From the COVID-19 pandemic to the new Supreme Court decisions, there have been a wide variety of significant, new or changed compliance requirements that impact employee-facing policies.
The American Rescue Plan Act of 2021 (ARPA), signed into law on March 11, 2021, includes many requirements and provisions that impact employers and their employees, from a benefit to tax perspective. Guidance from the Department of Labor (DOL) and the Internal Revenue Service (IRS) is starting to trickle in, with recently released guidance on the Cobra subsidy front, however we are still awaiting new guidance regarding the FFCRA extension and expansion of qualifying reasons.
Effective April 1st, employers must offer a 100% subsidy for Cobra continuation coverage to eligible employees (and their dependents) for 6-months through September 30, 2021. The employer subsidy will be offset by Medicare tax credits. To be in compliance with the new requirements, employers must update their Cobra notices and advise newly eligible and current Cobra participants of the subsidy by May 31, 2021.
The ARPA adds $300 per week for individuals collecting any form of unemployment compensation benefits through September 6, 2021. It also extends Pandemic Emergency Unemployment Compensation (PEUC) and Pandemic Unemployment Assistance (PUA) benefits through September 6, 2021 for those that exhaust traditional unemployment benefits or are not eligible for traditional unemployment benefits. These programs were originally set to expire on March 14, 2021.
While the ARPA does not require Families First Coronavirus Response Act (FFCRA) paid and emergency family leave anymore, the ARPA both extends and expands the FFCRA tax credits to incentive employers to continue to provide paid time off for FFCRA and new COVID-19-related reasons.
The new provisions give employers the opportunity to obtain tax credits for offering an additional 10 days of paid sick leave to eligible employees from April 1, 2021 through September 31, 2021. The ARPA also resets the 10-day allotment and tax credit eligibility effective April 1, 2021 so any employee who has taken time under the FFCRA previously, will have a new “bank” of eligible time.
The ARPA also expands the qualifying reasons for leave under the FFCRA to include time spent receiving the Covid-19 Vaccine and complications from receiving the vaccine as well as time spent away from work while awaiting the results of a COVID-19 test or diagnosis.
Providing this additional leave is not a requirement so employers must evaluate if they will be offering the extension to their employees.
The ARPA provides a temporary increase to the dependent care FSA limit. For 2021, the dependent care FSA limit increases to $10,500 up from $5,000.
The ARPA increased its funding by an additional $7.25 billion towards PPP loans, and extended the application deadline to May 31, 2021.