Can you believe it’s been a whole year? Time sure flies when you’re hiding inside fearing a deadly virus.
To celebrate our Panniversary, we got you a little something. Here’s a hint: it starts with an F and ends in an A—and it’s not a Fajita. You deserve more than that after a whole year together. This gift is all wrapped up inside the American Rescue Plan. Look, and it’s a brand new version of the FFCRA! No need to thank us. There’s also some crazy news on COBRA benefits.
That’s right gang, our most talked about, written about, fretted over law that just won’t go away is back again. Just to reminisce a bit about this storied law, which we first heard about this time last year and went into effect on April Fool’s Day 2020, we wrote about it here, here, here, here, and here and of course here ⬇️. No, this is not an obsession, it’s just part of our being your pandemic savants.
FFCRA 3.0 starts April 1, 2021, and is very much like its immediate predecessor, good old FFCRA 2.0, which expires on March 31, 2021. This means that the use of the law by employers is purely voluntary. So you are not required to provide employees with Emergency Paid Sick Leave (“EPSL”) or Emergency Family Medical Leave (“EFML”) and have not been since December 31, 2020. But, if you choose to allow for such leaves, the feds will continue to pick up 100% of the tab through payroll tax reimbursements so long as you follow the requirements of the original law with a few changes.
Under the version that expires on March 31, the leave and corresponding fed reimbursement was only available to the extent that the employee taking leave had not used the FFCRA benefits in 2020. FFCRA 3.0 resets the clock starting April 1 under EPSLA, meaning all employees will have the full amount of paid sick leave available and employers will get reimbursed for all of it. But of course, we wouldn’t be dealing with the federal government if there wasn’t some built-in, wanna pull your hair out, ambiguity. The new law says that the EPSL benefit is 10 paid days of sick leave. The FFCRA regs still refer to 80 hours of paid sick leave. Chuck, Mitch, Nancy, is it really that hard to get on the same page? Oh yeah, forgot who we’re asking. But if a part-time employee who works 4 hour days needs EPSL, do they get ten 4 hour days or 80 hours which is 20 days for them? We know we’re supposed to tell you the answers not ask inane rhetorical questions. But because this is what Congress has done, we’re right there with you screaming into the wind.
There is also something new under FFCRA 3.0. No matter how you calculate it, the new paid sick leave benefit is now available if the employee has the bug, is taking care of someone with it, is seeking or awaiting the results of a test or diagnosis and such employee has been exposed to COVID-19 or the employee’s employer has requested such test or diagnosis, or the employee is obtaining the immunization related to COVID-19 or recovering from any injury, disability, illness or condition related to such immunization after medical diagnosis…
This means that in addition to the prior reasons you could use the EPSL, including while employees are out of work awaiting test results, you can now pay them (on the feds dime) to go get the vaccine. And here are some motivational words of encouragement from our beloved Congress… recovering from any injury, disability, illness, or condition related to such immunization. So they’re saying, while we want you to get the vaccine and we are even willing to pay you to get it, just in case the shot nearly kills you, we’ll also pay for time off for you to recover. Downright inspirational!
Fortunately, FFCRA 3.0 did not reset the clock on the EFMLEA. That form of leave is still available (again if an employer allows it), but only to the extent that the employee seeking the paid leave to care for kiddies at home did not use the full benefit in 2020 or the first quarter of 2021. The only difference under the new law is that there are now a full 12 weeks available in addition to the 10 days or 80 hours #!%&^* under the EPSLA. Previously, a full 12 weeks was only available if the employee had not used all or part of the EPSL.
FFCRA 3.0 is scheduled to sunset on September 30, 2021. But like the Phoenix….Oh, who knows. And we are so sick of writing about this law that if there is a 4.0, we might not even tell you.
The American Rescue Plan did have one unexpected surprise for employees on or going on COBRA. Anyone currently on COBRA or who enrolls on or after April 1, 2021, will have 100% of the premium paid by the federal government through September 30, 2021, so long as the employee left the job involuntarily. Any employee that was eligible and either did not elect or dropped COBRA within 18 months of termination can now elect or reelect through the end of the 18 month period or September 30 at no cost. This subsidy ends if the employee becomes eligible for coverage by another employer plan. The feds are supposed to issue new model COBRA Notices any day now. Yawn. If you have a COBRA administrator that part is their headache. If you do it yourself, let us know so we can get the notices to you when the feds get around to producing them.
The way the cash flow works is that employers will receive a payroll tax credit against quarterly taxes for the COBRA premium subsidy for all eligible former employees on COBRA. If the credit exceeds the amount of payroll taxes due in any quarter, the feds say they will refund employers when they submit the quarterly tax return. We can’t wait to see how well these refunds work. Will they take 10 days or 80 hours?