2021 American Relief Plan Act Signed Into Law

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On March 11, 2021, President Biden signed into law the American Relief Plan Act of 2021, a $1.9 trillion relief package with benefits for employers and individuals. Given the size of the legislation, this newsletter is meant to be a brief overview of key areas for employers and employees.

Paycheck Protection Program (PPP) & Other Loans

  • Authorizes another $7.25 billion for PPP. PPP is currently set to expire on March 31, 2021.

  • Expands PPP to cover more nonprofits and digital media companies.

  • Adds $15 billion to the Economic Injury Disaster Loan Advance Grants Program.

  • Provides $28.6 billion to create a grant program that provides direct relief to restaurants, and $15 billion to the Shuttered Venue Operators Grants program.

$15 Minimum Wage Removed

The legislation did not raise the minimum wage to $15 an hour as originally proposed.

Health Insurance

  • COBRA: The government will pay the entire COBRA premium of a former employee from April 1 through September 30, 2021 for employees who have lost a job or had their hours cut. Under normal circumstances, former employees pay at least 102 percent of the cost of the premium. Employees who leave their jobs voluntarily are not eligible for this benefit..

  • Exchange: Premiums through the government exchange for healthcare have been lowered and will cost no more than 8.5 percent of an individuals modified adjusted gross income through December 31, 2022.

Families First Coronavirus Response Act (FFCRA) Leave

  • Mandatory paid leave through the FFCRA was not renewed.

  • Employers electing to provide FFCRA paid leave to employees for time off due to the virus or school closures will have the tax benefit through September 30, 2021.

  • Self-employed individuals will continue to receive leave-related tax breaks through September.

  • FFCRA leave tax credits expanded to cover time taken to receive a Covid-19 vaccine, or recover from any illness or condition related to immunization.

Stimulus Payments

  • Using the IRS’s most recent year on record (i.e. 2020 or 2019) single persons with an adjusted gross income of $75,000 or below and a social security number qualify for a $1,400 stimulus payment per person. For heads of household, adjusted gross income must be $112,500 or below, and for married couples filing jointly that number has to be $150,000 or below.

  • Eligible individuals will also receive an identical payment for each of their children including any baby born in 2021.

  • Parents of college students claimed as dependents are eligible for the payments. (They weren’t for past payments.)

  • Adult dependent relatives are also eligible for the stimulus with the payment to the qualifying taxpayer.

Unemployment Benefits

  • Individuals receiving unemployment benefits will have regular payments extended another 25 weeks, until September 6, 2021 plus the additional weekly supplemental benefit of $300.

  • The first $10,200 of benefits will be tax-free for people with incomes of less than $150,000 in 2020. Additional unemployment benefits will continue to be taxed.

  • Benefits through the Pandemic Unemployment Assistance program, which covers the self-employed, gig workers, part-timers and others who are typically ineligible for regular unemployment benefits, will be available for a total of 79 weeks, up from 50, through September 6, 2021.

  • Benefits through the Pandemic Emergency Unemployment Compensation program, which extends benefits for people who exhaust their regular state benefits, will be available for a total of 53 weeks, up from 24, through September 6, 2021.

  • The mixed-earner supplement of $100 per week was extended through September 6, 2021.

  • The legislation also clarifies that the $300 federal supplement will not be counted when calculating eligibility for Medicaid and the Children’s Health Insurance Program. The mixed earner supplement, however, will be counted.

If you have any questions on how this new legislation affects you or your business please don’t hesitate to reach out: info@barbascremer.com. We are here to help you address the day to day questions of balancing business concerns, the law, and health and safety.