Recent guidance on the Families First Coronavirus Response Act (FFCRA) and the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was issued in the form of IRS Notice 2020-54 and FAQ 2 Part 43.

The IRS Notice instructs employers on how to report FFCRA’s paid qualified sick leave wages and qualified family leave wages on an employee’s Form W-2 Box 14, or on a separate statement. The leave wages must be included in Boxes 1, 3 and 5, as applicable. The notice addresses self-employment income issues, also.


FFCRA – COVID-19 Diagnostic Testing Coverage Without Cost-sharing

CARES Act — COVID-19 Diagnostic Testing Coverage Without Cost-sharing

  • Balance billing is precluded, generally.
  • Health plans must reimburse an out-of-network provider the cash price for the COVID-19 testing that is listed by the provider on a public website (or a negotiated rate, if applicable) – including non-grandfathered plans subject to ACA’s emergency room coverage provision.

Notice — A health plan does not have to comply with ACA’s SBC 60-day advance notice requirement if/when revoking coverage changes for increased benefits for the diagnosis and treatment of COVID-19 or for telehealth and other remote care services, upon expiration of the public health emergency related to COVID-19. This exception applies only ifthe plan/insurer: (1) had previously notified the participants of the general duration of the additional benefits coverage or reduced cost-sharing; or (2) notifies them of the general duration within a reasonable timeframe in advance of the reversal of the changes.

Telehealth and Other Remote Care Services — Large employers can offer telehealth and other remote care service arrangements to employees (or dependents) who are not eligible for coverage under any other group health plan offered by that employer. This relief is permissible for the duration of any plan year beginning before the end of the public health emergency related to COVID-19.

Grandfathered Plan Status — A group health plan will not lose ACA grandfathered status for reversing coverage to the extent the plan added certain COVID-19-related benefits for the period in which a public health emergency or national emergency related to COVID-19 is in effect.

MHPAEA — Health plans may disregard benefits for items and services required (by FFCRA) to be covered without cost-sharing temporarily, when performing the MHPAEA’s “substantially all” and “predominant” tests for financial requirements and quantitative treatment limitations.

Wellness Programs — Health plans can waive a standard (including a reasonable alternative standard) for obtaining a reward under a HIPAA health-contingent wellness program if the COVID-19 public health emergency makes it difficult to meet, assuming the waiver is offered to all similarly situated individuals.
Employers should continue to monitor FFCRA, CARES Act and other COVID-19 related guidance. And discuss paid leave reporting requirements with their payroll vendor.

For more information, see IRS Notice 2020-54FAQ 2 Part 43 and the previously issued FAQ 1 Part 42, as well as the Bulletins below

FAQs on Health Plan Coverage under the FFCRA and the CARES Act, Part 1

FAQs on Health Plan Coverage under the FFCRA and the CARES Act, Part 2

Read Our Bulletin on FFCRA W-2 Reporting


Check out our COVID-19 Resource Center for more resources and information.