The American Rescue Plan Act of 2021: What You Need to Know

The COVID-19 pandemic caused devastation throughout the U.S., both through the immediate medical emergency as well as the corresponding economic crisis—leaving many Americans struggling to recover and return to financial “normalcy.” As the country attempts to recover from these hardships, the Biden administration has put emphasis on passing legislation designed to provide immediate and direct relief to working families in the form of the American Rescue plan.

The American Rescue Plan

These changes include the extension and expansion of the voluntary Families First Coronavirus Response Act (FFCRA) program tax credits, unemployment support, and COBRA, alongside many other business impacts.

Here’s an overview of some key updates:

1. The Pandemic Unemployment Assistance program and Pandemic Emergency Unemployment Compensation of $300 per week are both extended through September 6, 2021. The first $10,200 in unemployment received in 2020 will not be taxed for household incomes under $150,000.
2. While the mandatory FFCRA program ended on December 31, 2020, a voluntary FFCRA program still exists. This act allows the voluntary FFCRA program to begin again on April 1, 2021, through September 30, 2021. FFCRA Emergency Paid Sick Leave (EPSL) (100% pay) will provide ten (10) new days of leave and tax credits. Emergency Family Medical Leave (EFML) under FFCRA (2/3^rd % pay) also applies and can be used for all the same reasons as EPSL as well as the previous EFML reasons. Also, the act changed the EFML cumulative per-employee cap from $10,000 to $12,000. All 14 weeks (both EPSL & EFML) are eligible for tax credits.
3. FFCRA can also now be used for COVID-19 vaccination or recovery from any illness, disability, condition, or injury related to the vaccination and also for awaiting results of a diagnostic test or medical diagnosis for COVID-19. This includes employer-requested tests due to exposure.
4. A COBRA subsidy is also in place through September 30, 2021. This means that employees that are involuntarily terminated (with some exceptions) can receive COBRA at no cost to them. However, the employer will be reimbursed through tax credits as well.

Curi members can learn more about this and other components by listening to the 2021 HR|Experts webinar, titled “Understanding the American Rescue Plan of 2021.”