On March 11, 2021, President Biden signed the American Rescue Plan Act ("ARPA") into law, promising $1.9 trillion in relief related to the COVID-19 pandemic including certain relief for workers. Here is what employers need to know about ARPA:
Extension of the Families First Coronavirus Response Act (FFCRA)
The FFCRA, first enacted into law in March 2020, required employers of fewer than 500 employees to provide employees with COVID-related sick leave (Emergency Paid Sick Leave, or EPSL) and family leave (Emergency Family Medical Leave, or EFML) from April 1 through December 31, and provided employers with tax credits to reimburse the expense. Congress extended the tax credits through March 31, 2021 for employers who wished to continue the benefits on a voluntary basis. ARPA will not require employers to extend FFCRA leave, but does continue and expand the benefit when provided on a voluntary basis as follows:
Extended Period of Time: Employers may continue to provide FFCRA benefits on a voluntary basis commencing April 1 and continuing through September 30, 2021.
Expanded Eligibility for Leave: In addition to the six reasons previously allowed for COVID-related sick leave, FFCRA leave may now be available for three new reasons: 1) obtaining the COVID vaccine, 2) recovering from any injury, disability, illness or condition related to receiving the vaccine, and 3) seeking or waiting for COVID test results when the employee has been exposed or the employer has requested the test.
New Bank of EPSL Time: ARPA provides employees with a new bank of 10 EPSL days.
Expansion of EMFL: ARPA now allows eligible employees to receive EMFL pay during the first two weeks of leave, thus increasing the total benefit from 10 weeks to 12 weeks, with a maximum cap of $12,000. EMFL may now also be used not just for COVID-related child care but for any of the reasons for which EPSL may be taken.
Non-Discrimination: ARPA mandates that employers who voluntarily provide FFCRA leave in exchange for tax credits must do so on a non-discriminatory basis and may not provide leave on the basis of seniority or whether an employee is highly compensated. If FFCRA leave is provided, it must be provided to all employees equally.
New COBRA Subsidies Must Be Made Available to Eligible Recipients
The Consolidated Omnibus Budget Reconciliation Act (COBRA) allows eligible employees to continue coverage under their employer's health insurance plan for up to 18 months after coverage is lost due to a reduction in work hours or involuntary termination of employment. Employees who continue coverage under COBRA must pay the full cost of the premium. Under ARPA, eligible employees may now receive up to six months of fully subsidized premiums from April 1 through September 30, 2021. Employees who were COBRA eligible as of November 2019 but declined COBRA coverage, or elected and dropped it, will be able to elect to receive subsidized COBRA.
Employers will be required to provide notices to eligible employees. The DOL will issue notice requirements by April 10, 2021, and plan administrators must provide the notices to qualified recipients no later than May 31, 2021. Employers will receive reimbursements for the new COBRA subsidies through a payroll tax credit.
Extension of Unemployment Benefits
Under the CARES Act of March 2020, the federal government had created new categories of eligibility for unemployment benefits and increased the amount of benefit provided. ARPA extends these unemployment benefits through September 6, 2021 as follows:
Federal Pandemic Unemployment Compensation: The FPUC program operated to provide additional unemployment compensation to eligible recipients on top of the state benefits already being paid. While the $600 supplement provided under the CARES Act has now expired, ARPA will provide eligible recipients with an additional $300 weekly benefit.
Pandemic Emergency Unemployment Compensation: PEUC provided an additional 24 weeks of benefits for workers who had exhausted state benefits. ARPA extends the number of weeks of benefits to 53. Combined with the 26 weeks usually provided by states (including New York), eligible recipients can now collect up to 79 total weeks of benefits.
Pandemic Unemployment Assistance: The PUA program was created to provide benefits to certain categories of workers (i.e. business owners, independent contractors) not usually eligible to receive unemployment benefits for up to 39 weeks. Under ARPA, this benefit is now extended to 79 weeks.
ARPA also provides a waiver of federal taxes on the first $10,200 in UI benefits received in 2020 for individuals who earn less than $150,000.
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