Schooling Roundup – The American Rescue Plan Act Concerns for Colleges: FFCRA Extension and Federal COBRA Subsidies

The American Rescue Plan Act (ARPA) has expanded employee benefits in two key areas: 1) employers with fewer than 500 employees can voluntarily extend vacation regulations under the Families First Coronavirus Response Act (FFCRA), and 2) federal COBRA subsidies . Schools should consider some key differences in the FFCRA when deciding whether to extend leave regulations and understand key compliance obligations under COBRA.

Major changes to the FFCRA

ARPA grants tax credits to educational institutions who voluntarily choose to extend FFCRA Vacation Benefits for Qualified Absences related to COVID-19. Employers receive a tax credit on the wages paid to employees for vacation taken from April 1, 2021 to September 30, 2021 for these additional reasons. Here are some key differences:

1. Schools may decide to extend vacation benefits for a shorter period (i.e. until June 30, 2021). In addition, employers have the option of extending paid sick leave (EPSL), family leave and medical leave (EFML), or both.
2. EPSL and EFML can now be used for additional reasons in addition to the qualifying reasons already given in the context of the FFCRA. The list of reasons for taking EPSL or EFML now includes:
   • Receive the COVID-19 vaccine;
   • To recover from a condition, illness, or disability related to the COVID-19 vaccine; and
   • Seek or wait for the results of a COVID-19 test or diagnosis.
3. If an employer extends the EPSL, the employees get a new bank with 10 days of vacation. However, any unused time from the first round of the EPSL will be forfeited. However, the ARPA does not provide additional time for the EFMLA. Employees are still limited to EFMLA for a total of 12 weeks, including all amounts used before April 1, 2021.
4. As part of the ARPA, the first 10 days of EFML are now paid out for a total of 12 paid weeks of EFMLA. The tax credit is still capped at $ 200 in qualifying wages per day for those additional days paid. Accordingly, schools are now eligible for tax credits on wages of up to $ 12,000 per employee for employees receiving paid EFML.
5. Schools that voluntarily offer FFCRA leave must grant leave to all workers without discriminating against certain categories of workers. The tax credit is not available to employers who discriminate in favor of highly paid workers. Full-time employees; or specific employees based on tenure.

Federal COBRA Subsidies

As part of the ARPA, the federal government will subsidize COBRA rewards for medical, dental and vision plans for certain eligible employees for six months from April 1, 2021 to September 30, 2021. The U.S. Department of Labor issued new sample COBRA releases on April 7, 2021, which can be found here. Employees are entitled to the grant if:

1. The employee was involuntarily terminated or the working hours were reduced AND
2. The employee was registered with COBRA at any time between April 1, 2021 and September 30, 2021 OR
3. The employee would be enrolled at COBRA from April 1, 2021 if they had chosen them at the time of the offer. These individuals must receive a second chance election notification.

Employees will no longer be eligible for the grant if they are eligible for coverage under another employer’s group health plan or Medicare. The subsidy does not extend an individual’s total COBRA coverage period.

Schools should speak to their COBRA administrators and ensure that individuals are informed on or before May 31, 2021 of the option to choose subsidized coverage. Individuals have 60 days from the date of termination to choose coverage. In addition, schools are required to provide individuals with a notice of the end of the Premium Support Period 15 to 45 days before the grant expires, which will notify the expiration date and inform the individual that they may be eligible for unsubsidized COBRA coverage or other group health coverage .