Where things stand with the FFCRA tax credits; the new COBRA subsidy.
As the pandemic (hopefully) continues to wind down, we have continued to field questions regarding paid leave for COVID-19 related reasons, and whether that leave might be reimbursable to the employer. The short answer is that reimbursement remains a possibility.
Readers of our bulletins may recall that the Families First Coronavirus Response Act (FFCRA) required the provision of certain paid leave, which if properly documented would be reimbursed to the employer dollar-for-dollar via a credit on payroll taxes. Readers also may recall that the Federal requirements to provide paid leave expired on December 31, 2020.
The bottom line at the current time is that, per the American Rescue Plan Act (ARPA) signed by President Biden earlier this year, employers with fewer than 500 employees still may voluntarily provide FFCRA leave, and the tax credit lives on. That will be the case through September 30, 2021, and applies to wages paid between April 1 and September 30. (FFCRA leave provided between January 1 and March 30 was treated slightly differently; for purposes of this bulletin, we are addressing only the current time.)
The original six reasons why FFCRA leave may be provided are unchanged – specifically, that the employee is unable to work, including telework, because the employee:
Is subject to a Federal, State, or local quarantine or isolation order related to COVID-19;
Has been advised by a health care provider to self-quarantine related to COVID-19;
Is experiencing COVID-19 symptoms and is seeking a medical diagnosis;
Is caring for an individual subject to an order described in (1) or self-quarantine as described in (2);
Is caring for his or her child whose school or place of care is closed (or child care provider is unavailable) due to COVID-19 related reasons; or
Is experiencing any other substantially-similar condition specified by the U.S. Department of Health and Human Services.
The ARPA has added three additional reasons:
The employee is obtaining a COVID-19 vaccine;
The employee is recovering from an illness or complications related to having obtained a COVID-19 vaccine;
The employee is seeking or awaiting the results of a diagnostic test or medical diagnosis regarding COVID-19, when the employee has been exposed or the employer has requested the test of diagnosis.
Please note that while the various reasons for FFCRA leave previously were grouped into Emergency Paid Sick Leave and Emergency Family Medical Leave, the ARPA essentially has dissolved the distinction and has consolidated the reasons for leave for purposes of the amount of leave available (generally up to 12 weeks). That said, there still are distinctions among types and amounts of leave for purposes of the amount of the allowable tax credit.
Separately, the six-month COBRA subsidy period provided under the ARPA started on April 1. The U.S. Department of Labor has published information to help employers comply with the subsidy rules, including information on how to claim the associated tax credit and updated model COBRA forms, here: https://www.dol.gov/agencies/ebsa/laws-and-regulations/laws/cobra/premium-subsidy-for-employers-and-advisers.