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On March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 (ARPA). Among the most significant changes for employers are the provisions related to COBRA. The ARPA provides assistance-eligible individuals (AEI) with the opportunity for a 100 percent subsidy for COBRA premiums between April 1, 2021 and September 30, 2021 (the Subsidy Period).

AEI include all COBRA qualified beneficiaries who are eligible for COBRA continuation coverage due to an involuntarily termination (or a reduction of hours) during the Subsidy Period and individuals who would have been AEI, but previously dropped or declined such coverage (i.e., their maximum COBRA coverage period would have extended beyond April 1, 2021). This is true regardless of whether their termination was related to the pandemic. In other words, any individual who qualified for COBRA because of an involuntary termination or reduction in hours with a coverage period that would have extended beyond April 1, 2021, is now eligible to elect coverage and take advantage of the subsidy. Employers (or their plan administrators) must provide updated COBRA notices to AEI. The Department of Labor is required to issue a model notice within the next thirty days. AEI will have sixty days from receipt of the notice to elect COBRA coverage, which will be retroactive to April 1, 2021.
Continue Reading COBRA changes under the American Rescue Plan Act of 2021

Updated April 4, 2020

Effective April 1, the Families First Coronavirus Response Act (FFCRA or Act) requires certain private sector employers with fewer than 500 employees and governmental employers of all sizes to provide their employees with emergency paid sick leave and emergency paid medical leave. More information about the FFCRA is available here.

Given the current unknowns, many employers are evaluating the financial implications of the Act’s expansive mandatory paid leave and making difficult decisions, including reducing head count.

To incentivize employers (in particular, those deemed essential under various shelter orders) to retain their employees and bear the costs of emergency paid leave, the FFCRA offers covered employers a refundable payroll tax credit. This tax credit offsets the cost of the paid leaves required under the Act, and could make all the difference for certain businesses concerned that the cost of these paid leaves will run them out of business. Here’s how it works.Continue Reading FFCRA payroll tax credits: Here’s how it works

The afternoon of March 18, 2020, the Senate passed H.R. 6201, the Families First Coronavirus Response Act. Division C of the Bill details the Emergency Family and Medical Leave Expansion Act, and Division E provides additional protections under the Emergency Paid Sick Leave Act. Both divisions apply to employers with fewer than 500 employees.

At a high level, these laws work together so that, under the Emergency Paid Sick Leave Act, qualifying employees will receive 80 hours of paid leave for immediate use, then they will received paid leave at two-thirds of the employee’s wages for the duration of a COVID-19 related Family and Medical Leave Act leave.

Key provisions of both laws are described below.

Emergency Family and Medical Leave Expansion Act (Effective 15 days after enactment)

This statute provides for additional benefits under the FMLA so that eligible employees will receive job protection and a paid component for certain COVID-19-related absences.

Which employers are covered? 

Employers with fewer than 500 employees are subject to the expansion. Part-time employees are included in this count to assess coverage.

The Secretary of Labor has authority “for good cause” to exempt (1) certain healthcare providers and emergency responders; and (2) small employers with fewer than 50 employees where the added expense would jeopardize the business. Under certain circumstances, the requirement to restore employees to their employment will not apply to businesses with fewer than 25 employees.

Additionally, an employer of employees who are healthcare providers or emergency responders may exclude these employees.

As a practical matter, larger employers that break up their workforce across smaller employing entities should review the respective employee populations for each entity to determine whether the expansion will apply to that population. In making this decision, consider what company is listed as the employer on an employee’s pay statement or review each Employer Identification Number separately.

Which employees are eligible?

Employees who have been employed for at least 30 calendar days will qualify for leave. Notably, the other FMLA employee eligibility requirements (e.g., hours worked) do not apply here.

Employers appear to have the discretion to exclude healthcare providers and emergency responders, though this language of the statute is in tension with the delegation of rulemaking authority to the Secretary of Labor to determine such exemptions.

What events will trigger coverage?

Employees who are unable to telework may use this leave if they must care for a child following the closure of a school or daycare, or other unavailability of childcare due to the coronavirus.

How does paid leave apply?

The first ten (10) days of FMLA leave may be unpaid (but see the Emergency Paid Sick Leave Act provisions, below).  Employees may elect to use their accrued vacation, personal or sick leave to cover this window, but employers may not require it. After this initial period, the employer will be required to pay at least two-thirds of an employee’s regular wages, according to their normally scheduled hours.

Payment is capped at $200 per day and $10,000 total for the duration of the leave.

The statute provides a formula for calculating payments for employees with varying or irregular schedules.

The expansion allows for up to twelve (12) weeks of coverage for all eligible employees in addition to the initial 10-day supplement provided by the Act.Continue Reading What employers need to know about the Families First Coronavirus Response Act (H.R. 6201)