What the CARES and Families First Acts Mean for Benefits Professionals

With COVID-19 infections still on the rise in many parts of the world, benefits teams are prepping for new rules, regulations, and compliance protocols. Congress has passed the first coronavirus relief measures, and experts are expecting more legislation in the near future to help families, businesses, and the economy recover from the pandemic. Through loan programs, unemployment benefits, and health coverage guarantees, there are a lot of compliance issues facing benefits leaders. 

In this week’s blog post, we’ll explore the Families First Act, which addresses many questions around cost and coverage for members, and the CARES Act, a record-setting $2.2 trillion dollar relief bill. Let’s dive in. 

The Families First Act 

This law is primarily focused on how healthcare should be delivered to Americans during the COVID-19 outbreak. It deals with the mechanics of seeking care, such as plan coverage, prescription coverage, and other means of ensuring everyone who needs testing or care can get it without financial penalties. Here are some highlights. 

All plans must cover COVID-19 testing. 

The law requires that all plans, whether they’re fully insured or self-insured, cover COVID-19 testing with no out-of-pocket costs for patients. Plans also must cover any visits associated with COVID-19 testing, so if a member on your plan first seeks care at a primary care provider or emergency room before getting tested, the out-of-pocket costs for the visit must be waived. This provision is clearly meant to ensure that anyone who needs care should have open access to it for the health of their community. The federal government is trying to make it as easy as possible for anyone to get tested, even those who may otherwise not seek treatment due to the cost. 

This provision of the Families First Act applies to all FDA-approved tests right now, but has language to include newly available tests in the future. You may have seen some news stories about at-home COVID-19 test and antibody kits. While some are legitimate, many have pulled kits from the market after FDA warnings about fraudulent kits. Benefits teams should let members know that at-home kits are not approved, covered on their plans, or reliable.

Physician’s orders are up to the plan. 

As of this writing, the legislation has left it up to individual plans to decide whether or not to require a doctor’s order to proceed with COVID-19 testing. With access to tests and materials still an ongoing issue in many places around the country, this makes sense. If anyone who wanted to be tested (with or without symptoms) was able to do so, the already limited resources would be stretched even thinner. Many plans and benefits leaders are requiring a doctor’s order to receive a COVID-19 test. 

Expansion of HSA + HDHP eligible programs. 

The law also allows HSA dollars paired with high-deductible health plans to be used for additional services and programs that weren’t allowed previously. This includes a few programs: 

• Pre-deductible coverage for telehealth visits (through Dec. 2021) 
• Over the counter drugs without a prescription (can be permanent) 
• Menstrual care products (can be permanent) 

These are all left up to the employer/plan, but many benefits leaders are considering expanding these offerings to employees now that it’s legal.

With new, highly publicized laws like the Families First Act, it’s crucial for benefits teams to keep employees and their families informed. You want your members to understand how to access care safely, where and when to get tested, and how their coverage will work on your plan. Plan documents sent out by carriers are a good first step, but many members won’t read or fully understand them. Make sure you’re providing the “Healthcare 101” info for employees, too. 

The CARES Act 

This legislation is aimed to help businesses retain employees and avoid layoffs. Benefits leaders and advisors are both on the forefront of employee retention efforts, so they will likely have a seat at the table as decisions are being made around how to utilize the CARES Act. Here are some provisions to consider: 

Tax relief for businesses of all sizes. 

A fully refundable tax credit is available that covers 50% of payroll on the first $10,000 of total compensation (including benefits). The idea is to get employees who were downsized or on unpaid furlough back on the payroll. This will not only help businesses pay employees, but will also relieve the burden on the unemployment system at a time when claims are rising each week. Smaller employers will also benefit from changes to expenses and deductions that will help them retain staff. 

Additionally, a provision in the CARES Act allows all employers to defer payment of Social Security taxes until the end of 2020. 

Aid for certain industries. 

The CARES Act sets aside $454 billion in aid for large employers in hard-hit industries, like airlines, air cargo, national security, and others. Benefits professionals in these industries may be tapped to show the impact of COVID-19 on their employee population and the business as a whole. In order to access this relief fund, these businesses must also be domiciled in the U.S. and a majority of their employees must be based in the U.S. They also must retain these employees to get the aid packages. Benefits data analytics will be key in proving eligibility for this relief. 

The healthcare industry is also getting a helping hand from the CARES Act. $150 billion in emergency appropriations is included in the legislation. It’s designed to help with compensation for staff, purchasing personal protective equipment (PPE) and other needed medical devices during the crisis, research and diagnostics (for the eventual vaccine), lost revenue due to cancelled elective procedures, and support for the Veterans Administration hospitals, which offer crucial backup for the civilian healthcare system. 

Small business aid. 

Aid for small businesses falls into the same rough categories as the provisions for large employers, with one notable exception: direct, forgivable loans. Companies with fewer than 500 employees can apply for loans to help with payroll, paid sick leave, rent, utilities, insurance premiums, and other expenses. If successful in seeking a loan, these employers can have it forgiven for any portion used for payroll, rent/mortgage, and existing debt as long as they keep employees on the payroll through the end of June. 

The hospitality and restaurant industries are the likely recipients of this aid, and the CARES Act reflects Congress’ hope that we may be able to dine out or travel again this summer. If the spread of coronavirus continues longer than expected, Congress may pass additional legislation to help these industries. However, other businesses can also apply for the small business loans, including contractors and the self-employed. 

Unemployment expansion. 

With the CARES Act expanding unemployment to self-employed, newly-employed, contractors, and more, the unemployment system is going to be under strain. Additionally, most out-of-work Americans will receive their full salaries plus $600 per week to help them ride out the pandemic. Usually there is a waiting period for state unemployment benefits, but the bill dictates that the federal government will cover the first week’s check. It also adds 13 additional weeks of benefits to the program, and these provisions all go through December 2020. 

Other relief programs.

The CARES Act provides a few more “miscellaneous” options for COVID-19 financial relief as well: 

• Loan repayment forgiveness
• A one-time stimulus check that varies based on income 
• 401k or IRA withdrawals without tax penalties 
• Deferral of student loan payments (or employer-provided student loan payments through employee education programs) 
• Mandated 100% coverage of a future COVID-19 vaccine by all health plans with no cost sharing

In addition to the Families First Act and CARES Act, the Federal Reserve has also announced a "Main Street Lending Program," aimed at helping small and mid-sized businesses.

This is not an exhaustive list of changes, but it’s a good start for the pieces of the law that may affect benefits teams and their advisors. We’ve been following updates from Health Affairs and the Business Group on Health for great information, too. Relying on advisors like brokers and consultants is a good way to stay ahead of legislative changes that will result from the coronavirus pandemic.

Want to learn more about how data can help you respond to the COVID-19 pandemic? Check out our regularly updated COVID-19 Resource Center.