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March 26, 2020

Feds to provide reimbursement for COVID-19 leave costs

By Michelle Tuccitto Sullo

As more Connecticut residents are becoming ill each day from the coronavirus outbreak, government officials assured small and mid-sized businesses that financial assistance is available to reimburse them for medical leave costs.

The recently passed federal Families First Coronavirus Response Act, which goes into effect on April 2, provides for up to 80 hours, or two weeks, of paid sick leave for workers sickened by the virus. 

As of Tuesday afternoon, Gov. Ned Lamont indicated in a press briefing that 618 state residents had tested positive for the virus, and 12 residents had died.

State Insurance Department Commissioner Andrew Mais, citing guidance from the Internal Revenue Service, said employers can obtain reimbursement for 100 percent of the cost of providing virus-related leave to their workers. 

Health insurance costs during an employee’s leave will also be covered under the act.

“This is very good news for small and medium-sized Connecticut businesses with employees on medical leave caring for themselves or family members,” Mais said in an announcement. “It removes a concern and reduces expenses related to employees on medical leave.”

Companies with fewer than 50 employees can seek an exemption to the leave requirements under the act if compliance would jeopardize the viability of their enterprise. 

The IRS, U.S. Treasury Department and the U.S. Department of Labor indicated that small and midsize employers can take advantage of two new refundable payroll tax credits. 

The IRS indicated that in addition to the sick leave credit, eligible employers may also obtain a refundable child-care leave credit. This is for situations in which an employee can’t work because he or she must care for a child whose school or day care has closed due to coronavirus. According to the IRS, this credit is equal to two-thirds of the employee's regular pay, capped at $200 per day.

The goal is to promptly and fully reimburse employers for their costs associated with providing coronavirus-related leave to employees, according to the IRS.

For more information, visit the IRS’ website here.

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