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The Families First Coronavirus Response Act and Short-Term Disability Benefits: When Is an Employee Eligible for a Benefit?

The Families First Corona Response Act (FFCRA) was signed law into on March 18, 2020 and goes into effect on April 1, 2020. It is unusual for a law to go into effect just 2 weeks after it was signed into law, however, the current circumstances are such that the government is acting quickly to provide assistance for employees in need. The law applies to employers with fewer than 500 employees. The Department of Labor released guidance earlier this week.

One of the key components of the Act is the requirement for employers to provide up to 80 hours of paid sick leave for an employee who is unable to perform their work (onsite or remotely) for a number of reasons related to COVID-19. This advisory focuses on only one of those reasons, when the employee is unable to work as a result of their own symptoms of COVID-19. When the symptoms of COVID-19 prevent an employee from being able to perform the duties of their job, the employee may meet the qualification requirements for both the Act’s paid sick leave benefit and the employer’s group Short-Term Disability (STD) plan. It is important to note that although the employee may qualify for both, they are not able to collect both at the same time*. The Act’s paid sick leave benefits would pay first. Once these benefits are exhausted, the group STD plan benefits would begin to pay, if applicable.

Below are some important factors to keep in mind:

  • The benefit payable under FFCRA is equal to the employee’s regular full pay up to $511 per day. This amount is higher than the maximum benefit payable under most STD plans.

  • The benefits paid under FFCRA are immediate; there is no waiting period/elimination period.

  • Most STD plans have a 7-14 day elimination period. Benefits under the act would overlap by only one week or less, if applicable.

  • For STD benefits to begin, the covered employee must have a loss, or decrease, of income. If the employer is still paying the employee as they would under the Act, there is no loss of income and the employee will not qualify for disability benefits until they have this loss.

  • Some policies do not offset for sick pay and/or salary continuation paid by the employer. In general, these policies still feature a 100% maximum rule meaning the combination of earnings from these sources, plus the STD benefit, is not to exceed 100% of pre-disability earnings.

  • If the employee is still unable to work once the Act’s paid sick leave benefits are exhausted, the STD benefits would begin to pay at the amount specified by the STD policy.

*In the case of a STD benefit that exceeds $2,550 per week, it may be possible for the STD benefit to supplement COVID-19 paid sick leave benefits.

If you have an employee that qualifies for this benefit under the Act, we still recommend filing the disability claim with the STD insurer at the onset of the disability. This will ensure timely processing of the claim and expedite benefit payments for your employee.

For more information on evolving regulatory regulations the wake of the COVID-19 pandemic, visit the OneDigital Coronavirus Advisory Hub, or reach out to your local OneDigital advisory team.