Senate GOP Unveils Coronavirus Relief Package; Formal Talks Begin 

Jul 30 2020

Senate Republicans unveiled their plan this week for a roughly $1 trillion coronavirus aid package with relatively few health policy provisions compared to the $3.5 trillion HEROES Act (HR 6800) passed by the House in May. The legislation serves as the GOP’s opening bid in negotiations with Democrats, who have rejected the measure; however, an array of health care provisions – many contained in the HEROES Act– remain in play as leaders hope to get a final deal passed by the end of next week, before the scheduled August recess.

Healthcare and workplace provisions in the Senate Republican proposal would:

  • Permit individuals with health and dependent care FSAs to carry over their full balances from 2020 to 2021. A substantially similar provision is included in the HEROES Act.
  • Amplifies and codifies existing COVID-19 guidance by allowing large employers to offer standalone telehealth and other remote care services as a modified excepted benefit, thus avoiding many ACA mandates, to employees who are not eligible for their employer’s group health plan coverage. This provision expires for plan years beginning on or after January 1, 2022, or plan years beginning on or after the date the public health emergency ends, whichever is later.
  • Permit individuals to receive care from an employer on-site clinic that provides a variety of specified medical items and services (including management of chronic conditions or diseases, preventive care for chronic conditions as specified in 2019 IRS guidance, and testing, vaccines and treatment for COVID-19) without jeopardizing their eligibility to contribute to a HSA. This provision would expire on December 31, 2021.
  • Provide a refundable “Safe and Healthy Workplace” tax credit for employers equal to 50% of employer’s: (i) “qualified employee protection expenses” including testing for COVID-19, personal protective equipment, and cleaning supplies, (ii) “qualified workplace reconfiguration expenses” including modifications to workspaces for the purpose of protecting employees and customers from the spread of COVID-19, and (iii) “qualified workplace technology expenses” including contactless point-of-sale systems and other technology to track employee interactions with customers.
  • Increase the existing employee hiring and retention payroll tax credit that applies to wages and employer costs for health care, retirement and leave benefits to 65% from 50%. The provision clarifies that group health plan expenses are qualified wages even when no other wages are paid to the employee (furloughed employees).

In addition, the legislation shields employers from “coronavirus exposure action” claims through Oct. 1, 2024, if they make “reasonable efforts” to comply with public health guidelines and don’t engage in “gross negligence or willful misconduct”.

Not included in the Senate measure are counterparts to key HEROES Act provisions including fully subsidized COBRA continuation coverage, a requirement that health plans cover COVID-19 treatment without cost-sharing, or financial aid to protect sponsors of self-funded health plans from surges in COVID-19 related claims costs. These issues and others, however – such as stopping surprise medical bills – will be subject to negotiations on a final package.

Those negotiations look set to take longer than negotiators want. The two parties appear miles apart on extending federal jobless benefits that expire this week and other major policy matters.

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Dorian Smith
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