Updates on COVID Benefits (COBRA Subsidy and Sick Pay)
American Rescue Plan Act of 2021 (APRA)- COBRA Subsidy
As we continue to navigate through the challenges of the Pandemic, we wanted to give you a quick update on two important types of COVID related benefits that employers must be aware of. The first is a new COBRA subsidy created by the Federal government under the American Rescue Plan Act of 2021 (APRA). In short, this new benefit includes a 100% COBRA premium subsidy for any employee or dependent who is a COBRA qualified beneficiary (or will become one) resulting from an involuntary termination of employment or a reduction of hours (referred to as an Eligible Individual). This special COBRA subsidy must be made available to qualified individuals who would be eligible for COBRA during the fixed period of May 1, 2021 through October 31, 2021. In addition, a special notice and election form must be provide to employees with the current COBRA notification.
For this COBRA subsidy, employers will recover the subsidized premiums through a refundable payroll tax credit (akin to the way in which employers recovered mandatory paid leave costs under the Families First Coronavirus Response Act). For former employees, the subsidy ends immediately if an individual becomes eligible for coverage under another group health plan or Medicare. The burden is on the individual to inform their former employer that they are no longer eligible for subsidized COBRA coverage under ARPA. ARPA provides that an
y individual who fails to update their former employer about a change in eligibility is subject to a $250 fine (and up to 110% of the full subsidy amount if the failure to notify is determined to be deliberate). For more information about this new employee benefit, please check out the FAQs and model notices available at https://www.dol.gov/agencies/ebsa/laws-and-regulations/laws/cobra/premium-subsidy
2021 COVID-19 Supplemental Paid Sick Leave (SPSL)
As a reminder, employers (public or private) with more than 25 employees are covered under this this ne
w law. The primary purpose of this leave is to provide paid sick leave for covered employees who are unable to work (whether at your location or from home) due to any one of the following reasons:
Caring for Yourself: The covered employee is subject to a quarantine or isolation period related to COVID-19, has been advised by a healthcare provider to quarantine due to COVID-19, or is experiencing symptoms of COVID-19 and seeking a medical diagnosis.
Caring for a Family Member: The covered employee is caring for a family member who is either subject to a quarantine or isolation period related to COVID-19, has been advised by a healthcare provider to quarantine due to COVID-19, or the employee is caring for a child whose school or place of care is closed or unavailable due to COVID-19 on the premises.
Vaccine-Related: The covered employee is attending a vaccine appointment or cannot work or telework due to vaccine-related symptoms.
For more information, check out the California’s Department of Industrial Relations (“DIR”) recently released guidance.
Super helpful are the detailed FAQs explaining the SPSL and the various obligations imposed on employers, and the poster explaining the law. Employers can satisfy their notice obligations by displaying the poster in a conspicuous place in the workplace and sending the poster via electronic means to employees who do not frequent the workplace.
Please feel free to reach out to your THRM consultants if you have any questions about these new benefits.