I. Federal Efforts to Combat COVID-19
A. The Families First Coronavirus Response Act
On March 18, 2020, Congress finalized and delivered to President Trump the Families First Coronavirus Response Act (the “FFCRA”). The same day, the President signed the bill into law. The FFCRA is designed to counteract or mitigate a variety of critical problems resulting from the COVID-19 pandemic.
The FFCRA is divided into eight divisions and: (1) implements a stimulus plan to patch up the wounded economy; (2) ensures that students maintain access to lunches during periods of school closure; (3) expands emergency family and medical leave; (4) ensures the solvency of emergency unemployment programs; (5) introduces an emergency paid sick leave program; (6) provides for cost-free COVID-19 testing; and (7) provides a tax credit to employers whose employees take paid sick leave.
To ensure that public benefit programs are adequately funded and readily accessible in the wake of COVID-19, the FFCRA provides these programs, including those under the Special Supplemental Nutrition Program for Women, Infants, and Children (“WIC”) and the Supplemental Nutrition Assistance Program (“SNAP”), and the Department of Veterans Affairs, with increased funding. The FFCRA also establishes nutritional programs for students temporarily displaced during school closures and relaxes the limitations that may be placed on SNAP benefits during public health emergencies, like COVID-19.
FMLA
The FFCRA significantly and temporarily expands the Family and Medical Leave Act (the “FMLA”). Historically, the FMLA only applied to businesses employing 50 or more employees. However, the FFCRA amends the FMLA to cover employers with fewer than 500 employees. Under the FFCRA, the FMLA applies to a much greater number of employers, who may now be required to provide paid and job-protected leave to employees taking such leave for reasons related to COVID-19. However, the FFCRA carves out an exception for small businesses with fewer than 50 employees that may also be irreparably damaged by providing such leave.
The expanded FMLA under the FFCRA provides that employees may take up to 12 weeks of job-protected leave if they are unable to work if they become ill or must care for their child because of school or daycare coverage. The first 10 days of the leave may be unpaid, thereafter the employer must generally pay the employee at two-thirds the employee’s regular rate, but no more than $200 per day and $10,000 per employee. Unless extraordinary circumstances exist, employers with 25 or more employees generally must restore the employee to their pre-leave position upon their return.
Paid Sick Leave
In addition to expanding the FMLA, the FFCRA now provides for paid sick leave to employees unable to work because: (1) they are subject to a quarantine or isolation order related to COVID-19; (2) the employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19; (3) the employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis; (4) the employee is caring for an individual who is quarantined, isolated, or self-quarantined; (5) the employee is caring for a child of such employee if the school or place of care of the child has been closed, or the child care provider of such child is unavailable, due to COVID-19 precautions; or (6) the employee is experiencing any other substantially similar condition. Importantly, however, employers of health care providers and emergency responders may be exempt from the paid sick-leave provisions of the FFCRA.
The amount of paid sick leave is limited to 80 hours for full time employees and to the average number of hours worked during a two-week period for part-time employees. Further, employers may not require employees to use any earned time off or other benefit before the employee can take the sick leave provided by the FFCRA.”
Unemployment Programs
On another note, the FFCRA establishes the Emergency Unemployment Insurance Stabilization and Access Act of 2020 (the “EUISAA”). Under the EUISAA, Congress has set aside $1 billion dollars for unemployment programs. Specifically, the EUISAA allocates $500 million of this amount to states to fund their administrative costs provided that they: (1) require employers to notify the employee of the availability of unemployment compensation at the time of separation; (2) ensure that assistance is available for the application for unemployment compensation by no fewer than two ways (in-person, telephonically, or via the internet); and (3) satisfactorily notify applicants about the receipt and processing status of their application.
Further, the EUISAA allocates $500 million in grants to states experiencing an increase in unemployment claims of no less than 10%. The federal government has pledged to pay 100% of the extended unemployment benefits (the 26-week period following the first 26 weeks of unemployment).
Tax Credits
To offset employer expenses created by the above discussed provisions, the FFCRA provides employers with several tax credits to offset such expenses and further provides that, if the expenses incurred by the employers exceed their tax liabilities, the employers will be reimbursed for such expenses. Under the FFCRA, the employers are entitled to receive a tax credit equal to 100% of the paid sick leave that they provided in accordance with the act.
Finally, the FFCRA requires health insurers to provide coverage for COVID-19 diagnostic testing free from deductibles, copayments, and coinsurance costs for the duration of the national emergency. The FFCRA also prohibits prior authorization or similar requirements for COVID-19 diagnostic testing.
B. U.S. Treasury Department and Internal Revenue Service Guidance on Filing and Paying Federal Income Tax Liabilities
On March 18, 2020, the U.S. Treasury Department and Internal Revenue Service “issued guidance allowing all individual and other non-corporate tax filers to defer up to $1 million of federal income tax (including self-employment tax) payments due on April 15, 2020, until July 15, 2020, without penalties or interest.”[1] Corporate taxpayers are provided with a similar deferment of up to $10 million of federal income tax payments that would be due on April 15, 2020, until July 15, 2020, without penalties or interest. However, taxpayers who are entitled to receive an income tax refund should file their return so that their refund is not delayed.
The Treasury and IRS have vowed to “issue additional guidance as needed and continue working with Congress, on a bipartisan basis, on legislation to provide further relief to the American people.”[2]
C. The Coronavirus Aid, Relief, and Economic Security Act
On March 19, 2020, Senate Majority Leader Mitch McConnel introduced the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”).[3] One of the proposals of this $1 trillion economic stimulus package is for each individual to receive a direct payment from the federal government. Although this legislation is nascent and subject to change, the following outlines the basic principles as set forth by Senate Republicans.
The CARES Act provides that these payments should be made “as rapidly as possible.”[4] Individuals may qualify for a payment of up to $1,200 and married couples may qualify for up to $2,400. In addition to these amounts, families may be eligible to receive $500 for each qualifying child.
However, there are limitations on who may qualify for payments at these maximum amounts. Only those individuals whose adjusted gross income does not exceed $75,000 (or $150,000 jointly) may be eligible to receive the maximum amount.[5] In cases exceeding these amounts, the payment will be reduced by 5% of the amount exceeding $75,000 or $150,000 as appropriate.[6]
For example, a family consisting of two parents and two children whose adjusted gross income is less than $150,000 would receive $3,000.
The details of the CARES Act are still being negotiated by the Senate, the House of Representatives, and the President.
II. Louisiana’s Efforts to Combat COVID-19
A. Governor John Bel Edwards Asks the Federal Government to Expand Benefits Programs and Relax Requirements for Spending Under Existing Programs to Allow for Immediate Relief
On the same day that Congress delivered the FFCRA to President Trump, Governor John Bel Edwards sent a letter to President Trump and Vice President Pence.[7] He praised the federal government’s efforts but expressed his concerns that “Louisiana clearly is a hot spot for COVID-19 in the United States” and that the “per capita growth rate of cases is one of the highest in the country.”[8] Governor Edwards requested an expansion of the hot food waiver from the United States Department of Agriculture Food and Nutrition Service to allow for the purchase of hot foods with SNAP benefits.
Further, Governor Edwards identified a number of programs established for recovery efforts for natural disasters affecting Louisiana over the past 15 years and suggested that the requirements under these programs be relaxed to “quickly put millions of dollars of assistance at [Louisiana’s] disposal in this fight with no impact of the federal budget.”[9] Matching the “time is of the essence” theme, Governor Edwards closed his letter by stating that he and his team are “working around the clock to stop the spread of this virus . . . but [they] still have far to go and [he is] asking for [President Trump’s] continued support as [they] seek to make every possible tool available for this fight.”[10]
B. Louisiana Insurance Commissioner Jim Donelon Issues Rule Mandating Waiver of Copayments for COVID-19 Testing
On March 18, 2020, Louisiana Insurance Commissioner Jim Donelon authorized Emergency Rule 36 (“Rule 36”) to address the threat posed by COVID-19.[11] Rule 36 is “applicable to insureds, policyholders, members, subscribers, enrollees and certificate holders who, as of 12:01 a.m. on March 17, 2020 have a policy, insurance contract, or certificate of coverage.”[12] Importantly, under Rule 36 “[a]ll health insurers shall waive all cost-sharing including copayments, coinsurance, and deductibles for screening and testing for COVID-19 as specified by the CDC.”[13] Further, Rule 36 eliminates any prior authorization requirements for such testing.
Lugenbuhl is closely monitoring this fluid situation as it develops and will provide updates as they become available. Until then, individuals or businesses in need of guidance should contact Lugenbuhl for support.
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These materials are for informational purposes only and should not be construed as legal advice. Individuals should contact their attorneys to obtain advice regarding any particular issue or problem. Use of and access to this information or any of the links contained herein does not create an attorney-client relationship between Lugenbuhl and the reader. The opinions expressed above are the opinions of the author and may not reflect the opinions of the firm or any individual attorney.
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[1] Press Release, U.S. Dept. of the Treasury., Treasury and IRS Issue Guidance on Deferring Tax Payments Due to COVID-19 Outbreak (March 18, 2020) (Press Release).
[2] Id.
[3] https://www.congress.gov/bill/116th-congress/senate-bill/3548/text
[4] Id. at Sec. 6428. 2020(g)(3).
[5] Id. at Sec. 6428. 2020(d).
[6] Id.
[7] Letter from John Bel Edwards, Governor, State of Louisiana, to President Trump and Vice President Pence (March 18, 2020) (Letter).
[8] Id.
[9] Id.
[10] Id.
[11] Press Release, La. Dept. of Ins., Donelon Authorizes Emergency Rule 36 to Address Statewide Public Health Threat (March 18, 2020) (Press Release).
[12] See Text of Rule 36, https://www.ldi.la.gov/docs/default-source/documents/legaldocs/rules/rule36-cur-patientprotections.
[13] Id.
