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Mandatory coverage of COVID-19 testing and small employer paid leave signed into law

Benefits Administration and Outsourcing Solutions|Health and Benefits|Wellbeing
COVID 19 Coronavirus

By Ann Marie Breheny and Benjamin Lupin | March 24, 2020

Group health plans must cover COVID-19 testing without cost sharing; small employers must provide paid leave for certain COVID-19 situations.

On March 18, the Senate approved the Families First Coronavirus Response Act (H.R.6201), and President Trump signed it into law. The legislation requires group health plans to provide first-dollar coverage for COVID-19 (coronavirus) testing and related medical office, urgent care and emergency room costs, effective immediately and lasting through the emergency period. In addition, beginning on April 2, 2020, certain employers must provide emergency paid sick leave and paid Public Health Emergency Leave under the Family and Medical Leave Act (FMLA) for specified situations related to COVID-19. The paid leave provisions would sunset on December 31, 2020.

General discussion and observations

Mandatory coverage of COVID-19 testing

Group health plans (including self-insured plans) and health insurance issuers offering individual and group coverage (including fully insured plans) are required to cover COVID-19 testing without imposing cost sharing on the patient. Prior authorization and medical management practices may not be applied. The mandate does not include treatment for COVID-19, only testing.1 The Departments of Health and Human Services (HHS), Labor (DOL) and Treasury may implement the requirement through sub-regulatory guidance, program instructions or other methods.

Medicare, Medicaid, Children’s Health Insurance Program and other federal health programs must also provide first-dollar coverage for testing.

Emergency paid sick leave

The legislation requires employers with fewer than 500 employees and all governmental employers, regardless of size, to provide emergency paid sick leave. Full-time employees would receive 80 hours of emergency paid sick leave, and part-time employees would receive the average number of hours worked over a two-week period. The leave will be available regardless of length of employment with the employer.

Emergency paid sick leave will be available to employees who are unable to work or telework due to:

  • Being subject to a federal, state or local isolation order related to COVID-19
  • Being advised to self-quarantine
  • Experiencing symptoms of COVID-19
  • Caring for an individual who is subject to an isolation order or who has been advised to self-quarantine
  • Caring for a son or daughter because the child’s school or place of care is closed, or the childcare provider is unavailable due to COVID-19 precautions
  • Experiencing any other substantially similar conditions specified by the Secretary of HHS, Treasury and Labor

The leave generally will be paid at the employee’s regular rate of pay, to a maximum of $511 per day (and a maximum of $5,110 for the two-week emergency paid sick leave period). For employees taking leave to care for a family member under the above stated conditions or experiencing conditions specified by HHS, Treasury and the DOL, the leave will be paid at two-thirds the employee’s regular rate of pay, up to $200 per day (to a maximum of $2,000). Payroll tax credits will offset the cost of providing emergency paid sick leave.

The emergency paid leave can be used by the employee before any existing leave available to the employee.

Employers may not discharge, discipline or otherwise discriminate against employees who take emergency leave under the legislation. The legislation does not diminish the rights or benefits an employee is entitled to under other federal, state or local laws; collective bargaining agreements; or existing employer policies. Nor does it require that the employer pay or reimburse an employee for unused emergency paid leave upon the employee’s separation from service.

Employers must post a notice informing employees of their rights to emergency paid leave. The DOL is instructed to issue a model notice within seven days of enactment.

The DOL may exempt businesses with fewer than 50 employees. The DOL — and employers — may exclude employees who are health care providers and emergency responders.

Paid Public Health Emergency Leave

A new, temporary leave provision under the FMLA applies to employers with 500 or fewer employees as well as governmental employers, regardless of size. Public Health Emergency Leave is paid leave (unlike general FMLA leave) available for employees who have been employed by the employer for at least 30 calendar days.

The first 10 days would be unpaid; however, employees may elect to substitute paid leave during the first 10 days, but employers may not require such substitution. After the initial 10 days, the employee would be paid two-thirds the regular rate of pay, up to $200 per day (up to a $10,000 maximum). Payroll tax credits for the employer would help offset the costs of providing paid leave.

The DOL may exempt certain health care providers, emergency responders and businesses with fewer than 50 employees. Employers may also exclude employees who are health care providers or first responders.

Going forward

Plan sponsors of fully insured and self-insured group health plans should discuss coverage for COVID-19 testing with their third-party administrators and insurance carriers to ensure compliance with the testing coverage mandate.

Employers subject to the paid leave requirements should review the final paid leave provisions, watch for guidance, and prepare for implementation and administration.

Employers not covered by the paid leave provisions — in general, those with more than 500 employees — should discuss paid leave alternatives with qualified legal counsel.

Employers should also watch for additional legislative action. Congress began working on additional COVID-19 relief legislation before the Families First Coronavirus Response Act was approved by the Senate. New legislation could include provisions that affect employer-sponsored benefit and compensation programs.


1 The requirement applies to costs associated with the diagnostic product; administration of the diagnostic product; and items and services furnished during office (including telehealth), urgent care center and emergency room visits that result in an order for, or administration of, COVID-19 testing.

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Insider March 2020 PDF .5 MB

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