Though the COVID-19 pandemic looks to be back on the upswing, two COVID-19 laws are expiring shortly: the law allowing restaurants in NYC to apply a COVID-19 surcharge to customer checks, and the law providing a COBRA subsidy to eligible employees who lost health coverage due to termination of employment or reduction in hours.
NYC COVID-19 Surcharge Expires August 17, 2021
As we previously alerted you, last fall the New York City Council approved a bill that temporarily allowed restaurants and other food service establishments to add a “COVID-19 Recovery Charge” of up to 10% of the total bill to customers’ checks for indoor and outdoor dining, so long as the charge was clearly disclosed to customers before any items were ordered.
Effective August 17, 2021, NYC restaurants and other food service establishments may no longer add a COVID-19 Recovery Charge to customer checks.
Please remember that irrespective of COVID-19, NYC also prohibits businesses from imposing any mandatory charges on a customer’s check, so businesses may not simply rename the COVID-19 Recovery Charge and continue to charge a mandatory fee.
Federal COBRA Subsidy Expires September 30, 2021
As we previously alerted you, under the American Rescue Plan Act of 2021, assistance eligible individuals who experienced a COBRA-qualifying event because of their involuntary termination of employment or reduction of hours are eligible for a 100% subsidy for their COBRA costs, provided the employee is eligible for and timely elects COBRA health care continuation coverage (“COBRA Subsidy”). The COBRA Subsidy expires on September 30, 2021.
Between August 16 and September 15, 2021, assistance eligible individuals who are eligible to continue COBRA beyond the coverage period ending September 30, 2021 must be notified that the COBRA Subsidy is expiring and that they may be eligible for coverage without premium assistance through COBRA, a group health plan, the Health Insurance Marketplace or Medicare/Medicaid. The Department of Labor has published a Notice of Expiration of Period of Premium Assistance, available here, which insurance carriers can issue to assistance eligible individuals to comply with this notice requirement. Employers should verify that their insurance carriers are providing such notice.
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If you have questions or would like additional information, please contact our Labor & Employment attorneys or the primary EGS attorney with whom you work.
