Congress recently passed the American Rescue Plan, which provides additional relief to individuals and businesses impacted by the COVID-19 epidemic. Though we need further guidance, not yet released, from the DOL, we will briefly summarize some of the pieces relevant to our clients:
• An extension of the Employee Retention Tax Credit through the 3rd and 4th quarters of 2021. Any credits in 2020 must be completed by 6/1.
• An extension of the tax credits for voluntarily providing FFCRA paid sick and family leave another two quarters – through Sept. 30, 2021. Keep in mind that Colorado has the PHE (public health emergency) paid leave obligation. The DOL has not clarified if employers voluntarily abiding by the FFCRA can cap their offerings at 80 hours or if they must extend it to the 14 weeks noted in the Act.
• An increase in the exclusion for employer-provided dependent care assistance for 2021 from $5,000 to $10,500. We are reaching out to employees directly so that they may voluntarily increase their elections if they desire.
• A temporary subsidy of 100 percent for COBRA qualified beneficiaries where the employee’s qualifying event was an involuntary termination of employment or reduction in hours due to the pandemic, with the subsidy paid by the employer, plan, or insurer and reimbursed by the government through a refundable payroll tax credit. This will take effect 4/1/2021 – 9/30/2021. Our TPA, 24hourflex, will administer this.
• A temporary elimination of the upper income limit for eligibility for premium tax credits in the ACA exchanges – which is currently set at 400 percent of the federal poverty level for 2021 and 2022 – and an increase in the amount of the premium tax credits by decreasing the amount that an individual must contribute to the cost of coverage.
• An expansion of the eligibility guidelines for the Paycheck Protection Program to allow more nonprofit entities to be eligible.
• A direct subsidy of $28.6 billion set aside for restaurants to be administered by the Small Business Administration, with $5 billion of this amount set aside for restaurants with gross revenue of less than $500,000.
The American Rescue Plan extends several unemployment provisions in the CARES, Family First, and CAA bills, including:
• The waiver of interest on outstanding loans to states to pay unemployment compensation.
• 100 percent federal reimbursement of regular extended unemployment benefits.
• Additional funding for systems and to address fraud.
• An increase in federal reimbursement credits to reimbursing employer accounts.
Finally, the bill extends temporary federal unemployment benefits by $300 a week through August 29, 2021.
With the very new passing of this bill, we are seeking clarification from experts who can help us navigate these benefits and provide you with accurate information. As we have more details we will pass along that knowledge.