Federal coronavirus relief law provides free testing, paid leave, and additional food assistance

President Trump signed into law Thursday an emergency relief bill to bolster the federal government’s response to the coronavirus pandemic.

The Families First Coronavirus Response Act ensures that testing for COVID-19 will be free for all Americans. The law also supports families by boosting food assistance programs, providing additional funding for state government response, and creating an emergency paid leave program.

Here are the details:

Free testing for coronavirus

The act requires private insurers to waive any copays, deductibles, or other out-of-pocket expenses associated with a test for COVID-19. Maine’s Bureau of Insurance already announced a similar provision under its emergency powers. The act also eliminates any costs for testing in the federal health care programs, including Medicare, Medicaid (MaineCare), the Veterans’ Administration, military health care, and the Indian Health Service. Finally, the act provides funding to ensure that uninsured individuals can also be tested for free, with the federal government reimbursing providers for the cost.

These provisions apply to the tests themselves, as well as other diagnostic tests that might be run as part of a visit to the doctor which results in a COVID-19 test.

Paid leave

As businesses close their doors or reduce their hours, many workers are being sent home when they’d normally be working. At the same time, workers at businesses that remain open are being instructed to stay home if they feel sick, while others are having to reduce their hours to care for children in the wake of school and daycare closures.

All of these scenarios add up to a loss of income for working families. The Families First Coronavirus Response Act provides several ways for workers who are facing a loss of income to get help.

The law creates two new temporary programs to allow some workers to take paid leave during the outbreak:

  • a short-term sick leave program to provide up to 10 days of paid leave, with full wage replacement for workers who are sick and at least two-thirds wage replacement for those caring for a sick family member; and
  • a longer-term family and medical leave program to provide up to 12 weeks of paid leave at at least two-thirds wage replacement, up to $200 per day.

Both paid leave programs must begin no later than April 3. While these paid leave programs will help many Americans make ends meet, not all workers will be eligible for benefits. All public-sector workers and most workers at private companies with fewer than 500 employees will be covered, but workers at private companies with more than 500 employees — which employ more than half of Americans and 42 percent of Mainers[1] — are exempt from the paid leave provisions of the law.

Employers in the health care industry are also exempt from the paid leave program. And private-sector employers with fewer than 50 employees can apply to the US Department of Labor for an exemption from the requirement to grant paid leave if they can demonstrate that it will cause them real economic harm.

Workers should note that the first 10 days of family and medical leave are unpaid. However, sick leave benefits may be used during that period.

Companies must continue to offer health insurance to employees on family and medical leave. Employers covered by the law will receive a tax credit equal to the amount spent on paying their employees during sick time or paid leave, as well as the cost of maintaining health insurance benefits. Self-employed workers are eligible for a federal tax credit to cover the cost of paid leave.

Both forms of leave expire at the end of 2020 or the end of the national emergency, whichever comes first. Any unused leave will expire and cannot be used later.

Greater funding for unemployment benefits

The law also appropriates up to $1 billion in funding to states for the Unemployment Insurance program. This is especially important for Maine, which this week broadened eligibility for Unemployment benefits during the outbreak.

In addition to immediate one-time funding, the law also allows states to extend unemployment benefits to 52 weeks instead of the traditional 26, with the federal government covering the full cost of these additional weeks. The extended benefits period is only triggered once unemployment application levels rise significantly above their typical rate.

Food assistance for Maine families

The law contains several provisions to support Mainers who may be at risk of food insecurity during this extraordinary time. This includes:

  • $500 million for the Women, Infants and Children (WIC) program, which provides money to new mothers and their children to purchase nutritious food.
  • $400 million for the Commodity Assistance Program, through which the federal government purchases food to send to food banks across the country.
  • $250 million for the Meals on Wheels program which delivers food to the homes of seniors with low incomes.

The law also reduces barriers families face in accessing food assistance, to help ensure all families can get the support they need if they are struggling to meet their nutritional needs during this crisis.

The law temporarily removes work requirement for adults without children who receive food assistance through the Supplemental Nutrition Assistance Program, or SNAP. In the best of times, the work requirement needlessly takes food away from Mainers who cannot find work. Removing this barrier is smart policy and should remain in effect even after the coronavirus pandemic subsides.

The law also ensures families with children who normally receive free lunches at school continue to receive food assistance while schools are closed and allows states to apply for more federal funding to increase SNAP benefits to households and to waive certain application procedures during the outbreak.

Increased investment in health care

The law contains two major forms of support for state governments, which are facing additional demand for safety net programs and a loss of tax revenue as incomes and spending fall.

The law increases the federal government’s share of spending in the Medicaid program (known in Maine as MaineCare), which provides health insurance to individuals and families with low incomes.

For the remainder of this federal fiscal year (which ends in September), the federal government will pay 70 percent of the costs for most people in the MaineCare program, up from 63.8 percent. In the next fiscal year, the match will decrease to 69.89 percent. For the newly eligible group of low-income Mainers without children who were part of the state’s Medicaid expansion policy, the federal government will cover 96.2 percent of the costs in both years.

At the current rate of enrollment, this support is worth approximately $140 million. It will also help the state maintain eligibility for MaineCare if more Mainers apply for coverage as the result of an economic downturn.

[1] US Census Bureau, Annual Survey of Entrepreneurs, 2016 data.