The COVID-19 pandemic has created ripple effects across nearly every sector of the economy, but perhaps nowhere more intensely than in health care. Beyond the clinical challenges, the regulatory landscape has shifted rapidly as state and federal governments introduced emergency measures to support workers and protect public health. One of the most consequential laws passed in 2020 was the Families First Coronavirus Response Act (FFCRA), designed to provide paid leave protections for employees affected by COVID-19.
Now, with recent updates from the U.S. Department of Labor (DOL), behavioral health providers could face new compliance hurdles. The DOL’s decision to narrow the definition of a health care provider has significant implications for who qualifies for paid leave under FFCRA. For behavioral health organizations, already stretched thin by the demands of the pandemic, this change introduces new financial and administrative pressures.
Understanding the Families First Coronavirus Response Act (FFCRA)
Passed in April 2020, the FFCRA was one of the first major federal responses to the pandemic. The law applied to private employers with fewer than 500 employees as well as certain public employers. Its main provisions included:
- Paid Sick Leave: Up to 80 hours of paid leave for employees unable to work due to COVID-19 infection, quarantine orders, or caregiving responsibilities.
- Expanded Family and Medical Leave: Up to 12 weeks of partially paid leave (at two-thirds the normal pay rate) for employees who needed to care for children due to school or daycare closures.
In exchange, employers were entitled to fully refundable tax credits to cover the cost of providing this leave. The structure was meant to balance employee protections with employer sustainability.
Initially, the FFCRA included a broad exemption for health care providers. The assumption was that critical health care operations should not be disrupted by widespread staff absences. But recent revisions from the DOL have redefined who falls under that exemption.
What Changed in the Definition of Health Care Provider?
When FFCRA first took effect, the term “health care provider” was applied broadly to nearly anyone working in a health care setting. That meant employees across the spectrum—from clinicians to administrative and support staff—were excluded from paid leave protections.
In September 2020, the DOL issued new guidance narrowing that scope. Now, only employees directly involved in patient care or the provision of health services are considered exempt. Workers such as IT professionals, building maintenance staff, HR employees, food service workers, consultants, billers, and other non-clinical staff are no longer excluded.
For behavioral health organizations, this is a major shift. Many previously exempt employees, particularly those in administrative or support roles, may now qualify for FFCRA leave if they meet eligibility requirements.
Why Behavioral Health Providers Are Concerned
The change is more than a technical adjustment—it represents a real-world financial and operational challenge. Behavioral health providers, many of which already operate with tight margins, are now responsible for managing and processing leave requests for employees who weren’t previously eligible.
Employment lawyer Theresa Gallion, who has advised behavioral health organizations for decades, summarized the situation bluntly:
“It’s been a big jolt to realize we thought we were totally in the clear as healthcare providers, only to have the DOL … say, ‘Wait a minute — that was too broad of a definition.’”
For providers, this means reexamining policies, training managers, and ensuring compliance with FFCRA leave rules, all while navigating the broader challenges of the pandemic.
Compliance and Due Diligence: What Employers Need to Know
The good news is that while employers are required to provide paid leave under these new rules, the federal government reimburses the cost through tax credits. However, this does not eliminate the administrative burden on providers.
Organizations must conduct careful due diligence to ensure leave is justified and documented. For example:
- Childcare leave: Parents of children over 14 must provide a clear reason why their presence at home is required.
- School closures: Leave is not available simply because schools are closed for holidays or summer vacation, nor if parents voluntarily choose remote learning while in-person classes are available.
- Hybrid models: If a child’s school only allows in-person attendance on certain days, employees may be eligible for leave on remote learning days.
Employers must balance compassion with vigilance. As Gallion noted, the government expects providers to be “good stewards” of public money, asking questions and offering alternative work arrangements before approving paid leave requests.
Preventing Abuse and Fraud
A critical aspect of compliance is preventing fraudulent or inappropriate claims. Employers who uncover false leave requests are entitled to take disciplinary action, including termination.
To safeguard against abuse, behavioral health organizations should:
- Implement clear policies outlining FFCRA leave criteria.
- Train supervisors on how to evaluate and document leave requests.
- Require written documentation from employees when requesting childcare-related leave.
- Maintain thorough records to support reimbursement claims with the IRS.
By putting these systems in place, providers can both protect their organizations and ensure legitimate employee needs are met.
Financial and Operational Implications
The financial impact of the revised definition may vary depending on the size and staffing structure of each behavioral health organization. For smaller providers, even a handful of employees taking extended leave could disrupt operations. Larger organizations may feel the administrative strain of processing more requests.
At the same time, COVID-19 has already increased demand for behavioral health services. More individuals are struggling with anxiety, depression, and substance use disorders, while providers are simultaneously navigating staffing shortages and revenue fluctuations. Adding paid leave obligations to the mix may feel overwhelming.
The Bigger Picture: Behavioral Health During COVID-19
The FFCRA revision is part of a broader challenge: ensuring the behavioral health workforce can continue to serve communities during an unprecedented crisis. Unlike hospitals, many behavioral health organizations lack deep financial reserves or large administrative teams.
Yet, behavioral health care is essential. The pandemic has heightened awareness of the need for accessible mental health and substance use disorder treatment. Policies like FFCRA are designed to protect workers and their families, but they can inadvertently strain the very providers delivering critical care.
What Comes Next
As of now, FFCRA is set to expire on December 31, 2020, unless extended by Congress. Lawmakers could decide to revise or expand paid leave policies depending on how the pandemic evolves.
In the meantime, behavioral health providers should:
- Review their leave policies and update them in line with the new DOL definition.
- Communicate clearly with employees about their rights and obligations under FFCRA.
- Establish systems for documenting and processing leave requests.
- Seek legal or HR guidance if unsure about compliance requirements.
Staying proactive will help providers navigate this uncertain environment while continuing to deliver quality care to patients.
onclusion
The narrowing of the FFCRA health care provider definition may seem like a technical change, but for behavioral health organizations, it represents a significant shift in workforce management. While the federal government reimburses the costs of paid leave, the administrative burden, potential staffing shortages, and compliance risks fall squarely on providers.
As the pandemic continues to reshape health care, behavioral health organizations must remain agile, balancing regulatory compliance with their mission to serve vulnerable populations. The coming months will determine not only how providers adapt to FFCRA but also how the sector continues to evolve in response to the ongoing crisis.
