Washington at Impasse on Next COVID-19 Relief Bill

This law requires, among other things, that group health plans cover COVID-19 testing and related provider visits with no out-of-pocket costs.

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After Senate Republicans failed to reach a deal with the House, Congressional Democrats and the Treasury Secretary tried but failed to broker an agreement to extend unemployment benefits and other aid for those affected by the pandemic. Following the impasse, President Trump issued executive orders to defer payroll taxes for the rest of the year and provide $400 per week in supplemental emergency unemployment benefits for those losing jobs due to the pandemic, but the executive orders and the future of the next round of COVID-19 relief remain uncertain. However, given the resurgence of cases and the lingering impacts of the pandemic on unemployment and the economy, it is very likely that Congress and the Administration will extend unemployment benefits and aid to small employers in some way before the end of the year. There may also be provisions extending the easing of rules for telehealth and health savings accounts (HSAs) since both sides support them.

Democrats initially proposed $3.4 trillion in overall aid, and the Republicans’ package offered $1 trillion in relief. Negotiators failed to settle on an amount that all parties could agree on. Besides the overall size of the package, the major areas of disagreement centered on the details of extension of unemployment benefits, aid for state and local governments and liability protections from pandemic-related lawsuits.

Following the passage of the Families First Coronavirus Response Act and the CARES Act earlier this year, House Democrats passed an additional relief bill entitled the HEROES Act in May. The Republican Senate leadership outlined provisions in the HEALS Act, in July. Both were starting points for negotiating a compromise in Congress. A brief comparison of major provisions that affect employers is in Table 1 below.

Provisions in both proposals would directly impact employers including more flexibility for telehealth and health accounts, unemployment benefits and aid to employers. Differences include House provisions for COBRA subsidies, additional COVID-19 coverage requirements and extension of emergency paid leave benefits. The Senate proposal includes broad liability protections against COVID-19- related lawsuits that would also protect employers.

Business Group on Health Action

Following our earlier letter to Congress with recommendations for COVID-19 relief, Business Group on Health sent a second letter that, among other things, asks Congress to include:

  • A permanent relaxing of the rules for coverage of telehealth prior to meeting the HSA deductible, as well as extending these more relaxed rules to other services (the Senate outline extends telehealth HSA flexibility for a year);
  • Funding for COVID-19 testing, including for the workplace (the House bill provides additional funding for testing);
  • Permitting the carryforward of remaining 2020 flexible spending account (FSA) balances to 2021 (the Senate outline includes this provision); and
  • Providing 100% federal subsidy for COBRA coverage (the House bill incudes this provision). Business Group on Health also calls for provisions to cap employer costs for COBRA.

Employer Impact

Given the impasse, aid to employees and employers available through earlier legislation will expire soon, adversely impacting those who are relying upon it. In addition, temporary plan changes for telehealth and health accounts will expire unless Congress acts to extend them or make them permanent; expiration of these benefits would jeopardize access to virtual care and make it more costly for people with HSAs to access care. Finally, without additional action and funding by Congress for a more vigorous public health response, including for testing, it will take longer for the economy to recover from the effects of the pandemic.

What’s Next?

Given that it is an election year and many unemployed people as well as businesses are relying on additional aid, public pressure may force Congress and the Administration back to the negotiating table. Since Congress has gone on August recess, attempts to reach a compromise may not resume until September.

If you have questions, comments, or concerns please contact us.

We provide this material for informational purposes only; it is not a substitute for legal advice.

Provision

FFCRA/CARES Act (Enacted)

HEROES Act (Democratic House Bill)

HEALS Act (Senate Republican Leadership Outline)

COVID-19 Coverage

Requires coverage of COVID-19 testing and vaccines with no cost sharing, including HSAs.

Would extend requirement to COVID-19 treatment.

No provision

Telehealth

Waives requirement to meet HSA deductible prior to receiving telehealth benefits without paying full cost through 2020.

Would require no cost sharing for COVID-19 treatment through telehealth.

Would extend HSA waiver through 2021 or the duration of the emergency. Would also permit offering telehealth outside health plan to part-time employees and employees not eligible for their employer’s coverage.

Paid Leave

Provides emergency paid sick and family leave benefits to small employers to December 2020.

Would extend the requirement through December 2021 and extend to large employers.

No provision

On-site Clinics

No provision

No provision

Would allow employees to receive care at on-site clinics without full cost prior to HSA deductible through 2021.

FSAs

Permits coverage of OTC medications by health FSAs

Would allow anyone becoming unemployed during 2020 to continue to use their health FSA for qualified health care reimbursement.

Would allow unlimited health and dependent care FSA rollovers to 2021.

Surprise Billing

No provision

Would prohibit health care providers who accept relief funds from balance billing patients for services related to diagnosis or treatment of COVID-19 in emergencies or at in-network facilities for the duration of the public health emergency.

No provision

COBRA

No provision

Would provide 100% federal subsidies for those losing jobs due to pandemic through January 2021.

No provision

Lower-Income and Unemployment Aid

$1200 stimulus checks for those with low- to- moderate incomes. $600 per week federal supplement to state unemployment through July. Creates eligibility for state unemployment benefits to gig, part-time and self-employed workers and independent contractors through January 2021.

Would provide additional $1200 stimulus check. Would extend through December and extend expanded eligibility through March 2021.

Would provide additional $1200 stimulus check. Would provide $200 per week federal supplement to state unemployment benefits through September, smaller amount through December.

Payroll Tax Relief

Limited payroll tax credit/payroll tax deferral for employers impacted by pandemic (50% of qualified wages to $5000 cap) through December 2020. Employers electing are ineligible for Paycheck Protection Program (PPP loans).

Would expand payroll tax credit to 80% of qualified wages up to $36,000 cap. Employers electing would also be eligible for PPP loans.

Would expand payroll tax credit to 65% of eligible wages up to $30,000 cap. Employers electing would also be eligible for PPP loans. Would create payroll tax credits associated with personal protective equipment (PPE) and other measures for workplace safety.

Employer Aid

PPP offers government loans/grants to small employers for payroll support, paid sick leave, insurance premiums, mortgage, rent and utilities. Loan forgiveness available if employers maintain employees on staff and continue paying their wages over an 8-week period.

Would expand loan amounts and loan forgiveness for PPP funds. Would provide additional funds for PPP loans.

Would expand loan amounts and forgiveness for PPP funds. Provides no additional PPP funding.

Liability Protections

No provision

No provision

Would provide broad protections against abusive lawsuits related to COVID-19 testing and workplace safety through October 2024.

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TABLE OF CONTENTS

  1. Business Group on Health Action
  2. Employer Impact
  3. What's Next?