yet clear.

There are questions outstanding too – we don’t know how these laws will be enforced against the employers (in terms of penalties) and also no clear guidance on how the different state and local paid leave mandates will be integrated or coordinated with this new law.

Other Federal Law Impacts

There has been no change to the HIPAA Privacy and Security Rules. The federal agency in charge of enforcing these rules issued guidance last week to remind employers and other covered entities that the privacy rules of HIPAA continue to apply in an emergency while identifying when the rules allow for the responsible use and disclosure of protected health information in the case of a serious contagion. Many have asked if HIPAA even applies in these situation. So if an employee notifies you that that they are self-quarantining because he or she has tested positive for the virus, the employer would not be subject to HIPAA’s requirements with regard to that information. But if an employer finds out that an employee has the virus from the employer’s health plan, that information would be subject to HIPAA and therefore must be carefully handled and not used to make any adverse employment decision.

As far as the Americans with Disabilities Act, the EEOC reminded employers last week that during a pandemic, covered employers can make inquiries relating to an employee’s potential exposure or request an employee submit to a medical examination; can exclude individuals from the workplace based on concerns that employees pose a “direct threat,” meaning a significant risk of substantial harm even with reasonable accommodation, because of their exposure to or infection with a virus; and must reasonably accommodate an individual with potential exposure or infection.

Disability Insurance Impact

We have received additional information from our disability carriers about their plans to continue business operations and how the COVID-19 outbreak will be treated from a disability insurance perspective. Some key points about disability insurance and how this outbreak will impact your employees:

  • Is an individual who is quarantined but not sick or diagnosed with the coronavirus considered disabled? Generally, we do not consider quarantined workers to be disabled unless they have a medical condition that results in restrictions and limitations that satisfy a policy’s definition of disability. So simply being out of work is not enough to be considered disabled.
  • What about an employee who is quarantined but able to work from home? Generally, disability carriers consider a quarantined individual to be in “active employment” if the employee is quarantined pursuant to a government order or if the employee’s quarantine is an approved leave in accordance with the leave provisions of the applicable policy. Therefore the individual would not be entitled to disability benefits.
  • How does Short-Term Disability Insurance coordinate with Paid Leave? You may not know this but when an employee is out on short-term disability, most STD insurance policies do not offset for paid leave. (such as what is proposed under the new federal law above). That means that an employee may be making more money than they are currently earning if they are out on disability and eligible for benefits under the expanded FMLA outlined above.

Here’s a list of our preferred carriers and website addresses for information during this critical time of uncertainty:

Unum: https://www.unum.com/covid-19

Guardian: https://www.guardianlife.com/covid-19/helping-brokers-employers-understand-covid-19-coronavirus

Principal: https://www.principal.com/landing-page/managing-uncertainty

On a related note, we also wanted to provide a brief summary of Coronavirus-related impacts to state statutory disability and paid family leave plans.

Thanks for the opportunity to work with you and to continue to provide you vital support on compliance issues.

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