The American Rescue Plan Act and How It Affects Employers

Employment-related highlights of the recently enacted American Rescue Plan Act of 2021 (ARPA) include extended federal paid leave, COBRA premium subsidies, and expanded unemployment benefits.

Extended Paid Leave

The ARPA further extends paid leave that was initially created by the Families First Coronavirus Response Act (FFCRA) on April 1, 2020. The FFCRA provided paid expanded family and medical leave (EFML) broader than the Family and Medical Leave Act of 1993 and emergency paid sick leave (EPSL) to certain employees affected by COVID-19. FFCRA mandatory leave provisions expired on December 31, 2020, but those provisions were extended as voluntary options through March 31, 2021. The ARPA further expands and extends FFCRA paid leave from April 1, 2021 through September 30, 2021 (Extended Period), as follows:

Employers with fewer than 500 employees may choose to provide the paid leave.

• If employers choose to provide any paid leave in the Extended Period under the ARPA, they may be entitled to tax credits.
• Employees get a new entitlement of up to 80 hours or 10 days of EPSL to use in the Extended Period.
• Additional eligibility reasons for EPSL include: (a) obtaining COVID-19 vaccines; (b) recovering from an injury, disability, illness, or condition related to COVID-19 vaccination; and (c) seeking or awaiting the results of a COVID-19 test or diagnosis because either the employee has been exposed to COVID or the employer requested the test or diagnosis.
• EFML tax credits were increased.
• Certain state and local government employers and 501(c) federal government entities will be tax-credit eligible.
• Employers may not discriminate in favor of highly compensated employees, full-time employees, or employees on the basis of employment tenure.

COBRA Premium Subsidies

The ARPA subsidizes certain COBRA premiums through tax credits. COBRA allows employees and their families who would otherwise lose their group health coverage due to certain life events to continue their group health coverage, known as COBRA continuation coverage. The ARPA provides a 100% premium subsidy for individuals whose reduction in hours or involuntary termination of employment makes them eligible for COBRA continuation coverage during the Extended Period. Employers’ plan administrators must provide timely notice to “assistance eligible individuals”, which includes certain former employees who separated throughout the pandemic.

Unemployment Benefits

The ARPA extended expanded unemployment benefits with $300 weekly supplements through Labor Day (September 6, 2021). Gail E. Farb can be reached at [email protected].

Phone: 941-366-4800 Website: www.WilliamsParker.com