What’s Happening in HR – Alert
03/17/21
Biden Signs the American Rescue Plan Act of 2021
On March 11, 2021, President Biden signed the American Rescue Plan Act of 2021, which is a long and comprehensive Act that in part directly affects employers. While it is not possible to address everything in the Act, the following bear mentioning:
Extension of the Employer Credit for Paid Sick and Family Leave
- Extends to September 30, 2021, the credit for voluntary employer provided paid sick and family leave originally mandated under FFCRA. There still is no requirement that the leave be provided.
- Increases Qualified Family Leave covered wages from a maximum of $10,000 to $12,000 and leave duration from 10 weeks to 12 weeks.
- Extends paid leave credits from original six reasons under FFCRA to also include covering leave for vaccines and times waiting for Covid test results or diagnoses.
- Allows employers to provide an additional 10 days of paid leave if an employee has already used 10 days under FFCRA. It does not appear that employers must provide the full 10 extra days after April 1, 2021, if they provide any extra days.
- Adds nondiscrimination rules preventing employers from receiving credits if their paid leave policies favor highly compensated employees, full-time works or longer tenured employees.
COBRA Continuation Coverage
- Requires employer, multiemployer plan or insurer to provide subsidized COBRA continuation coverage and pay the COBRA premium cost between April 1, 2021, and September 30, 2021, but those entities may recover these costs through a credit against quarterly Medicare payroll tax credits.
- Subsidized continuation coverage is due to employees or qualified dependents who are subject to an involuntary termination of employment or a reduction of hours. It does not appear that the involuntary termination must be related to Covid-19.
- Subsidy begins on April 1, 2021, and extends through September 30, 2021.
- Suspends the eligible individual’s obligation to make COBRA premium payments for up to 6 months.
- Subsidy is owed to employees/dependents who become eligible April 1, 2021, through the subsidiary ending date of September 30, 2021, and those individuals who did not elect or dropped COBRA coverage prior to April 1, 2021, but who are otherwise within their 18 month coverage period during this time.
Dependent Care FSA Contributions raised
- Raised the Dependent Care FSA annual limits for pretax contributions from $5,000 to $10,500 for single taxpayers and from $2,500 to $5,250 for married individuals filing separately.
Michael F. Weiner, JD, SHRM-SCP
Legislative Director
