COVID-19: HR and Employee Benefit Challenges
Learn more about HR and employee benefit challenges
ANNE HENSLEY: Good afternoon, everyone. Welcome to today's webinar, COVID-19, Human Resources and Employee Benefit Issues. My name is Anne Hensley with McGriff Employee Benefits. And I will be one of your three speakers today. Two of my colleagues, Laura Clayman and Christy Showalter will also be joining me on this webinar today as well.
This is one webinar in a series of three in McGriff's Coronavirus Advisory Series. We ask that you tune in to those webinars as well as they will cover issues related to property and casualty insurance topics, among other topics that will not be covered in today's webinar.
Let's start by acknowledging what everyone is well aware of at this point that COVID-19 issues are changing rapidly. This presentation is being recorded on March 19, 2020. Congressional actions, regulatory guidance, and state mandates relating to COVID-19 are in a constant state of flux.
McGriff is committed to bringing you the most up to date and relevant information on this topic. The information contained in this presentation is current as of the date of this recording. So please keep this in mind if you review this material at a later date.
We will continue to supplement this with additional webinars, publications, et cetera as we navigate the evolving landscape that is COVID-19. Our presentations are intended to provide general information. This does not constitute legal text or medical advice. Therefore the material presented today is for information purposes only.
McGriff has all of the in-house resources you need to help you get the most out of your employee benefit program. Our subject matter experts are committed to providing creative solutions to help clients manage overall costs, mitigate risks, and educate and engage employees. As I said earlier, my name is Ann Hensley, joining me today is Laura Clayman and Christy Showalter. They will be speaking a little bit later in our webinar.
Let's go over the agenda for today. We will discuss the evolving status of COVID-19. We will discuss HIPAA and ADA implications, health benefit implications, HDHPs, health savings accounts, telemedicine programs, and employee assistance programs. We will discuss the staffing challenges facing employers right now. We will talk about employee leave protections and benefits. And then we will leave you with additional resources that we think you might find particularly useful during this time.
The new coronavirus disease, COVID-19, is a respiratory disease as everyone knows by now, caused by a novel or new coronavirus that had not been previously identified in humans. It was first detected in China and has now been detected in more than 150 locations internationally, including of course, the United States. The virus causes respiratory illness like the flu with symptoms, such as a cough, fever, and in severe cases, pneumonia.
So taking a look at the timeline here. On January 21st, the first coronavirus case in the US was reported in the state of Washington. The man in his 30s developed symptoms after returning from a trip to the region in China where the outbreak began. On January 29th, the White House announced the formation of a new task force to help monitor and contain the spread of the virus and ensure Americans have accurate and up to date health and travel information.
On January 30th, the US reported its first confirmed case of person-to-person transmission of the coronavirus. On the same day, the World Health Organization determined that the outbreak constitutes a public health emergency of international concern. On February 11th, the World Health Organization named the coronavirus, COVID-19.
On March 11th, the World Health Organization declared COVID-19 outbreak a global pandemic. And on March 13th, President Trump declared a Federal Emergency. We are left with employers who are now trying to navigate these uncharted waters to best protect their employees while continuing to operate their business.
You can see here a state map provided on the CDC website with an overview of reported COVID-19 cases. Most heavily affected states being of course, Washington, California, New York, Florida, and Georgia. This is going to continue to change, obviously, and it will change rapidly. So please continue to check the Centers for Disease Control website regularly for updated information.
Let's move on to HIPAA and ADA implications. Over the past couple of weeks as COVID-19 has progressed and more employees are affected, we have been asked about HIPAA and the Americans with Disabilities Act implications and whether or not those rules still apply during a pandemic or other emergency situation. Both of those are still in full effect.
In fact, we have newly issued communication pieces from the agencies in charge of enforcing these rules with a rather stern reminder that they are in effect and employers should still adhere to the rules. On the next few slides, I will go over some common scenarios and questions we have received that hopefully will provide clarity on what employers may ask and require of employees during this time and what is prohibited by these rules.
As employers are looking to protect their employee populations and prevent the spread of the virus, this is a very common question that we are receiving. Can we administer medical tests or take an employee's temperature as a condition to work? Obviously, employers are wanting to prevent the spread of the virus in their workplace. So they are wanting to control that to the best degree possible. The ADA still applies during a pandemic however. So we are bound by the ADA guidelines.
Generally speaking, the ADA protects employees during employer inquiries into their medical status or employer conducted medical examinations. The ADA covers employers with 15 or more employees, including state and local governments. So in the above question, the taking of the employee's temperature would be considered a medical examination under the ADA.
Generally, this would be prohibited by the ADA unless an employer can show the medical examination is job-related and consistent with business subsidy, or the employer has a reasonable belief that the employee poses a direct threat to the health or safety of the individual or others that cannot otherwise be eliminated or reduced by a reasonable accommodation.
And that last one is really key now in the current climate. Normally without having officially been declared a pandemic, a normal cold or flu wouldn't give rise to the level of direct threat which would allow for a medical exam. That has been confirmed by prior EEOC guidance.
But if the CDC or other health authority like a state or local authority, or other local authority, determines that the pandemic is more severe in nature, then that could be categorized as a direct threat. And a medical exam would be warranted and allowed under the ADA. But we really have to have that CDC guidance or another health authority to justify this.
A word of caution here, this is a fact-specific analysis, it will depend on the employer and specific set of employment circumstances. The EEOC is clear in its position that during the pandemic employers should rely on the latest CDC and state or local public health assessments to determine whether the pandemic rises to the level of direct threat or not.
And again, more caution should be used. And keep in mind that an employee infected with COVID-19 really may or may not display physical symptoms, such as a fever. So temperature checks really might not be that useful in this scenario.
We've talked a lot about what employers cannot do. But we do have some guidance and insight on what can be done under the conditions we are currently experiencing. Employers are permitted to ask about any recent travel and exposure to COVID-19 or contact with others who have recently traveled to at risk countries or been exposed to the virus.
If an employer has a reasonable belief based on an objective evidence that the employee is a threat to others, it can ask the employee to stay home for the 14-day incubation period. Employees may be eligible for some paid and/or job protected leave depending upon state or federal legislation and company policies that might play a part there too. We will talk about the federal and state legislation a little bit later in this presentation.
We do have direct guidance from the EEOC. The EEOC is pandemic preparedness in the workplace and the Americans with Disabilities Act document that is given in the link below. That was issued as a result of the H1N1 pandemic in 2009. And the EEOC has confirmed it is relevant and remains in effect today to help us with the COVID-19 virus. It identifies established 88 principles to answer questions frequently asked about the workplace during a pandemic.
So for the question above, during a pandemic, how much information may we request from employees who call in sick? And can we send them home if they display influenza like symptoms during a pandemic? The answer is yes. After a pandemic has been declared, ADA covered employers have a bit more leeway in such situations. Here's what they actually can do.
Those employees showing signs of respiratory illness can be asked to leave the workplace and stay at home until they are symptom free. ADA covered employers, which we talked about previously, may ask employees if they are experiencing influenza like symptoms. Recall that this guidance was given as a result of the H1N1 influenza pandemic in 2009. So influenza like symptoms such as fever or chills and a copper sore throat, that all translates over to COVID-19. All information must be maintained as a confidential medical record.
If an employee becomes ill with symptoms of influenza like illness at work during a pandemic, the CDC states that the employee should leave the workplace. Advising workers to go home is not a disability related action if the illness is akin to a seasonal influenza. Additionally, the action would be permitted under the ADA if the illness were serious enough to pose a direct threat, which we again talked about on the prior slide.
The World Health Organization has declared COVID-19 as we talked about during the timeline to be an international pandemic. And this EEOC pandemic complication we're discussing right now includes a separate section that answers common employer questions about what to do after a pandemic has been declared and then takes those questions and applies those principles to the actual COVID-19 pandemic with results that are very similar to the ones we just discussed.
But we think that the following might be useful. And it would be useful to click on that link in the lower left hand corner to go review these questions. Those questions are, how much information can an employer request for an employee who calls in sick in order to protect the rest of its workforce during the COVID-19 pandemic?
When may a ADA covered employer take the body temperature of employees during the COVID-19 pandemic? And does the ADA allow employers to require employees to stay home if they have symptoms of the COVID-19? And as we've discussed, there is a great deal more leeway here in taking someone's temperature, sending someone home, and then making them stay home while they are either tested or symptoms manifest, et cetera.
The last FAQ on the separate Q&A on the EEOC's pandemic publication pertains to doctor's notes for those employees who have been away from their workplace during a pandemic and the requirement to provide a doctor's note certifying their fitness to return to work. The requirement to provide such a note is permitted under the ADA. But the EEOC brings up a really important matter of practicality right now.
Doctors and other health care workers are inundated now during this time to provide fitness for duty documentation. And therefore new approaches might need to be relied upon such as a standardized form, or a stamp or email to certify if someone does not have a pandemic virus. So how much information may I share if someone has been exposed, if an employee has been exposed to COVID-19 or actually tested positive for the virus? Here are some good guidelines. Maintain privacy of all disability related inquiries and medical examinations. It is just a great idea off the bat.
Information must be collected on separate forms and certain separate medical files can be treated as a confidential medical record. In the event of potential exposure and without releasing individual information, just let employees know that they might have had contact with someone who was recently exposed to the virus or actually tested positive for the virus. Speak in general terms to the extent you can do so to preserve that confidentiality.
Let's move over to a little bit of a HIPAA discussion here, a little bit more in depth on HIPAA. The US Department of Health and Human Services Office for Civil Rights recently issued a bulletin that reinforces HIPAA. Privacy and security rules still apply in an emergency situation such as a pandemic. To give you a brief overview of HIPAA, only covered entities and business associates are actually subject to HIPAA. Coverage entities include group health plans, health care providers, and health care clearinghouses.
The HIPAA privacy rule prevents covered entities to use and disclose Protected Health Information, PHI, without a patient's authorization for treatment, payment, and health care operations. It's really important to consider where the health information comes from to determine if it's PHI or not PHI. So for example here, if we have an employee who approaches his or her employer with the news that he or she has been exposed to or tested positive for the virus, that would not be protected health information and not covered by HIPAA because it is not coming from the group health plan, a covered entity.
However, other privacy laws or company privacy policies might still apply. If however the information comes from the group health plan, this information would be protected health information and subject to HIPAA. It should be handled according to the privacy and security rules and should not be used in an adverse employment matter. It should not be released without an authorization.
HHS rule 10 that we just talked about emphasizes that HIPAA does not preclude the use and disclosure of the minimum amount of protected health information necessary to treat a patient, to protect the nation's public health, or to prevent a serious and imminent threat to the health and safety of a person of the public. However, in a public health emergency, HIPAA permits covered entities to disclose PHI without a patient's authorization to the following categories of individuals and entities-- foreign government authorities at the direction of public health authorities, persons at risk, family, friends, police, disaster relief organizations who are involved in the patient's care, and anyone else if it would lessen or prevent a serious and imminent threat to the health and safety of the public at large, or an individual person.
Let's move on to how employers may leverage their group health plan right now to best assist employees. So what happens when an employer offers a high deductible health plan with a health savings account? Can that plan cover COVID testing and treatment costs without a deductible or one with below the minimum deductible required for HDHPs without destroying HSA eligibility? We know that there's great concern over that right now.
Thankfully, we do have some relief in this area. On March 11th, the IRS issued notice 2020-15 clarifying that COVID-19 vaccines are considered preventative care. And that until further notice, all medical care services received and items purchased associated with testing for and treatment of COVID-19 may be provided by a health plan without a deductible or at reduced or no cost to participants without disqualifying the HDHP or contributions to an HSA.
So an HDHP can provide benefits under the plan's deductible for medical care services and supplies to test for and treat COVID-19. Individuals enrolled in an HDHP that covers COVID-19 related costs before the deductible is met or will remain eligible to contribute to a health savings account. So that's great news.
Remember, generally, HSA holders can only make or receive contributions to an HSA connected to an HDHP with no other disqualifying pre-deductible coverage. Now, keep in mind, this is not required under federal tax law. Therefore, employers do have the option to choose to adopt it. Or they can choose to not adopt it.
However, some states have taken steps to require insured plans to provide this coverage. I fully expect that that number of states that required so will grow as the days go on. Employers with self-insured plans should consider whether to make such an amendment. If they do decide to do this, plan sponsors must comply with all the normal requirements for a change in the plan coverage, such as an amendment, the summary material modification distribution, and should work with their TPAs on this issue as well.
If your plan so offers telemedicine and employee assistance programs, now might be the time to encourage use of such programs. Telemedicine, particularly right now might be a very valuable option for those seeking medical help for non-emergency care. These services often provide access to care and specialist referrals. They also very importantly minimize external exposure as we are all trying to limit the amount we expose others and we are exposed by others. They also preserve emergency services and resources for those who absolutely need it most.
EAP programs provide helpful benefits for physical and mental health services but also personal finance, stress management, services that will help with life changes and challenges which are critical in uncertain times, such as the time we are finding ourselves in right now. And then health plans may cover the cost of COVID-19 testing.
Many states have mandated again that fully insured plans must cover costs of COVID-19 testing and treatment at no cost to members. And while self-funded plans generally aren't subject to those state mandates as fully insured plans are, we've been hearing that most claims administrators are automatically waiving cost sharing for COVID-19 testing and treatment unless the plan sponsor actually opts out of that. Let's move on to some staffing challenges with Laura Clayman.
CHRISTY SHOWALTER: Thank you, Ann. As a result of the COVID-19 pandemic, employers are having to change the way they do business. And they're having to change it really quickly. We're going to talk about some DOL items related to compensation. And then my colleague, Christy Showalter is going to talk about certain employee benefits that might be available to employees if or when these business decisions have to take place, as well as the family first legislation that was signed into law yesterday.
The one stop that employers are taking around the country is allowing their employees to telework. According to the CDC and other health authorities, teleworking really is one of the most effective ways of reducing the spread of this virus. Teleworking significantly reduces the frequency and duration of that in our personal contact during the workday and allows for social distancing during the day that would otherwise not be possible.
In addition, it limits the need to physically commute to and from the workplace. In larger cities, that reduces a great deal of interpersonal contact for a public transit system. And let's face it, in some places those transit systems have already altered their operations or halted them completely. And of course, with school closures across the country, parents often need to be able to work from home because of childcare issues.
So with this shift in business and encouragement for telework, we did receive some guidance from the DOL directly relating to this subject. So the first question that the DOL answered for us was, can an employer require employees to telework? And the DOL tells us yes. An employer can require employees to telework as an infection control or prevention strategy.
This can also be a reasonable accommodation under the Americans with Disabilities Act, ADA, with a couple of caveats. Employers cannot single out employees to telework based on protective class which isn't as much of an issue right now that federal guidance is strongly encouraging all Americans to maintain social distancing through telework if at all possible.
But if telework was granted as a reasonable accommodation for an employee with a disability, that employee must be compensated at the same hourly rate or salary as if they would have received their hourly rate or salary if they're working on site.
The DOL provides some additional guidance to telework and compensation. Does an employer have to pay employees the same hourly rate salary for telework? We talked about reasonable accommodation. But it also may be the case if the employee is part of a collective bargaining agreement or another employment contract. Otherwise the following guidelines that you're familiar with already with non-exempt and exempt employees apply.
For non-exempt employees, the Fair Labor Standards Act, FLSA, requires an employer to pay non-exempt employees for hours actually worked. In order to do that for teleworking, the employer must have a method in place for employees to track those hours, and also very importantly to account for any and all overtime owed to that employee.
In addition, an employer should decide prior to telework assignments whether or not there will be limits on non-exempt employee hours, establish whether overtime meets prior approval for those employees. Another consideration to take into account for your non-exempt telework employees is that meal and rest breaks must be taken into account. There are approximately 20 states, I believe that have required meal and rest breaks.
The non-exempt employee can't volunteer their hours to fill in for others without being paid. They certainly can work additional hours to help out in a workforce as long as they are compensated for that. And finally, on-call time might be an issue for a non-exempt employee as well, whether or not a non-exempt employee is paid for on-call time for telework depends on whether they're waiting to be engaged or engaged to wait.
If that non-exempt employee must be available if needed or expected turnaround projects quickly such that the non-exempt employee cannot effectively use the time for his or her own purposes, that's engaged wait. And that is working while on call and needs to be compensated for non-exempt employees.
For exempt employees there are different rules. By the nature of the definition of an exempt employee, that employee must have a guaranteed weekly salary for any week in which they perform work, which means any work, even if that work is minimal. And the most common example is if that exempt employee is checking his or her email for work. That means that they're working and they must receive that full salary for their week.
The FLSA requires employers to maintain accurate records for hours for non-exempt employees. But is certainly a best practice to maintain accurate records for all hours worked by all employees, including those exempt employees who participate in telework.
Now, if employees are suddenly asked to telework, there will likely be some expenses associated with that to allow that employee to be able to effectively do his or her job from their home. The employer should furnish or reimburse employees for the tools necessary to telework. But an employer must reimburse the employee to the extent that those expenses cause that employee's wages to dip below minimum wage. So some of those DOL examples of these expenses are the things that you think about, internet access, computers, laptops, phone lines, and anything that is necessary for that employee to be able to effectively do their job.
So what about those jobs that can't be performed on a telework basis? And there are certainly many of those out there. The DOL encourages employers to think about other options to help promote that social distancing to give us that protection, such as staggered work shifts and more physical distance between work spaces. And those are some ways that can help if telework is not an option.
Another option is possibly assign those employees special projects that might be able to be done on a telework basis. But be sure you're compensating those non-exempt employees for those hours worked.
So what should employers do now? Well, if you haven't thought about it already, a company does need to consider implementing teleworking as an option of the company, or expanding your current program if you are already allowing a segment of your employees to telework.
The CDC guidance strongly encourages employers to allow this as an option. And the DOL is asking employers to be flexible in this difficult time for all of us. The first, determine which employees are essential to work in certain physical locations, who can't telework and who can?
Establish a policy if you don't already have one in place. And a checklist, which would include things like performance expectations for employees with different job descriptions, the need for overtime approval if there are going to be limitations on the hours that non-exempt employees will be working, an acknowledgment of any company equipment provided by the company for that employee to do their job.
Unfortunately, in many areas of the country, in many industries, telework just isn't an option. States are advising certain businesses to close their doors for a certain time period to help slow the spread of COVID-19. For example, many cities have instructed bars, casinos, movie theaters, gyms to close immediately. And in many parts of the country, restaurants are only doing takeout delivery and don't have dine in options at this time. So many of these businesses are having to lay off employees or place employees on specific furloughs while the office temporarily closes its doors.
The DOL gives us guidance here as well. These rules are similar to teleworking. Does an employer have to pay an employee who is sent home due to a temporary office closure? And for non-exempt employees, no. The DOL rules are that the employer can generally schedule non-exempt employees for fewer days or hours without liability concerns. And employers do not need to pay wages to non-exempt employees for hours not worked.
Exempt employees, the rules are very similar to ones we've discussed with telework. Note that if an exempt employee is on a furlough, employers need to have appropriate expectations that those exempt employees will not be working. And that includes checking email and voice mail.
The employer should have clear communication with employees, exempt employees that that work is not authorized during that time without advance written approval so that you don't run into a problem with an exempt employee doing work during that week and needing to be compensated for the entire weekly salary.
The next question is, can an employer direct salaried exempt employees to take vacation or leave without pay due to COVID-19 office closure? The FLSA does not require employer paid vacation time. An employer can require an exempt employee to use paid leave for any partial or full day absences as long as the exempt employee still receives payment for an amount equal to the employee's guaranteed salary.
We talked a lot about exempt employees and requirements for a full weekly salary. But on your screen on the right, there is a list of permissible deductions that are allowed even during COVID-19 situations. When an employee is absent from work for one more days for personal reasons, when those absences the deduction is made in accordance with a bona fide plan policy or practice, if they're offsetting amounts of the employee receives a jury or witness fees, or temporary military duty pay might be something that comes up more right now in our society with what we're doing with COVID-19.
Penalties imposed in good faith for safety rules, disciplinary suspensions, or in the employee's initial or terminal week of employment. For unpaid leave under the FMLA is up there as well, Chris is going to talk about how the Family's First Coronavirus Act might have some effects on FMLA.
And then finally, things are happening so quickly. Does an employer have to give advance notice for a mass layoff right now with COVID-19 closings?
The Worker Adjustment and Retraining Notification, the WARN Act, helps insure advance notice in cases of certain plant closings and mass layoffs. And depending on this WARN Act or state mini-WARN statutes may require employers to provide advance notice to employees and government officials in certain situations.
Here, it's not clear if there is a blanket exception for COVID-19 closings. The federal WARN and most state mini-WARN statutes have provisions addressing terminations due to natural disasters. And there are exceptions, like a short notice period if terminations results in circumstances that were not reasonably anticipated 60 days before employees are terminated.
But even a shortened notice under the WARN Act and many of these state mini-WARN statutes requires giving actual written notice with advance notice. So what we would recommend is if your company would normally fall under the WARN Act to consult with counsel for guidance on these issues.
CHRISTY SHOWALTER: Well, great, thank you so much, Laura. And again, I'm Christy Showalter. And we are now going to take a look at potential protections and benefits that might be available in the event that leave is required. As Laura just discussed, a number of employers are dealing with the very real possibility that employees are going to need leave, whether it's due to exposure to or illness from the virus itself. Potentially the need to care for children due to school or daycare closures, or even temporary layoffs or furloughs due to business downturns and closures.
So let's take a look at some of the benefits and protections that may be available. Certainly the answer to this question is developing on a daily basis. But there are several benefits that we are aware of that may be available to employees depending on the reason for leave.
These include the Family Medical Leave Act, potentially company sponsored PTO, vacation or sick leave, state mandated sick leave, short-term disability, and unemployment insurance. And as of just yesterday afternoon we now have a new acronym to become familiar with, the FFCRA, or the Federal Families First Coronavirus Response Act. Let's start with a deeper look into this new legislation.
And that's where this act was passed by the House on March 13 and amended on March 16 and then passed by the Senate and signed by the president yesterday, March 18th. It's anticipated that this act is required to take effect no later than April 2nd, potentially sooner. McGriff will definitely be providing more detailed guidance as it's available. But for now, let's take a look at the general overview of the new legislation.
That's where the act itself applies to private employers with 500 or fewer employees. And it contains two significant components, the emergency paid sick leave act and the Emergency Family and Medical Leave Expansion Act. So first taking a look at the Emergency Paid Sick Leave Act, or EPSLA.
The Act requires up to 80 hours of leave for full-time employees, or the equivalent of two weeks of pay for part-time employees based on their prior two week average of hours. And this is for the following reason. This is if the employee is subject to a federal, state, or local quarantine related to COVID, if the employee has been advised by a health care provider to self quarantine due to concerns related to COVID, or if the employee is actually experiencing symptoms of COVID in seeking a medical diagnosis. The amount that EPSLA paid to an employee for these purposes is going to be capped at $511 per day, or $5,110 in the aggregate.
2/3 of these amounts for leave are going to be required if the employee is caring for an individual who is subject to a quarantine order or health care provider advice to self-quarantine. And note that this is any individual. It's not just family members.
Also if the employee is caring for his or her child, if the school or place of care of the child has been closed, or if the child care provider is just unavailable due to COVID precautions, or also if the employee is experiencing any other substantially similar conditions specified by Health and Human Services. In these cases, the amount of EPSLA paid to an employee would be capped at $200 a day.
There's also the second component to this Act, the Emergency Family and Medical Leave Expansion Act, which as the title indicates, amends and expands the FMLA adding a qualifying reason for leave for an employee needing to take time off to care for a child under the age of 18 due to a school closure or other lack of childcare.
The first requirement of this component is the allowance of 10 days of unpaid public health emergency leave. It's expected that most employees are going to qualify for some paid leave during these first 10 days under the Emergency Paid Sick Leave Act. If additional leave is required, the Emergency Family and Medical Leave Expansion Act provides for paid leave for the duration of the qualified leave. This leave will be paid at a rate of 2/3 of the employee's regular rate up to $200 per day.
It's important, one thing to note is that this act does not increase the amount of FMLA available to an eligible employee. Eligible employees are still eligible for up to 12 weeks of FMLA leave during the designated 12-month period. So if an employee has already used all or a portion of their FMLA, the available balance may be reduced from the 12-week period.
This act will apply to employers with 500 or fewer employees. And as we know, the FMLA typically only applies to employers with 50 or more employees. So are there any special considerations for small employers with these new expanded FMLA requirements? And thankfully the answer is yes.
Employers that are subject to the PHEL requirement but who do not otherwise meet the requirement to be a covered employer under the FMLA are not subject to a private right of action by employees for damages, although they do remain subject to an enforcement action by the DOL. The DOL has the authority to exempt small businesses if that's going to jeopardize the viability of the businesses of going concern. So obviously, we still have a lot to be fleshed out in regards to this new act. And so be on the lookout for additional guidance from your McGriff advisors.
So while we discussed a little bit about the expansion of FMLA, let's take a step back and look at just the FMLA's basic protections. As we just mentioned, the act is the new Families First Coronavirus Response Act that applies to employers with 500 or fewer employees. And obviously, FMLA is going to have further expanded reach affecting employers with 50 or more employees. So it's going to affect those larger employers as well.
And that's where the DOL's released Q&A document reminding employers that employees out with the flu or caring for ill family members may be entitled to FMLA leave. Under the FMLA, covered employers are required to provide job protected unpaid leave for specified family and medical reasons, which is going to include a serious health condition. And this is where the DOL has clarified that the flu or the virus such as COVID may qualify where complications arise.
So in these situations, you're going to want to be sure if the employee is taking leave due to their own illness or caring for a family member who is sick due to the virus, you'll want to be sure that you've issued the required notifications and classified the leave under the FMLA to ensure its protections, such as continuation of benefits and job protection.
In a situation, maybe, there are situations where the employees have demonstrated no symptom but may be either self-quarantined or is asked to quarantine due to potential exposure, or to take care of an immediate family member who is quarantined, how does the FMLA apply to that? And this is where, if the employee demonstrates no symptoms of the coronavirus, the employer should be careful not to count any of this leave against the employee's FMLA allotment, as at that point, there's no evidence of a serious health condition.
Ideally, these employees would be able to work from home as Laura mentioned, remote telework, as they're probably healthy enough to continue working. However, if remote work is not available and leave is required, employees should be instructed to self-monitor for symptoms of the virus, which could include the fever, coughing, shortness of breath, or difficulty breathing. And if those symptoms develop, the employee should immediately inform the company, at which time that's when you can initiate the FMLA process and issue notices classifying the leave is FMLA.
Then another question we've been receiving is, employees, can they stay home or refuse to work due to just simply fears of being exposed to the virus and to minimize the risk of contracting the virus? In this scenario, again, there's no actual serious health condition necessitating the leave. Some FMLA would not apply.
And while there are some potential considerations under the Occupational Safety and Health Act, or OSHA, these are going to be discussed in more detail by our teammates in other presentations in the McGriff Coronavirus Advisory Series. But the general rule is that employees are only entitled to refuse work if they believe they're in imminent danger.
So kind of turning to the next potential protection and benefit, employees may also have benefits under a company sponsored PTO or vacation or sickly policy. And as has been mentioned, the CDC has encouraged employers to make sure workers stay home when they're sick to help prevent spread of the virus.
So this is a really good time to review your company's policies and consider several best practices. Really looking at, are your policies flexible and do they encourage employees who might have been exposed to the virus to self-quarantine? Or could workers feel inadvertently pressured to report to work?
A number of employers have even offered to now pay employees for quarantine periods and to encourage employees to comply and self-report to help minimize workplace exposure. Are employees permitted to use sick leave for not only their own personal illness but also the illness of immediate family members. Some employers have expanded their sick leave policies to include care of family members.
And then another issue to consider and discuss is the common requirement for a doctor's note for absences. Just as a practical matter, doctors and many other health care professionals may be too busy during and immediately after this outbreak to provide a doctor's note for an absence. So this is where new approaches may be necessary, maybe considering reliance on clinics to provide a forum, or an email to certify the employee's absence, and just to reconsider the position on that.
And then finally, another potential consideration is the offer of additional paid or unpaid leave through emergency leave banks, or leave sharing policies, donated leave. In just one word of caution on leave banks, this does potentially have tax consequences regarding leave sharing arrangements. And this is where the IRS has outlined several important steps an employer should take who is looking at offering a leave sharing plan. Specifically, that you must have a formal written leave-sharing program that meets IRS requirements. So we recommend really consulting with the tax professional, as well as reviewing IRS notice 2006-59 for detailed guidance on what must be contained in a leave sharing plan.
And then now in addition to our new federal legislation requiring emergency paid sick leave, a number of states and localities have also passed their own sick leave regulations. And this is where for employers with employees in the highlighted state, it's going to be really important to review state laws to determine if paid leave is available. And what we've seen is that many of these states have expanded the availability of benefits to employees who are unable to work due to having symptoms or having been exposed to the coronavirus or being unable to work to care for a family member who's ill or quarantined.
In any event, the employees actually affected by the virus, employees may also have access to short-term disability through an employer-sponsored disability plan, or even a state-mandated disability plan. Particularly if the employee has actually been diagnosed with the illness and is sick or unable to perform the major duties of his or her job, short-term disability benefits will likely be available.
Of course, eligibility for benefits is going to depend significantly on the plan's definition of a disability. So we recommend working closely with your employee benefits advisor and the carrier to review your plan's definition of disability and what benefits might be available. Typically, simply staying at home due to a quarantine may not fit under the definition of a disability as there's not a corresponding physical or mental impairment. However, some policies do contain a quarantine benefit rider which could provide benefits to your employees in a quarantine situation as ordered by a doctor.
So we've also received several questions asking if an employer can enhance its benefits or waive the elimination period due to illnesses related to the virus. And the answer is, possibly. For employers simply offering a salary continuation program, programs can generally be amended at the employer's discretion.
Fully insured disability programs are going to have some additional requirements. In addition to the critical step of securing the approval of your carrier, which is the most important step, insured disability programs are also governed by ERISA and are going to require a formal amendment to your plan as well as certain disclosures participant.
And then finally, in the event the employee's leave is due to a downturn in business or business closure, state unemployment benefits could also be available. Each state establishes its own criteria for eligibility for benefits as well as defining the benefits that are available. So it's going to be important to consult your state's unemployment division for details.
The DOL has issued some guidance to states, outlining state flexibility in administering their programs and allowing them to elect to pay benefits if the employer temporarily ceases its operations due to COVID, if an individual quarantines with the expectation of returning to work after the quarantine is over, and also if an individual leaves employment due to the risk of exposure or infection or to care for a family member. And this in another area, we're seeing daily changes, several states currently including Washington, Ohio, and Rhode Island have already specifically expanded their unemployment programs in response to the COVID virus.
So now we've got an employee on leave. So let's take a closer look at how an employee's benefits may be handled during a leave of absence. It's really important to understand whether an employee remains eligible for your benefit plans and not to assume that coverage can be continued indefinitely. Otherwise, employers could inadvertently find themselves self-insuring all claims in the event a carrier challenges an employee's eligibility.
So how long can you continue benefits during a leave of absence? And I truly wish there were a simple answer to this question. Instead, there's more of a series of questions and considerations that we will get in addressing this one. First, and what I would consider most importantly is, how does your plan document define eligibility? And termination of benefits, when are benefits required to be terminated?
Plans vary significantly. We have seen some plan documents that allow continuation of benefits certainly up to 12 weeks during FMLA. However, if it's a non-FMLA option, it may be limited to 30 days. So if an employee's leave extends beyond 30 days for a non-FMLA reason, benefits may need to be terminated and Cobra offered due to the reduction in hours worked. Other plans provide for longer periods of coverage during a leave of absence. So it's important to know how your specific plan defines eligibility.
Another important question is, is the leave protected by FMLA or some other state leave regulation that would require continuation of benefits during that protected leave? What measurement method have you adopted for determining full time status under the Affordable Care Act? For those of you who have adopted the look-back measurement method, you're familiar with the measurement instability period.
So if an employee is currently in a stability period, they may still be considered full time and eligible for benefit through the end of that stability period, even if they're currently on a leave of absence. So it's important to know what measurement method you've selected and how that could impact eligibility for benefits.
So also, is there a company policy addressing how long benefits can be continued during leave? This is an area we would strongly recommend developing a proactive policy of how long your company is willing to extend benefits during an employee's leave of absence. And working closely with your benefits advisor and the carrier to make sure that decision is incorporated into your plan document.
And maybe there are some situations where this question is not addressed in any of the above considerations. So then we also look at, what is your company precedent? How long have you continued benefits for other employees on a leave? So as you can see, it's not just a simple answer of how long benefits can be continued. It really is a discussion of diving into your plan documents, your company policies, and looking at how long benefits could be continued before Cobra would be offered during an employee's leave of absence.
And then of course, if an employee is not working, it raises the additional question of, what about their premium payment? What happens if the employee is unable to-- they don't have any current payroll, so what do we do about their premium deductions?
And this is where it is really important to establish your expectations on the front end and communicate with employees as employees are going on leave and are unable to work. Can you provide written communication outlining, how much are they required to remit? When are those premiums due? And what grace periods might apply?
You're required to have a minimum of a 30-day grace period for payments. And in many cases, employers are extending that to a longer period in light of the challenges of the COVID virus. Address to whom payment should be made. And what happens if the employee fails to pay timely?
Are benefits going to be terminated retroactive to the date of the last payment? Will they be terminated just from that point forward. Address what the consequences are. Keeping in mind that if coverage is terminated due to the failure to remit a timely payment, this is not a Cobra event. So extended coverage would not be available.
And then note, if the employee is actually on FMLA leave, additional notifications are required under the FMLA before coverage can be terminated. Then we also received several questions of can we adjust, either increase or decrease our employee's premium contributions while they're on furlough or leave? And possibly, generally employers can change welfare plan terms at any time in their discretion unless they may have given up that right through communications they provided to employees, maybe either the plan document language, language that was in benefit enrollment materials. It's important to go back and see what was promised to employees. If changes are made, a summary of material modifications is need to be prepared and issued to participants.
And then additionally, if premiums are included or mentioned in the summary of benefits and coverage that's distributed to employees during renewal, a 60-day advance notification is going to be required under the ACA. So it would be at least 60 days before changes could be made to those premiums. And then of course, if a plan is offered on a pre-tax basis, it raises some additional considerations.
One question would be, if the change is significant, employees could be permitted to make mid-year election changes, add coverage or drop coverage. And many of those changes may require carrier approval. So it would be important to coordinate any changes with the carrier before they're made to the plan.
So as you can see, there's a number of additional challenges that we know you're dealing with. We are in the process of preparing information as quickly as we can to get it in your hands. And we're very dedicated to keeping our clients up to date with any new information on COVID. We've prepared some additional resources that you might find useful as things continue to progress.
We've got links that are available that there should be active links on the handouts that you've received. And please be on the lookout for additional materials. We're preparing them daily, including additional webinars from our McGriff series, as well as additional publications. We're going to work through this together. And we're definitely dedicated to keeping you up to date.
And Laura, thank you so much for your participation and the information you shared today. And we certainly thank all of you listening for joining us for this presentation. As I mentioned, be on the lookout for the additional presentations in the McGriff Coronavirus Advisory Series. And we will continue to be in touch. Thank you so much.
Insurance products and services offered through McGriff Insurance Services, LLC, a subsidiary of Truist Insurance Holdings, LLC, are not a deposit, not FDIC insured, not guaranteed by a bank, not insured by any federal government agency and may go down in value.
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