Legislative Updates

On April 14, 2021, the U.S. Department of Labor (DOL) announced the following new guidance for plan sponsors, plan fiduciaries, recordkeepers and plan participants on best practices for maintaining cybersecurity:

• Tips for Hiring a Service Provider
• Cybersecurity Program Best Practices
• Online Security Tips

This is the first time the DOL’s Employee Benefits Security Administration has issued cybersecurity guidance and it is designed for use by plan sponsors and fiduciaries regulated by the Employee Retirement Income Security Act, plan participants, and beneficiaries.

On April 7, 2021, the U.S. Department of Labor’s (DOL), Employee Benefits Security Administration (EBSA) released frequently asked questions (FAQs) addressing how certain provisions of the American Rescue Plan Act of 2021 (ARP) apply to the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA). The FAQs provide answers to general questions, inquiries about premiums, notices, and more.

More information is provided on the COBRA Premium Subsidy website and EBSA also released the following model notices:

• General Notice and Election Notice
• Notice in Connection with Extended Election Period
• Alternative Notice
• Notice of Expiration of Premium Assistance
• Summary of the COBRA Premium Assistance Provisions​

COBRA continuation coverage provides certain group health plan continuation coverage rights for participants and beneficiaries covered by a group health plan. In general, under COBRA, an individual who was covered by a group health plan on the day before the occurrence of a qualifying event (such as getting fired or a reduction in hours that causes loss of coverage under the plan) may be able to elect COBRA continuation coverage when that qualifying event occurs. These individuals are referred to as qualified beneficiaries. Under COBRA, group health plans must provide covered employees and their families with certain notices explaining their COBRA rights.

Section 9501 of the ARP provides for COBRA premium assistance to help assistance eligible individuals continue their health benefits. The premium assistance is also available for continuation coverage under certain state laws. Assistance eligible individuals are not required to pay their COBRA continuation coverage premiums. The premium assistance applies to periods of health coverage on or after April 1, 2021 through September 30, 2021. An employer or plan to whom COBRA premiums are payable is entitled to a tax credit for the amount of the premium assistance.

The DOL also provides more information about the COBRA Premium Subsidy on its website.

Effective March 31, 2021, the U.S. Citizenship and Immigration Services (USCIS) announced another extension of the flexibility in complying with requirements related to Form I-9, Employment Eligibility Verification, due to COVID-19. This temporary guidance was set to expire March 31 but because of ongoing COVID-19-related precautions the Form I-9 flexibility policy was extended until May 31, 2021. Of note, the flexibility policy only applies to employers and workplaces that are operating remotely. 

The original March 23, 2020 news release has information about how to obtain, remotely inspect, and retain copies of the identity and employment eligibility documents to complete Section 2 of Form I-9. Read here and here for more guidance and clarification.

Employers Will Have Until July 19 to Submit Two Years of EEO-1 Data

WASHINGTON – After delaying the opening of the 2019 EEO-1 Component 1 Data Collection on May 8, 2020 in light of the COVID-19 public health emergency, the U.S. Equal Employment Opportunity Commission (EEOC) announced today that the 2019 and 2020 EEO-1 Component 1 data collection will open on Monday, April 26, 2021. 

The deadline for submitting 2019 and 2020 EEO-1 Component 1 data will be Monday, July 19, 2021.  Recognizing the continuing differential impacts of the pandemic on workplaces nationwide and the requirement to submit two years of EEO-1 data, the EEOC is extending the data collection period this year from 10 weeks to 12 weeks to provide employers additional time to file.

The EEO-1 Component 1 collects workforce data from employers with 100 or more employees (and federal contractors with 50 or more employees).  The EEOC will begin to formally notify EEO-1 filers via email beginning on March 29, 2021.  Filers should begin preparing to submit data in anticipation of the April 26 opening of the data collection period.  

EEO filers can visit https://EEOCdata.org for more information regarding updates on the data collection. When the collection opens, resources to assist filers with their submissions will be available online at https://EEOCdata.org. The EEOC Filer Support Team will also be available to respond to filer inquiries and to provide additional filling assistance.

On March 12, 2021, the Occupational Safety and Health Administration (OSHA) released an Updated Interim Enforcement Response Plan for COVID-19 which provides new instructions and guidance about how it will handle COVID-19-related complaints, referrals, and severe illness reports, summarized as follows:

• OSHA will continue to implement the Department of Labor’s (DOL) COVID-19 Workplace Safety Plan to reduce the risk of COVID-19 transmission to OSHA Compliance Safety and Health Officers (CSHOs) during inspections.
• Pursuant to the March 12, 2021 National Emphasis Program (NEP) for COVID-19, OSHA will prioritize COVID-19-related inspections involving deaths or multiple hospitalizations because of occupational exposures to COVID-19. The NEP also protects against worker retaliation.
• OSHA will perform the following types of workplace inspections, generally on-site:
• • OSHA identifies exposures to COVID-19 hazards, ensures that appropriate control measures are implemented, and addresses violations of OSHA standards and its General Duty Clause.
  • OSHA will sometimes use phone and video conferencing, instead of face-to-face employee interviews, to reduce potential exposures to CSHOs. In-person interviews will be conducted when necessary and safe.
  • OSHA will minimize in-person meetings with employers and encourage employers to provide documents and other data electronically to CSHOs.
  • Area Directors (AD) will ensure that CSHOs are prepared and equipped with the appropriate precautions and personal protective equipment (PPE) when performing on-site inspections related to COVID-19 and throughout the pandemic.
  • All inspections will generally be done so that COVID-19-related citations, and their abatement, are done quickly.
• If on-site inspections cannot safely be performed (for example, if the only available CSHO has reported a medical contraindication), the AD will approve remote-only inspections that may be conducted safely.

This plan revokes the administration’s May 19, 2020 plan, remains in effect until further notice, and is intended to be time-limited to the current COVID-19 public health crisis. OSHA’s webpage will have updates about this plan and more.

On March 11, 2021, President Joe Biden signed the American Rescue Plan Act of 2021 (HR 1319) (ARPA) to address the ongoing economic impacts of COVID-19. The portions of the act that directly affect HR functions are discussed below.

Optional Extension of Sick and Family Leaves

Part of the ARPA is an extension of the current tax credit scheme for Emergency Paid Sick Leave (EPSL) and Emergency Family and Medical Leave (EFMLA) under the Families First Coronavirus Response Act (FFCRA). The FFCRA required many employers to provide EPSL and EFMLA in 2020, but became optional when it was previously extended to cover January 1 through March 31, 2021. 

The new extension under the ARPA takes effect April 1, 2021 through September 30, 2021 and, similar to the current version, remains optional. In addition, tax credits are available but only to employers with fewer than 500 employees and up to certain caps. To receive the tax credit, employers are required to follow the FFCRA’s original provisions. For example, they cannot deny EPSL or EFMLA to an employee if they’re otherwise eligible, cannot terminate them for taking EPSL or EFMLA, and must continue their health insurance during these leaves. 

Emergency Paid Sick Leave (EPSL) Changes

Key changes to EPSL, effective from April 1 through September 30, 2021, are:

• Employees may take EPSL to get the COVID vaccine and recover from any related side effects. 
• Employees may take EPSL when seeking or waiting for a COVID-19 diagnosis or test result if they’ve been exposed to the virus or if their employer required a diagnosis or test.
• Employees will be eligible for a new bank of leave on April 1. Full-time employees are entitled to 80 hours and part-time employees are entitled to a prorated amount. Unused hours from before April 1 will not carryover.
• Employers cannot provide EPSL in a manner that favors highly compensated employees or full-time employees or that discriminates based on how long employees have worked for the employer (tenure). This is discriminatory and will disqualify the employer from receiving the tax credit. Failing to comply with the FFCRA (including its antiretaliation provisions) also disqualifies employers from receiving the tax credit.

Emergency Family and Medical Leave (EFMLA) Changes

Key changes to EFMLA, in effect from April 1 through September 30, 2021, are:

• EFMLA may be used for any EPSL reason, in addition to the original childcare reasons. This includes the two new EPSL reasons noted above (vaccination and diagnosis/test results). 
• The 10-day unpaid waiting period was eliminated.
• The cap on the reimbursable tax credit for EFMLA was increased to $12,000 (from $10,000). This applies to all EFMLA taken by an employee beginning April 1, 2020. This change accounts for the additional 10 days of paid time off; however, the daily cap of $200 remains the same.
• Employers cannot provide EFMLA in a manner that favors highly compensated employees or full-time employees or that is based on how long employees have worked for the employer.

Reasons for Using EPSL and EFMLA

Starting on April 1, employees may take EPSL or EFMLA under the same conditions, which are:

1.            When quarantined or isolated subject to federal, state, or local quarantine or isolation order.

2.            When advised by a health care provider to self-quarantine because of COVID-19.

3.            When the employee is:

1.            Experiencing symptoms of COVID-19 and seeking a medical diagnosis;

2.            Seeking or awaiting the results of a diagnostic test for, or a medical diagnosis of, COVID-19 because they have been exposed or their employer requested the test or diagnosis; or

3.            Obtaining a COVID-19 vaccination or recovering from any injury, disability, illness, or condition related to the vaccination.

4.            When caring for another person who is isolating or quarantining due to government or doctor’s orders.

5.            When caring for a child whose school or place of care is closed due to COVID-19.

Tax Credit Review

The tax credits available between April 1 and September 30 are the same as under the original FFCRA, except for the increased aggregate cap for EFMLA. Regardless of how much EPSL or EFMLA an employee used prior to April 1, the available tax credits are as follows:

• The credit available for EPSL when used for reasons 1, 2, or 3 (self-care) is up to 100 percent of their regular pay, with a limit of $511 per day. 
• The credit available for EPSL when used for reasons 4 or 5 (care for another) is up to 2/3 of their regular rate of pay, with a limit of $200 per day.
• The credit available for EFMLA for any reason is up to 2/3 of their regular pay, with a limit of $200 per day and a cap of $12,000 per employee.

Employers may also claim a credit for their share of Medicare tax on the employee’s wages and the cost of maintaining the employee’s health insurance (qualified health plan expenses) during their absence.

COBRA Subsidies 

ARPA provides a 100 percent COBRA subsidy if the loss of health coverage is due to reduction in employee's work hours (voluntary or involuntary) or involuntary termination of employment. The subsidy applies for up to six months of coverage from April 2021 through September 2021 (unless the individual’s maximum COBRA period expires earlier). For group plans subject to the federal COBRA rules, the employer will be required to pay the COBRA premium but will be reimbursed through a refundable payroll tax credit. 

Employers with fewer than 20 workers usually are exempt from the federal COBRA rules, but their group medical insurance plans may be subject to a state’s mini-COBRA law. In that case, it appears the subsidy will be administered by the carrier. The carrier will pay the premium and then be reimbursed by the government. 

Employers will need to work with their group health plan carriers and vendors on how to administer the new subsidy provision. Although it takes effect April 1, 2021, employees who were terminated earlier but are still in their COBRA election window also are included. Federal guidance is expected to be released by April 10, including model notices that plans may use. 

Note: The COBRA subsidy does not apply during FFCRA leaves because employees are entitled to maintain their health insurance during those leaves on the same terms as though they continued working

Additional Information

The White House has a website dedicated to the American Rescue Plan, and according to the IRS, it is “reviewing implementation plans for the American Rescue Plan Act of 2021. Additional information about a new round of Economic Impact Payments, the expanded Child Tax Credit, including advance payments of the Child Tax Credit, and other tax provisions will be made available as soon as possible on IRS.gov. The IRS strongly urges taxpayers to not file amended returns related to the new legislative provisions or take other unnecessary steps at this time.”

“The IRS will provide taxpayers with additional guidance on those provisions that could affect their 2020 tax return, including the retroactive provision that makes the first $10,200 of 2020 unemployment benefits nontaxable. For those who haven't filed yet, the IRS will provide a worksheet for paper filers and work with software industry to update current tax software so that taxpayers can determine how to report their unemployment income on their 2020 tax return. For those who received unemployment benefits last year and have already filed their 2020 tax return, the IRS emphasizes they should not file an amended return at this time, until the IRS issues additional guidance.”

On March 10, the final version of the American Rescue Plan Act of 2021, was approved by Congress, with most of the employer provisions from the original proposal unchanged. As expected, the provision raising the federal minimum wage was excluded from the final relief package. The American Rescue Plan was signed into law by President Biden on Thursday, March 11.

Here is a short summary of numerous law changes:

• COBRA continuation coverage.
• Dependent care flexible spending accounts. The law raises the 2021 contribution limit for dependent care flexible spending accounts to $10,500 for single taxpayers and to $5,250 for married individuals filing separately. The provision raises the exclusion limits for the plan year beginning after Dec. 31, 2020, and before Jan. 1, 2022.
• Modification to the Paycheck Protection Program.
• Veteran Rapid Retraining Assistance Program.
• The extension of federal pandemic unemployment assistance.
• The extension of pandemic emergency unemployment compensation.
• The extension of emergency unemployment relief for governmental entities and nonprofit organizations.
• Employer credits for paid sick and family leave.
• The employee retention credit.

On March 9, the U.S. House of Representatives voted 225-206 to pass H.R. 842, the Protecting the Right to Organize (PRO) Act. If enacted into law, the bill would be the most expansive labor relations legislation since the National Labor Relations Act (NLRA) of 1935.

The legislation would, among other provisions:

• Weaken right-to-work laws in 28 states by permitting unions to require workers at unionized companies to pay dues. Currently, employees in right-to-work states may choose not to pay union dues.
• Greatly expand the definition of "employee" and almost expunge the concept of independent contractor.
• Make it easier to establish that two or more employers are joint employers.
• Prohibit class-action waivers in arbitration.
• Expand damages under the NLRA.

Last April’s EBSA Disaster Relief Notice 2020-01 provided extensions for certain deadlines for COBRA, HIPAA, and claims filing timeframes, effective March 1, 2020. Under the extension, the affected timelines were “paused” until the earlier of the end of the “Outbreak Period” (60 days after the COVID-19 national emergency was declared over) or one year (February 28, 2021).

EBSA issued Disaster Relief Notice 2021-01 clarifying the timeline extensions granted in the earlier Notice.

Individuals and plans with timeframes that are subject to the relief under the Notices will have the applicable periods under the Notices disregarded until the earlier of:

(a)  1 year from the date they were first eligible for relief, or

(b)  60 days after the announced end of the National Emergency (the end of the Outbreak Period).

On the applicable date, the timeframes for individuals and plans with periods that were previously disregarded under the Notices will resume. In no case will a disregarded period exceed 1 year.

On February 27, 2021, the U.S. House of Representatives Passed the American Rescue Plan Act of 2021 (“Biden’s $1.9 trillion stimulus plan”). This bill provides additional relief to address the continued impact of COVID-19 (i.e., coronavirus disease 2019) on the economy, public health, state and local governments, individuals, and businesses.

Specifically, the bill provides funding for:

·         agriculture and nutrition programs, including the Supplemental Nutrition Assistance Program (SNAP, formerly known as the food stamp program);

·         schools and institutions of higher education;

·         child care and programs for older Americans and their families;

·         COVID-19 vaccinations, testing, treatment, and prevention;

·         mental health and substance-use disorder services;

·         emergency rental assistance, homeowner assistance, and other housing programs;

·         payments to state, local, tribal, and territorial governments for economic relief;

·         multiemployer pension plans;

·         small business assistance, including specific programs for restaurants and live venues; and

·         programs for health care workers, transportation workers, federal employees, veterans, and other targeted populations.

The bill also includes provisions that

·         raise the federal minimum wage to $15 an hour by 2025;

·         extend unemployment benefits and related services;

·         provide a maximum recovery rebate of $1,400 per eligible individual;

·         expand and otherwise modify certain tax credits, including the child tax credit and the earned income tax credit;

·         provide premium assistance for certain health insurance coverage; and

·         require coverage, without cost-sharing, of COVID-19 vaccines and treatment under Medicaid and the Children's Health Insurance Program (CHIP).

The bill has now been referred to the Senate. Check back for updates to see if the bill becomes law.