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COVID-19 Update February 10, 2021

Today’s NAPEO Federal Affairs Committee call featured a highly ranked guest speaker from the US Chamber of Commerce who shared some inside information about what’s going on in DC. In his recent meeting with President Biden and his staff, they discussed his administration’s agenda for the business community and reviewed some of the ways in which the chamber could help to accomplish them.

The guest speaker then went on to share his own personal thoughts about Biden’s first week in office. He seemed less optimistic about the overall morale, noting that much of what has passed so far has been through the use of executive orders or reconciliation bills, inherently lacking a bipartisan approach in governance. Thus, he feels that if they had started with an olive branch to begin with, it won’t be as difficult to get things done on a bipartisan basis moving forward.

If you’re less familiar with reconciliation bills, this process does not allow for new legislation to be added and is mainly for budgetary adjustments, so only changes in items like appropriations, entitlements, and/or taxes are allowed in this type of bill. Accordingly, the $1.9 trillion stimulus/relief package that was passed through this process was open to negotiation on how it will be spent, while the other issues like immigration will need a larger margin to pass in both the House and the Senate. The good news is that since Congress is so narrowly divided, there is a very low margin for victory on a 50-50 split in the Senate and a 4-vote advantage in the House, which may force them to work together on a bipartisan level to get things passed.

Furthermore, the latest stimulus bill is currently in the appropriations committees to decide exactly how to divvy up the money. That being said, the following information is just speculation as this is just what’s on the table and is subject to change.

First, there will be another round of stimulus checks, and as of now, the amount is $1,400 per family member that meets certain criteria, including income level. Both husband and wife would each get a check, as well as children if they qualify. There also may be childcare credits as part of the package – up to $200-300 dollars per child per month for the balance of 2021. Lots of changes to cafeteria plans including flex plans, HAS’s, etc., along with changes to retirement plans like 401k, as well.

Additionally, a large subsidy for Cobra and credits for the health insurance exchange for single employee groups or unemployed people will be included in the package. These changes would go into effect starting the following month, so if it clears in February, then effective March 1st, 2021 these subsidies would start. They are looking at an 85% subsidy and the employee will only be required to pay 15%. Which leads us to ask who and how does this credit for the 85% gets passed along? Does it go straight to the insurance carrier? Does it go through the employer? If it goes through the employer, does that make it the employer’s responsibility to pay it and then request the money back through payroll taxes? Lots to figure out on this one, but it does look like it will be part of the act. This has an ending date of September 30th, 2021 if and when it passes.

Moreover, anyone that has lost their job due to COVID-19 and/or did not leave their job voluntarily in the past 18 months would be eligible for Cobra at these rates, which will be a nightmare to manage. If the employee opts in for this back-dated coverage, they would be responsible for paying their 15% share for however many months they need it backdated for eligibility. How this will affect doctors and hospitals that asked these people to pay for treatment and now can go back to a carrier for reimbursement? How will the employee get their money back?

This was a high-level overview, so please keep in mind this is all still a work in progress. If you’d like to read the fine print, here are the four main committees and their corresponding documentation:

Lastly, SHRM released compliance tips for employers who are struggling to keep up with COVID-19 testing guidelines at the federal, state, and local levels. President Biden is clearly pushing for more testing and has signed a number of relative executive orders.

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