Understanding the CARES Act


The Coronavirus (COVID-19) pandemic has put a major strain on every aspect of daily life around the world, including the United States. As spread of the disease shows no sign of slowing down, there is a steadily increasing concern in the United States regarding the health and wellness of not only our citizens, but the economy as well. In response, the United States Congress has been negotiating a historic stimulus package to address the havoc caused by the pandemic.  

It appears Congress’ hard work has paid off, as they justpassed a $2 trillion package to provide a jolt to the economy reeling from the deadly virus. All Americans would do well to understand the package’s provisions, as it will offer direct relief to businesses and individuals alike.


The $2 trillion stimulus package, negotiated by Republican and Democratic leaders, is the largest economic stimulus measure in modern history. The bill is a $2 trillion combination of tax provisions and other stimulus measures, including emergency business lending. The measure promises to provide help for struggling American families and businesses, as well as health care workers on the front lines of the coronavirus outbreak.

Significant Provisions Affecting Businesses

The tax package itself is broad, with tax payment relief and significant business tax incentives. Here is a list of the most significant provisions affecting businesses:

$367 billion will be made available in loans for small businesses and $150 billion for state and local governments. The loans will be forgiven so long as businesses pledge not to lay off their workers.
Small businesses forced to suspend operations or that have seen gross receipts fall by 50% from the previous year will be eligible for a tax credit worth up to 50% of wages paid during the crisis, so long as they keep their workers employed throughout.
The Treasury Department will distribute $500 billion in loans to struggling industries (e.g., passenger airlines and businesses critical to maintaining national security). Additionally, an oversight board and inspector general will be created to oversee loans to large companies.
Health care providers will receive $100 billion in grants to help fight the coronavirus and make up for revenue lost by delaying elective surgeries and other procedures.
$200 million will be carved out for the Federal Communications Commission to provide health care providers with connected devices to facilitate telemedicine services, with the goal of freeing up hospital beds. Another $25 million will go to a grant program that helps rural communities purchase broadband equipment for telemedicine.
The Commodity Credit Corporation, an institution that USDA uses to stabilize the farm economy, would see its spending authority increased to $14 billion. The package also sets up a $9.5 billion emergency fund for producers, including fresh fruit  and vegetable growers, dairy farmers and cattle ranchers, along with local food systems like farmers markets.
Colleges and universities, as well as school districts, will receive more than $30 billion.
State and local governments will receive $150 billion, with $8 billion set aside for local governments.
The package will provide the U.S. Postal Service with a $10 billion Treasury loan to stave off insolvency. Retailers, restaurateurs and hotels will be able to immediately deduct from their taxes what they spend on property improvements.
Employers can defer the 6.2% tax they pay on wages used to fund Social Security.

Significant Provisions Affecting Individuals

The major piece of the individual tax changes will offer rebate checks based on a new tax credit of $1,200 per filing adult and $500 for each qualifying child. Additionally, unemployed individuals will receive an unprecedented expansion of benefits and payments.

Here is a list of the most significant provisions affecting individuals, many of which will be discussed in detail later in this piece:

Single Americans will receive $1,200, married couples will get $2,400 and parents will receive $500 for each child.
Unemployed individuals, including freelancers and furloughed employees, will get an extra $600 per week for up to four months, on top of state unemployment benefits.
The package also calls for a new pandemic unemployment assistance program, which will provide jobless benefits to those who are unemployed, partially unemployed or unable to work because of COVID-19 and don’t qualify for traditional benefits.
The Department of Education will suspend payments for student loan borrowers without penalty through September 30.
There will be housing protections against foreclosures on mortgages and evictions for renters. Anyone facing a financial hardship from the coronavirus will receive a forbearance on federally backed mortgage loans of up to 60 days. Those with federally backed mortgage loans who have tenants are not allowed to evict tenants solely for failure to pay rent for a 120-day period.

As you can see, the package will have a far-reaching impact as it drives money toward workers, small businesses and industries that have been impacted by the economic downturn due to the pandemic.


Now that you’re aware of the major implications for both businesses and individuals, let’s take a more in-depth look at the most important provisions.

Loans and Tax Credit Available to Small Businesses

Keeping businesses afloat and workers under the wing of their employers is critical for ensuring the economy can quickly restart after the pandemic subsides. To this end, the stimulus package creates a $367 billion federally guaranteed loan program for small businesses that employ 500 or fewer people who must pledge not to lay off their workers. The loans will be available during an emergency period ending June 30, and would be forgiven if the business uses the loan funds for approved purposes and maintains the average size of its full-time workforce, based on when it received the loan.

Additionally, small businesses forced to suspend operations or that have seen gross receipts fall by 50% from the previous year, will be eligible for a tax credit worth up to 50% of wages paid during the crisis, so long as they keep their workers employed through the crisis. Wages remain eligible until business is no longer suspended or gross receipts for a quarter reach 80% of the prior year. The credit could be applied to all wages for employers with fewer than 100 employees, while the benefit is capped at $10,000 in wages per employee for larger employers.

Expansion of Unemployment Benefits

The stimulus package includes a significant expansion of unemployment benefits that will extend unemployment insurance by 13 weeks and include a four-month enhancement of benefits (for reference, many states already provide 26 weeks of unemployment benefits, and thus participants in such states would be eligible for a total of 39 weeks when adding the 13 weeks of federal relief). The enhanced benefits will provide an additional $600 per week on top of what state unemployment programs pay.

Note that many individuals who typically do not qualify for unemployment insurance will qualify under the package, including independent contractors and self-employed individuals. In sum, those who are unemployed, partially unemployed or who cannot work for a wide variety of coronavirus-related reasons will be more likely to receive benefits.

Individual Checks to Taxpayers

As noted earlier, the package will provide direct payments to taxpayers based on the adjusted gross income found on their 2019 federal tax return. All U.S. residents with adjusted gross incomes up to $75,000 ($150,000 for married couples) will get a $1,200 ($2,400 for couples) payment. Families will receive an additional $500 per child, as a way to create a safety net for those whose jobs and businesses are affected by the pandemic. However, the payments will start to phase out for individuals with adjusted gross incomes greater than $75,000. Those with incomes higher than $99,000 will not qualify for payments under the stimulus package.

It is unclear how long it will take the IRS to process every payment. The Trump administration has indicated that Americans could be seeing direct payments as soon as April 6.


Now that you’re acquainted with the impact of the stimulus package, let’s discuss how you might take advantage of these benefits:

How can I obtain a small business loan from the government?

The U.S. Small Business Administration (SBA) is offering loans for qualifying small businesses. These are low-interest (3.75% for small businesses and 2.75% for nonprofits) loans with terms potentially as long as 30 years. You can apply for an SBA loan through its website. Be prepared to provide the following information:

Tax Information Authorization (IRS Form 4506T), completed and signed by each principal or owner
Recent federal income tax returns
Personal Financial Statement (SBA Form 413)
Schedule of Liabilities listing all fixed debts (SBA Form 2202)

You may also need to provide profit and loss statements, recent tax returns and balance sheets.

After you apply, the SBA will review your credit before conducting its own inspection to verify your losses. The SBA says its goal is to arrive at a decision on any disaster loans within two to three weeks. If it determines you are eligible, it will send you a loan closing document for your signature.

How can employees collect unemployment assistance?

If your business is closed because of COVID-19 and your employees cannot work from home, or your employees are unable to work due to the disease or need to take care of someone who has it, they can likely collect unemployment. As each state administers a separate unemployment insurance program, employees should be told to visit their state’s unemployment insurance website, which will provide the relevant details regarding their individual programs. The information employees will need includes their Social Security number and driver’s license or state ID.


If there’s anything that is certain, it is that the full economic impact of this unprecedented pandemic is yet to be understood. Despite the unpredictability, Congress’ historic economic stimulus package is a sight for sore eyes for struggling businesses and individuals alike.

As the pandemic develops and the stimulus package is rolled out, look for more relevant guidance from gente in the near future, and continue to stay abreast of the latest state and federal developments.

Provided by gente

This article is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel or an insurance professional for appropriate advice. © 2020 Zywave, Inc. All rights reserved.

The Coronavirus Aid, Relief and Economic Security (CARES) Act Passed into Law

From our friends at NAHU:
Congress passed a $2 trillion economic stimulus package by an overwhelming vote in the Senate and the House. President Trump is expected to sign the bill immediately.
Individuals and Businesses: The CARES Act functions largely as an economic stimulus by providing cash payments to individuals below a certain income, providing extra unemployment benefits and allowing self-employed individuals to apply for unemployment. For businesses, aid is provided through emergency grants, forgivable loans and relief for existing loans. These provisions are intended to assist employers to help them stay in business, keep employees on their payroll, and allow them to continue to support employees through employee benefits and health insurance.
Healthcare: The CARES Act also includes $100 billion for hospitals and $150 billion for state and local governments to combat the COVID-19 pandemic. The bill expands coverage beyond what was in last week’s Families First bill by requiring health insurers to pay for coronavirus testing beyond those that are FDA-approved, including lab and state-developed tests as well as other tests approved by HHS.
Accessibility for telehealth is also expanded. High-deductible health plans with HSAs may now allow pre-deductible coverage for telehealth and other remote services, as well as allowing the use of HSAs for the purchase of over-the-counter medications without a prescription.
Very limited action was also taken to address surprise medical bills. Under the CARES Act, all health insurance plans would reimburse a COVID-19 test provider at the in-network rate put in place prior to the pandemic. If the provider is out of network, the health plan is to fully reimburse the provider based on the provider’s own “cash price,” which must be made publically available while the public health emergency is still declared. Providers that do not post their test price publically could be fined up to $300 a day.
This action taken by Congress follows the passage of the Families First Coronavirus Response Act and several pieces of emergency guidance released by the Trump Administration. We are expecting more action from Congress and the Administration to address other aspects of the coronavirus pandemic. Be sure to regularly check your email, NAHU’s social media channels and website for any updates. Should either the CDC or WHO guidance change, NAHU will act accordingly and immediately update you.

You can find links to pertinent information from WHO, CDC, the Department of Labor and CMS guidance on our website along with webinars and other resources from NAHU. We also encourage you to contact insurance carriers, check plan documents, state law, and consider the needs of your clients as coverage decisions are being made.


As a third-party Human Resources solution, we are committed to sharing information with you regarding the national Covid-19 crisis.   As you know, things have been rapidly changing and will continue to do so.  In an effort to avoid providing information that may be outdated as quickly as we send it, gente made a very conscious decision to hold off on communicating with each of you via email regarding the federal/state regulations as related to it.

While each member of our team continues to be committed to speaking to you directly regarding your questions and concerns, we’d like to provide you with website links that contain the most up-to-date information regarding the Coronavirus Relief Law, Small to Mid-Sized Business Tax Credit Information, considerations pertaining to the Department of Labor (DOL) as well as required federal postings that must be posted in each of your facilities.

We also would like to remind each of you to visit the your state’s websites for additional information as the requirements may vary from the Federal government.

As always,  the gente team is available to answer any questions and encourages you to contact us directly with any questions.    In the mean time, please see the below information for additional information.  We also encourage our clients to visit www.gente.solutions for information regarding these regulations.


Payroll Tax Credits

As noted in the attached link, “the U.S. Treasury Department, Internal Revenue Service (IRS), and the U.S. Department of Labor (Labor) announced that small and midsize employers can begin taking advantage of two new refundable payroll tax credits, designed to immediately and fully reimburse them, dollar-for-dollar, for the cost of providing Coronavirus-related leave to their employees. This relief to employees and small and midsize businesses is provided under the Families First Coronavirus Response Act (Act), signed by President Trump on March 18, 2020.”



Families First Coronavirus Response Act (FFCRA)

The Department of Labor (DOL) announced that the effective date of the leaves available through the Families First Coronavirus Response Act (FFCRA) will be April 1, 2020.

For additional information, please click into the below link.  This website contains responses to frequently asked questions as well general best business practices for employers as well as eligibility requirements for employees who feel they may qualify for benefits under this act.



Additionally, The DOL announced the effective date in a “Questions and Answers” document where it also provided answers to some common questions. Other than the April 1st effective date, the information is in line with what we have been advising. The DOL also released two Fact Sheets, both of which appear to contain the same information, but it’s possible they will each be updated in the future with information that is geared more toward employees or employers.


Federal Postings

The federal government is requiring that employers place posters regarding the CoronaVirus in their facilities.  The posters can be found in the attached link.  For those of you who have allowed your workforce to work from home, gente suggests that you send a copy of the posters to your group so they can access them until the return back to work


The Department of Labor has released employer posters for employee rights notification under the recently passed Families First Coronavirus Relief Act.

All private sector employers with fewer than 500 employees must post this notice by April 1st.

Click the link below to download the PDF.


IRS Issues Guidance on Tax Credits for Coronavirus Paid Leave

Small and midsize employers may begin using two new refundable payroll tax credits to obtain reimbursement for the costs of providing coronavirus-related leave to their employees, the U.S. Department of Labor (DOL) and Internal Revenue Service (IRS) announced on March 20, 2020.

This relief is provided under the Families First Coronavirus Response Act (the Act), which was enacted on March 18, 2020. The Act provides funds for employers with fewer than 500 employees to provide paid leave, either for their employees’ own health needs or to care for their family members. The Act aims to help employers keep workers on their payrolls while ensuring that workers are not forced to choose between their paychecks and the public health measures needed to combat the coronavirus (COVID-19).

This Compliance Bulletin provides the DOL and IRS’ guidance.

Employers should become familiar with their obligations to provide paid leave to employees under the Act and with the IRS’ guidance regarding tax credits for reimbursement. Employers should also monitor the IRS’  Coronavirus Tax Relief website for additional guidance, which is expected to be released in the near future, and:

  • Closely monitor the CDC, WHO and state and local public health department websites for information on the status of the coronavirus; and
  • Consider measures that can help prevent the spread of illness, such as allowing employees flexible work options  like working from home.  

Key Takeaways

Paid Sick Leave for Workers

  • – For COVID-19 related reasons, employees receive up to 80 hours of paid sick leave and expanded paid child care leave when employees’ children’s schools are closed or child care providers are unavailable.

Complete Coverage

  • – Employers may receive 100% reimbursement for paid leave under the Act.
  • – Health insurance costs are also included in the credit.
  • – Employers face no payroll tax liability.
  • – Self-employed individuals may receive an equivalent credit.

Fast Funds

  • – Reimbursement is intended to be quick and easy to obtain.
  • – An immediate dollar-for-dollar tax offset against payroll taxes will be provided.
  • – Where a refund is owed, the IRS intends to send the refund as quickly as possible.

Small Business Protection

  • – Employers with fewer than 50 employees may be eligible for an exemption from the requirements to provide leave to care for a child whose school is closed, or because child care is unavailable in cases, if viability of their business is threatened.

Easing Compliance

  • – Requirements subject to 30-day non-enforcement period for good faith compliance efforts.
  • – To take immediate advantage of the paid leave credits, businesses can retain and access funds that they would otherwise pay to the IRS in payroll taxes. If those amounts are not sufficient to cover the cost of paid leave, employers can seek an expedited advance from the IRS by submitting a streamlined claim form (which is expected to be released this week).


The Act provides paid sick leave and expanded family and medical leave for COVID-19 related reasons and creates the refundable paid sick leave credit and the paid child care leave credit for eligible employers. Eligible employers are businesses and tax-exempt organizations with fewer than 500 employees that are required to provide emergency paid sick leave and emergency paid family and medical leave under the Act. Eligible employers will be able to claim these credits based on qualifying leave they provide between the effective date and Dec. 31, 2020. Equivalent credits are available to self-employed individuals based on similar circumstances.

Paid Leave

The Act provides that employees of eligible employers can receive two weeks (up to 80 hours) of paid sick leave at 100% of the employee’s pay where the employee is unable to work because the employee is quarantined or experiencing COVID-19 symptoms and seeking a medical diagnosis. An employee who is unable to work because of a need to care for an individual subject to quarantine, to care for a child whose school is closed or child care provider is unavailable for reasons related to COVID-19, or if the employee is experiencing substantially similar conditions as specified by the U.S. Department of Health and Human Services can receive two weeks (up to 80 hours) of paid sick leave at two-thirds the employee’s pay. An employee who is unable to work due to a need to care for a child whose school is closed, or child care provider is unavailable for reasons related to COVID-19, may in some instances receive up to an additional 10 weeks of expanded paid family and medical leave at two-thirds of the employee’s pay.

Paid Sick Leave Credit

For an employee who is unable to work because of coronavirus quarantine or self-quarantine or has coronavirus symptoms and is seeking a medical diagnosis, eligible employers may receive a refundable sick leave credit for sick leave at the employee’s regular rate of pay, up to $511 per day and $5,110 in the aggregate, for a total of 10 days.

For an employee who is caring for someone with coronavirus, or is caring for a child because the child’s school or child care facility is closed, or for whom the child care provider is unavailable due to the coronavirus, eligible employers may claim a credit for two-thirds of the employee’s regular rate of pay, up to $200 per day and $2,000 in the aggregate, for up to 10 days. Eligible employers are entitled to an additional tax credit based on costs to maintain health insurance coverage for the eligible employee during the leave period.

Child Care Leave Credit

In addition to the sick leave credit, for an employee who is unable to work because of a need to care for a child whose school or child care facility is closed or whose child care provider is unavailable due to the coronavirus, eligible employers may receive a refundable child care leave credit. This credit is equal to two-thirds of the employee’s regular pay, capped at $200 per day or $10,000 in the aggregate. Up to 10 weeks of qualifying leave can be counted towards the child care leave credit. Eligible employers are entitled to an additional tax credit determined based on costs to maintain health insurance coverage for the eligible employee during the leave period.

Prompt Payment for the Cost of Providing Leave

When employers pay their employees, they are required to withhold from their employees’ paychecks federal income taxes and the employees’ share of Social Security and Medicare taxes. The employers then are required to deposit these federal taxes, along with their share of Social Security and Medicare taxes, with the IRS and file quarterly payroll tax returns (Form 941 series) with the IRS.

Under guidance expected to be released this week, eligible employers who pay qualifying sick or child care leave will be able to retain an amount of the payroll taxes equal to the amount of qualifying sick and child care leave that they paid, rather than deposit that amount with the IRS.

The payroll taxes that are available for retention include withheld federal income taxes, the employee share of Social Security and Medicare taxes, and the employer share of Social Security and Medicare taxes with respect to all employees.

If there are not sufficient payroll taxes to cover the cost of qualified sick and child care leave paid, employers may file a request for an accelerated payment from the IRS. The IRS expects to process these requests in two weeks or less. The details of this new, expedited procedure are expected to be announced this week.


If an eligible employer paid $5,000 in sick leave and is otherwise required to deposit $8,000 in payroll taxes, including taxes withheld from all its employees, the employer could use up to $5,000 of the $8,000 of taxes it was going to deposit for making qualified leave payments. The employer would only be required under the law to deposit the remaining $3,000 on its next regular deposit date.

If an eligible employer paid $10,000 in sick leave and was required to deposit $8,000 in taxes, the employer could use the entire $8,000 of taxes in order to make qualified leave payments and file a request for an accelerated credit for the remaining $2,000.

Equivalent child care leave and sick leave credit amounts are available to self-employed individuals under similar circumstances. These credits will be claimed on their income tax return and will reduce estimated tax payments.

Small Business Exemption

Employers with fewer than 50 employees may be eligible for an exemption from the leave requirements relating to school closings or child care unavailability where these requirements would jeopardize their businesses’ ability to continue. This exemption will be available in circumstances involving jeopardy to the viability of an employer’s business as a going concern. The DOL will provide emergency guidance and rulemaking to clearly articulate this standard.

Non-Enforcement Period

The DOL plans to issue a temporary non-enforcement policy that provides a time period for employers to come into compliance with the Act. Under this policy, the DOL will not bring an enforcement action against any employer for violations of the Act as long as the employer has acted reasonably and in good faith to comply with the Act. The DOL will instead focus on compliance assistance during the 30-day period.

More Information

For more information about these credits and other relief, visit Coronavirus Tax Relief on IRS.gov.

Source: Internal Revenue Service

New Jersey DOBI Enhances Telemedicine Requirements During COVID-19 Public Health Emergency

The New Jersey Department of Banking and Insurance has declared that insurers subject to their jurisdiction must, immediately, and for the duration of the public health emergency, offer enhanced telemedicine to subscribers at  no cost.

Now is a great time to make sure that you’re signed up for your carrier’s website, have downloaded their mobile application, and are familiar with their telemedicine offerings.

Text of the DOBI order follows, and the original can be read here.

Effective immediately and continuing for the duration of the state of emergency and public health emergency declared pursuant to EO 103, the Department is requiring that carriers:

  • – review their telemedicine and telehealth networks to ensure adequacy, given the apparent increased demand, as well as grant any requested in-plan exceptions for individuals to access out-of-network telehealth providers if network telehealth providers are not available, including, but not limited to, mental health and behavioral health providers, physical therapists, occupational therapists, and speech therapists, and any other health providers capable and authorized to provide telehealth or telemedicine services pursuant to State law or other State-issued guidance;
  • – cover, without cost-sharing (i.e., copayments, deductibles, or coinsurance), any healthcare services or supplies delivered or obtained via telemedicine or telehealth as required by P.L. 2020, c. 7;
  • – encourage their network providers to utilize telemedicine or telehealth services wherever possible and clinically appropriate in order to minimize exposure of provider staff and other patients to those who may have the COVID-19 virus;
  • – update their policies to include reimbursement for telehealth services that are provided by a provider in any manner that is practicable, including, if appropriate, and clinically appropriate, by telephone. Carriers should disseminate information on their website, or other reasonable means, to notify individuals of these updates. This would include the use of telephone-only communications to establish a physician-patient relationship and the expanded use of telehealth for the diagnosis, treatment, ordering of tests, and prescribing for all conditions. Carriers are required to update telehealth policies to include telephone- only services within the definition of telehealth;
  • – reimburse providers that deliver covered services to members via telemedicine or telehealth in accordance with P.L. 2020, c.3, and this guidance. Carriers may establish requirements for such telemedicine and/or telehealth services, in accordance with P.L. 2020, c.3, and guidance issued by the Department, including documentation and recordkeeping, but such requirements may not be more restrictive than those for in-person services. Carriers are not permitted to impose any specific requirements on the technologies used to deliver telemedicine and/or telehealth services (including any limitations on audio-only or live video technologies) during the state of emergency and public health emergency declared pursuant to EO 103;
  • – ensure that the rates of payment to in-network providers for services delivered via telemedicine or telehealth are not lower than the rates of payment established by the carrier for services delivered via traditional (i.e., in-person) methods, and carriers must notify providers of any instructions that are necessary to facilitate billing for such telehealth services.
  • – may not impose any restriction on the reimbursement for telehealth or telemedicine that requires that the provider who is delivering the services be licensed in a particular state, so long as the provider is in compliance with P.L. 2020, c.3 and c.4 and this guidance; and
  • – may not impose prior authorization requirements on medically-necessary treatment that is delivered via telemedicine or telehealth.

If you have any questions, please contact the Department’s Office of Life and Health at lifehealth@dobi.nj.gov.

Employer Considerations during the COVID-19 Outbreak

***What follows below is not legal advice, and should not be relied upon as such. All employers should consult with qualified counsel regarding these issues and their applicability to each unique set of circumstances. This is not exhaustive or comprehensive guidance.  We will continue to update this page throughout this process.***

Employers are facing many challenges as a result of the COVID-19 outbreak,   and the reduction of business and the impact that has on benefits programs should be considered.  

Employers maintaining operations as-is:  

  1. – Your benefits package continues as-is.

Employers deploying Work-From-Home (WFH) strategies:

  1. – Confirm that your Worker’s Compensation policy covers WFH.
  2. – Health and Welfare benefits continue uninterrupted.

Employers using furloughs:

A furlough is still an employed position, and can still maintain insurance eligibility. Check with your insurance carriers to see how they cover furloughed employees.  

    1. – If the carrier does not cover furloughed employees, this would be a “reduction in hours of service” that causes a loss of coverage under COBRA, and COBRA continuation would be available for groups subject to COBRA.
    2. – If the carrier does cover furloughed employees, consider how premium contributions will be collected if there are no wages.  Consider changing the contribution strategy for furloughed employees.

A best practice for a furloughed employee would be treat the period as if it were FMLA.  Determine which of the following strategies or combination of strategies that would best work for your employees:

        1. – Pay before you go – employees pay their premiums in advance of the furlough
        2. – Pay as you go – employees make contributions to the employer during the furlough
        3. – Pay when you get back – employees catch up their contributions upon returning to work full-time.

Employers terminating employees:

A termination of an employee affords the employee the opportunity to continue under COBRA if the group is subject to COBRA, or State Continuation depending on state rules.   Employers are advised to consult with their carrier for guidance on state continuation practices as they affect their populations.

Employers have the ability to subsidize COBRA continuation for employees, but should keep in mind that an employee who elects COBRA continuation will not be eligible to enroll in individual coverage under normal rules until the COBRA coverage period has expired, or an open enrollment occurs.  What this means in practice is that an employee who takes an employer subsidy for the first few months of COBRA, but then drops COBRA when the subsidy ends is unable to enroll in individual coverage at that time, unless there has been a separate qualifying event that would entitle them to a Special Enrollment Period or an Open Enrollment.  

Employers should be very clear about this possibility when offering COBRA subsidies.

If the employer terminates the plan entirely, COBRA coverage terminates as well.  State continuation rules may differ, and in NJ, state continuation may continue even if the plan is terminated.  Employers should consult with their insurance carriers and brokers if they are considering a total plan termination.

Commuter Benefits

Commuter benefits can only be used to pay for expenses to commute to and from work.  If your office is closed, and your employees are working from home, they cannot expense there are no commuting expenses to reimburse. In this case, contributions should be reviewed as the monthly limits for these benefits could mean that the employee is not able to be reimbursed for the dollars contributed without a future reduction in contribution to offset the program. If an employee is terminated, any funds remaining in the account after any run-out claims are processed are forfeited.

Dependent Care

Dependent Care expenses are similar to Commuter benefits, in that they are very likely reduced during this period.  The IRS allows for a prospective election change based on a change in the cost of care.  If an employee’s circumstances reflect a change in the cost of care, they can and should consider changing their election to avoid an over-contribution.  If an employee is terminated, any funds remaining in the account after any run-out claims are processed are forfeited.

Flexible Spending Accounts

If an employee remains eligible for the FSA, their FSA contributions and expenses remain the same as they were before the COVID-19 outbreak. There is nothing in the regulations that would allow a change as a result of working from home.  If the employee is no longer eligible for the FSA due to a reduction in hours or termination, they would be subject to FSA COBRA.

An FSA is subject to COBRA if the group is subject to COBRA, and if, at the time of termination, the employee has contributed more than they’ve spent.  If that is the case, they can continue the plan with their full maximum election through the end of the plan year as long as they elect COBRA continuation and make their regular contribution as a COBRA premium equivalent.  If the employee has spent more than they have contributed at the time of termination, there is no continuation afforded.

Health Reimbursement Arrangements

HRAs are not subject to state continuation, but they are subject to COBRA as a self-funded health plan.  While COBRA sets the floor of the minimum benefits that must be offered to qualified beneficiaries, employers can provide more generous continuation, even if the employer is not subject to

Family Medical Leave

Employers and employees alike may ask if they are eligible for any leave protections in the event they or a family member gets sick.  While gente encourages a deeper dive into an employer’s requirements per state, the federal government has provided the following guidance.  Please reference the following link for additional information.  Before offering information to your employees a great business practice is to partner with your site human resources practitioner for additional information.


Reduction in Force

Employers are cautioned that there are other employment laws they must consider before making a reduction in force.  For example the federal government has Worker Adjustment and Retraining Notification (WARN) protections in place and New Jersey’s Warn Act has different regulations than that of the Federal government.  For additional information regarding both federal and state WARN, please reference the attached website and always partner with your Human Resources provider.  (Each state may have specific requirements and it is for this reason that readers are also encouraged to do additional fact findingabout their state regulations before making these tough decisions). 

Federal Government Resources on Layoffs and the WARN Act – https://www.dol.gov/agencies/eta/layoffs/warn

Unemployment Compensation

Federal unemployment provisions have been modified to address situations where individuals may not be able to work due to impact of Covid-19.  There are several scenarios where employees may be eligible for unemployment and gente encourages that employers access the following link for additional information.  We would also encourage that you visit your respective states as each state may have varying stipulations.


Occupational Safety and Health Act of 1970

Under the federal Occupational Safety and Health Act of 1970 (the OSH Act), employers have a general duty to provide employees with safe workplace conditions that are “free from recognized hazards that are causing or are likely to cause death or serious physical harm.” Workers also have the right to receive information and training about workplace hazards, and to exercise their rights as employees without retaliation.

There is no specific Occupational Safety and Health Administration (OSHA) standard covering COVID-19. However, some OSHA requirements may apply to preventing occupational exposure to COVID-19. In addition to the General Duty clause, OSHA’s Personal Protective Equipment (PPE) standards and Bloodborne Pathogens standard may apply to certain workplaces, such as those in the healthcare industry.

Employers should continue to monitor the development of COVID-19 and analyze whether employees could be at risk of exposure. It is also important for employers to consider what preventative measures they can take to maintain safety and protect their employees from potentially contracting COVID-19.

Also, OSHA requires many employers to record certain work-related injuries and illnesses on their OSHA Form 300 (OSHA Log of Work-Related Injuries and Illnesses). OSHA has determined that COVID-19 is a recordable illness when a worker is infected on the job. Establishments that are required to complete an OSHA 300 log should be sure to include all COVID-19 infections that are work related.

The Americans with Disabilities Act­­­

The Americans with Disabilities Act (“ADA”) protects applicants and employees from disability discrimination. It is relevant to COVID-19 because it prohibits employee disability-related inquiries or medical examinations unless:

  • – They are job related and consistent with business necessity; or
  • – The employer has a reasonable belief that the employee poses a direct threat to the health or safety of him-or herself or others (i.e., a significant risk of substantial harm even with reasonable accommodation).

According to the Equal Employment Opportunity Commission (EEOC), whether a particular outbreak rises to the level of a “direct threat” depends on the severity of the illness. Employers are expected to make their best efforts to obtain public health advice that is contemporaneous and appropriate for their location, and to make reasonable assessments of conditions in their workplace based on this information.

The EEOC has said that sending an employee home who displays symptoms of contagious illness would not violate the ADA’s restrictions on disability-related actions because advising such workers to go home is not a disability-related action if the illness ends up being mild, such as a seasonal influenza. On the other hand, if the illness were serious enough, the action would be permitted under the ADA as the illness would pose a “direct threat.” In either case, an employer may send employees home, or allow employees to work from home, if they are displaying symptoms of contagious illness.

The ADA requires that information about the medical condition or history of an employee, obtained through disability-related inquiries or medical examination, be collected and maintained on separate forms and in separate medical files and treated as a confidential medical record. Employers should refrain from announcing to employees that a coworker is at risk of or actually has a disease. Instead, employers should focus on educating employees on best practices for illness prevention.

Employee Leave Requirements

If an employee, or an employee’s family member, contracts COVID-19, the employee may be entitled to time off from work under federal or state leave laws. For example, an employee who is experiencing a serious health condition or who requires time to care for a family member with such a condition may be entitled to take leave under the Family and Medical Leave Act (FMLA). An illness like COVID-19 may qualify as a serious health condition under the FMLA if it involves inpatient care or continuing treatment by a health care provider. Employees may also be entitled to FMLA leave when taking time off for medical examinations to determine whether a serious health condition exists.

Many states and localities also have employee leave laws that could apply in a situation where the employee or family member contracts COVID-19. Some of these laws require employees to be given paid time off, while other laws require unpaid leave. Employers should become familiar with the laws in their jurisdiction to ensure that they are compliant.

Some employees may wish to stay home from work out of fear of becoming ill. Whether employers must accommodate these requests will depend on whether there is evidence that the employee may be at risk of contracting the disease. A refusal to work may violate an employer’s attendance policy, but employers should consult with legal counsel prior to disciplining such an employee. However, if there is no reasonable basis to believe that the employee will be exposed to the illness at work, the employee may not have to be paid for any time that is missed.

Compensation and Benefits

If employees miss work due to COVID-19, whether they are compensated for their time off will depend on the circumstances. As noted above, employees may be entitled to paid time off under certain state laws if they (or a family member) contract the illness. In other cases, non-exempt employees generally do not have to be paid for time they are not working. Exempt employees must be paid if they work for part of a workweek, but do not have to be paid if they are off work for the entire week. Note that special rules may apply to union employees, depending on the terms of their collective bargaining agreement.

Employees may be entitled to workers’ compensation benefits if they contract the disease during the course of their employment. For example, employees in the healthcare industry may contract the disease from a patient who is ill. Whether an employee is eligible for other benefits, such as short-term disability benefits, will depend on the terms of the policy and the severity of the employee’s illness.

Communicating with Employees

As part of their efforts to prevent the spread of COVID-19 in the workplace, employers should consider communicating information about the illness to employees. The CDC, WHO and OSHA have all created informational material on the virus and its symptoms, prevention and treatment that can be helpful for employees.

NJ DOL Infographic: COVID-19 Scenarios and Benefits Available

Families First Coronavirus Response Act Passed into Law

National Association of Health Underwriters
Today the Senate passed the Families First Coronavirus Response Act, and President Trump is expected to sign the bill shortly. The Act includes several provisions to protect American workers and assist employers in providing emergency paid sick leave, as well as paid family leave in the case of school closures, for working families impacted by COVID-19.

The FFCRA requires employers with up to 500 employees to provide paid sick leave and paid family leave while providing a refundable payroll tax credit to employers to cover 100% of the cost of wages. There is also a refundable income tax credit made available for self-employed individuals. Employers with less than 50 employees must apply for a hardship exemption in order to qualify.
Employers must offer two weeks (10 days) of paid sick leave for COVID-19-related reasons (existing leave offered can count toward the 10 days). If the sick leave is for an employee who is sick or seeking a diagnosis, the benefit must replace all of the employee’s wages up to a maximum benefit of $511 per day. If an employee is caring for another individual who is sick, the benefit must replace at least two-thirds of the employee’s wages up to a maximum benefit of $200 per day. The paid sick leave credit offsets 100% of employer costs for providing mandated paid sick leave. The credit also offsets, uncapped, the employer contribution for health insurance premiums for the employee for the period of leave.
Employers must offer 12 weeks of paid family leave for employees who have been employed for at least 30 days with a minor child in the event of the closure of the child’s school or place of care. The first 10 days are unpaid, but the employee can overlap this with the 10 days of paid sick leave. This benefit must replace at least two-thirds of the employee’s wages up to a maximum of $200 per day. The paid family leave credit offsets 100% of employer costs for providing mandated paid family leave. The credit also offsets, uncapped, the employer contribution for health insurance premiums for the employee for the period of leave.
Under FFCRA, self-employed individuals are provided similar credits as refundable income tax credits in an amount of what self-employed workers would have received if they had been an employee receiving paid leave benefits pursuant to the mandates. For a given day that a self-employed worker could not work, they can claim a “rough justice” tax credit in the amount of their average daily self-employment income for the year.
This action taken by Congress follows several pieces of emergency guidance released by the Trump Administration. We are expecting more action from Congress and the Administration to address other aspects of the coronavirus pandemic. Be sure to regularly check your email, NAHU’s social media channels and website for any updates. Should CDC or WHO guidance change, NAHU will act accordingly and immediately update you. You can find links to pertinent information from WHO, CDC the Department of Labor and CMS on our website. We also encourage you to contact insurance carriers, check plan documents and state law, and consider the needs of your clients as coverage decisions are being made.

Cyber Criminals Seeking to Capitalize on Coronavirus


Criminals prey on unfortunate circumstances, seeking to capitalize on victims during times of panic and hardship. Unfortunately, the coronavirus disease 2019 (COVID-19) pandemic is no exception.

The Cybersecurity and Infrastructure Security Agency (CISA), part of the U.S. Department of Homeland Security, told individuals to be vigilant about scams related to COVID-19.

Cyber criminals have been known to pose as charities or legitimate websites to lure victims into sending money or revealing personal information. Individuals should scrutinize any email, text or social media post related to COVID-19 and be cautious when clicking any links or attachments.

CISA offered specific guidelines for individuals to avoid being scammed online:

  • – Avoid clicking links from unsolicited emails, and be wary of email attachments.
  • – Use trusted sources when looking for factual information on COVID– 19, such as .gov.
  • – Never give out personal or financial information via email, even if the sender seems legitimate.
  • – Never respond to emails soliciting personal or financial information.
  • – Verify a charity’s authenticity before making any donations.

It’s not always easy to disregard messages from senders that seem reputable, like banks. If individuals have any doubts about an email from a seemingly legitimate source, they should navigate to the organization’s website and use the contact information there to reach out. Individuals should never respond to the initial message.

 If individuals have any doubts about a message’s sender, links or attachments, they shouldn’t click anything in the message.

What Can Employers Do?

Employers should consider notifying employees about the existence of these COVID-19 cyber scams. Especially during times of crisis, scammers will pose as reputable sources and use fear to solicit personal information. Employers should also communicate best practices so employees know how to respond to such solicitations.

It may also benefit employers to back up data and bolster network protections in case an employee clicks the wrong link and compromises the entire system.