The rapid spread of novel coronavirus, and its evolving economic impacts has prompted an unusually quick bipartisan response from Congress and the White House. The dizzying pace of developments has left many wondering what’s been done at the federal level to respond to this crisis.
Below you will find summaries of what has passed so far, what Congress is proposing, and how it could affect you, whether you’re a business owner or an employee that has been impacted.
We will continue to update this blog with additional resources and links to help guide you to supporting information.
A Three Phase Response
The federal response to date can be looked at as a three-phase response. The first phase, an emergency response funding bill appropriated almost $8 billion for emergency response efforts—improving our ability to prevent the spread of the virus. The Coronavirus Preparedness and Response Act was signed into law on March 6 after quick passage through House and Senate.
The second phase was the Families First Coronavirus Response Act, which among other things, requires employers to provide paid sick leave to workers affected by coronavirus and makes available a tax credit to reimburse employers for that sick leave. The bill was signed into law on March 18 and will take effect April 2.
Finally, the Coronavirus Aid, Recovery and Economic Security (CARES) Act represents phase 3, which would provide direct cash payments and loan guarantees for impacted businesses, more time to file and pay taxes, and more resources for testing and development of vaccines. The CARES Act is expected to pass by March 27 but may be amended before passage.
Phase 1 – Coronavirus Preparedness and Response Funding (PASSED)
Summary information below from NPR: “Trump To Sign $8 Billion Coronavirus Response Package Friday“
The plan includes almost $7.8 billion in new funding [to] combat the spread of the virus at the local, state, national and international levels, according to details from the panel. Medicare The agreement also includes a provision to allow Medicare beneficiaries to access telehealth programs that will let them remotely see providers to assess symptoms potentially tied to the coronavirus. “To protect public health, the bill will allow Medicare providers to extend telemedicine services to seniors regardless of where they live, at an estimated cost of $500 million,” House Speaker Nancy Pelosi said in a written statement. Vaccine The bill also allocates more [than] $300 million to ensure that when a vaccine is developed — which some estimate could be a year or more away — that Americans will be able to access it regardless of their ability to pay, according to a congressional aide involved in the negotiators [sic]. Overall, the plan allocates nearly $6.5 billion to the Department of Health and Human Services, which includes $2.2 billion for the Centers For Disease Control and Prevention to address state and local preparedness. The HHS figure also includes $3.1 billion to pay for new medical supplies such as masks at the Strategic National Stockpile and research into vaccines and therapeutics.
Phase 2 – Families First Coronavirus Response Act (PASSED)
Summary information below from U.S. Chamber of Commerce: “Summary of Latest Congressional Action on Coronavirus Response“
Unemployment Compensation The bill gives state governments flexibility with respect to waiting periods and in interpreting the “able, available and actively looking” test for Unemployment Compensation (UC) eligibility. That said, it is important to emphasize that UC is not sick leave. Examples:
- John owns a restaurant. Business has slowed down dramatically because of the virus. He sends three employees home on furlough. They would be eligible for UC and under the bill would not have to wait one week before collecting benefits. Because the intent is for them to return to John’s restaurant when business picks up, a state can determine that they are actively looking for work. If they are later asked to return to work, but refuse, they will then be considered no longer able, available, and actively looking.
- A worker is forced to stay home under orders of a public health professional or because John’s restaurant is in an area that cannot be reached because of the virus. The worker in the first instance, and all workers in the second, could be eligible for UC because the intention is that they will return to working at the restaurant at some point in the future. (note: the worker on quarantine would also be qualified for paid sick leave under the bill).
- John shuts down his restaurant because of a lack of business caused by the virus. Employees laid off as a result are eligible for UC.
Provides an additional $1 billion for state unemployment programs. Authorizes extended unemployment benefits (beyond the usual 26 weeks), fully funded by the federal government, for states that experience a spike in unemployment. Paid Sick Leave Requires private sector employers with fewer than 500 employees and government employers to provide employees with two-weeks of paid sick leave (80 hours for full-time employees and typical number of hours over two-weeks for part-time employees). Eligibility: The paid sick leave is available to any employee without regard to duration of employment if they are unable to work or telework because they are:
- Subject to a government quarantine or isolation order related to COVID-19,
- Have been advised by health provider to self-quarantine due to COVID-19,
- Experiencing symptoms of COVID-19 and seeking medical diagnosis,
- Caring for an individual subject to quarantine order or self -quarantine,
- Caring for children if schools are closed or their caregiver is unavailable because of a public health emergency, or
- Experiencing substantially similar conditions as specified by the Secretary of Health and Human Services
Employers of employees who are healthcare providers or emergency responders may elect to exclude such employees from the paid sick leave. Rate of Pay: Employees are compensated at the higher of their regular rate, the federal minimum wage, or the local minimum wage, but not to exceed $511 per day and $5,110 in the aggregate. However, if the employee is absent to care for a sick family member, a child unable to attend school, or because they meet the criteria for similar conditions they are compensated at 2/3 of the rate they would otherwise receive, but not to exceed $200 per day and $2,000 in the aggregate . (This conforms the pay to the amount of the available tax credit.) Small Business and Other Exemptions: The Secretary of Labor is authorized to issue regulations to exempt health care providers and emergency responders from the definition of employer. In addition, the Secretary may exempt small businesses with fewer than 50 employees from the requirement to offer leave to care for a child when a school is closed when the imposition of paid sick leave would jeopardize the viability of the business as an ongoing concern. Relationship to Existing Programs: This paid sick leave is in addition to whatever sick leave is already offered by the employer (including subject to state or local requirements). Effective Dates: The provision takes effect not later than 15 days after enactment of the bill and sunsets on December 31, 2020. Funding: Each quarter, private sector employers subject to the requirement are entitled to a fully refundable tax credit equal to 100% of the qualified sick leave wages paid by the employer. Qualified sick leave wages are capped at $511 per day ($200 per day if the leave is for caring for a family member) and 10 days. The tax credit is applied against employer Social Security taxes, but employers are reimbursed if their costs for qualified sick leave exceed the taxes they would owe. The Treasury Secretary is provided with regulatory authority intended to help with cash flow issues, for example by waiving penalties on failing to deposit payroll taxes in anticipation of the credit. Additional Credit for Health Plan Expenses: The amount of the tax credit is further increased by the amount of the expenses of the employer’s health care plan allocable to the qualified sick leave. This allows the employer to seek reimbursement for the cost of continuing to provide health insurance while the employee is on sick leave. Tax on Employers: Paid sick leave is not considered wages for Social Security tax purposes and for half of the Hospital Insurance Tax, for the other half of the Hospital Insurance Tax, the applicable tax credit is increased to cover the cost of the payroll tax. Self-Employed: There is a similar tax credit against self-employment taxes for individuals who are self-employed but would otherwise qualify for paid sick leave if they were an employee of an employer.Examples:
- John owns a manufacturing firm with fewer than 500 employees. One of his full-time employees has a family member who is diagnosed with coronavirus. John must provide up to 80 hours of paid sick leave at 2/3 of her normal rate of pay, but not to exceed $200 a day and will receive a refundable tax credit on his next quarterly tax filing to offset the cost up to $200 per day.
- At the same manufacturing firm, 5 full-time employees need to self-quarantine. John must provide up to 80 hours of paid sick leave for those employees at their normal rate of pay and will receive a refundable tax credit on his next quarterly filing to offset the cost up to $511 per day.
- John owns a manufacturing company with more than 500 employees. The paid sick leave provisions under the bill do not apply.
Paid Family and Medical Leave (FMLA) With certain possible exceptions (see below), requires private sector employers with fewer than 500 employees and government employers to provide employees with up to 12 weeks of paid family and medical leave (FMLA). Eligibility: The paid family and medical leave is available to any employee who has been employed for at least 30 days if they are out in order to care for children if schools are closed or their daycare is unavailable because of a public health emergency and they are unable to work or telework. Rate of Pay: After 10 days, during which time the employee can take unpaid or paid leave (if available), employees are compensated at 2/3 of their regular rate. Paid leave under this requirement shall not exceed $200 per day and $10,000 in the aggregate. (This conforms to the amount of the tax credit.) Small Business and Other Exemptions: The Secretary of Labor is authorized to exempt health care providers and emergency responders and small businesses with fewer than 50 employees if the requirement would jeopardize the business as an ongoing concern. The requirements to restore the employee to their position after the paid leave is taken do not apply to businesses with fewer than 25 employees if the position no longer exists because of the public health emergency (provided the employer takes certain actions to try and assist the employee). Employers with less than 50 employees are exempt from civil actions brought by employees for violations of this section. Employers of employees who are healthcare providers or emergency responders may elect to exclude such employees from the paid FMLA. Effective Dates: The provision takes effect not later than 15 days after enactment of the bill and sunsets on December 31, 2020. Funding: Each quarter, private sector employers subject to the requirement are entitled to a fully refundable tax credit equal to 100% of the qualified paid FMLA wages paid by the employer. Qualified paid FMLA wages are capped at $200 per day and $10,000 overall. The tax credit is applied against employer Social Security taxes, but employers are reimbursed if their costs for qualified paid FMLA exceed the taxes they would owe. The Treasury Secretary is provided with regulatory authority intended to help with cash flow issues, for example by waiving penalties on failing to deposit payroll taxes in anticipation of the credit. Additional Credit for Health Plan Expenses: The amount of the tax credit is further increased by the amount of the expenses of the employer’s health care plan allocable to the qualified sick leave. This allows the employer to seek reimbursement for the cost of continuing to provide health insurance while the employee is on sick leave. Tax on Employers: Paid FMLA is not considered wages for Social Security tax purposes and for half of the Hospital Insurance Tax, for the other half of the Hospital Insurance Tax, the applicable tax credit is increased to cover the cost of the payroll tax. Self-Employed: There is a similar tax credit against self-employment taxes for individuals who are self-employed but would otherwise qualify for paid FMLA if they were an employee of an employer, but leave would be capped at 50 days.Examples:
- Jane owns a manufacturing facility with fewer than 500 employees. One of his employees has been exposed to coronavirus and ordered by a public health official to remain away from work and the employee is unable to perform her job. After 10 days of unpaid or paid leave, she is eligible for paid FMLA for the time she must remain quarantined for up to 12 weeks. The manufacture will be reimbursed $200 a day up to a total of a $10,000.
- Same as above, but the employee can perform her job functions remotely. She is not
eligible for paid FMLA leave.
- Jane ’s manufacturing facility has more than 500 employees. It is not subject to paid FMLA leave under the bill. State or local laws, however, may apply.
Provisions for Diagnostic Testing:
- Requires private health plans to provide coverage for diagnostic testing at no cost to the consumer
- Waives beneficiary cost sharing under Medicare Part B when provider visit includes diagnostic test
- Requires Medicare Advantage to provide diagnostic test and associated provider visit at no cost to the beneficiary
- Requires Medicaid to provide diagnostic test and associated provider visit at no cost to the beneficiary
- Requires that those under TRICARE, Veterans programs, Indian Health Services, and federal civilian workers have coverage for diagnostic testing without cost sharing
- $1 billion to reimburse cost of testing for individuals without health insurance
- $82 million for Defense Department Health program
- $64 million for Indian Health Service
- $60 million for Veterans Medical Services
- 6.2% increase in FMAP – State Medicaid Match Rate
- Increase in Medicaid allotments for U.S. territories
School Nutrition Programs, WIC, SNAP, Senior Food Programs:
- $500 million for the WIC program
- $400 million for Dept of Agriculture Commodity Assistance program for local food banks
- $100 million for nutrition assistance to U.S. territories
- $250 million for senior nutrition programs including home -delivered meals and congregate nutrition
- Authority to provide school nutrition benefits, including through the EBT system, for families
with children in schools closed for five or more days
- Authority for state waivers for certain program requirements under school nutrition, WIC, and SNAP to respond to COVID-19
- Suspension of SNAP work and work training requirements
Medical Devices Liability:
- Provides limited liability protection for manufacturers of personal respiratory protective devices
Phase 3 – Coronavirus Aid Relief and Economic Security Act (Updated with latest can be found here)
Summary information below from NPR: “Senate Republicans Unveil New Coronavirus Relief Package” (Amendments likely to alter some provisions)
Cash Payments The bill includes cash payments of as much as $1,200 per person and $2,400 per married couple. Individuals with an adjusted gross income of less than $75,000, and $150,000 for joint filers, would receive the full payment. People earning over that amount would see their payments reduced by $5 for each $100 in income over that amount. The benefit completely phases out for individuals earning over $99,000 and married couples making more than $198,000. Small-Business Loans Businesses with fewer than 500 employees could apply for fee-free loans of up to $10 million that could help cover payroll, employee salaries, mortgages, rent and some other debt obligations. Businesses that retain their employees and payroll levels between March 1, 2020, and June 30, 2020, would have any of that money used for payments on preexisting debt and payroll forgiven. Industry-Specific Loan Guarantees The bill includes $208 billion in loan guarantees for industries that are hurting because of the coronavirus. This includes up to $50 billion for airlines, $8 billion for cargo carriers and $150 billion for other unnamed businesses. Health Care The bill would require the Food and Drug Administration to prioritize and expedite the review of new drugs. It also includes requirements that insurers pay for COVID-19 testing without a fee for patients; free coverage, without cost sharing, of certain vaccines as they become available; and $1.32 billion in additional funding for community health centers. Tax Deadline The legislation would move the tax-filing deadline from April 15 to July 15 for most filers. Student Loans The bill allows for people to defer payments on federal student loans and allows students whose universities have canceled classes to keep Pell Grants.
The summary information above is intended to give our membership a better idea of the work being done on the federal level. While the bills passed by Congress offer substantial help during difficult times, we also encourage you to look to the resources at the local and state level. You can find a resource listing of additional tools at our COVID-19 Resources page.