3 key employee benefits affected by the ARPA

The American Rescue Plan Act of 2021 (ARPA), recently signed by President Joe Biden, creates a number of changes and/or continuations of COVID-19 relief programs available to businesses and employees. Here are three main benefits matters HR should consider.

Pandemic unemployment assistance

Section 901(1) of the ARPA increases the period for extended unemployment relief to be made available to employees who were laid off or have lost their positions because of COVID-19. Previously set to expire in March 2021, the extension will now run through September 6, 2021, and has two main facets:

• It extends the number of weeks for which individuals can receive benefits from 24 to 53.
• It provides some safe harbors for accidental overpayments, which have already occurred.

Accidental payments have been dealt with on a state-by-state basis with varying approaches and results.

Under Section 901(1), benefits also are made available for the first week of unemployment in states that don’t make benefits immediately available. Also note, beginning in 2020, if the “adjusted gross income of the employee is less than $150,000, the gross income for taxes shall not include . . . unemployment compensation received by the taxpayer (or, in the case of a joint return, received by each spouse) that does not exceed $10,200.”

In other words, if you make less than $150,000 a year, $10,200 of the unemployment compensation is nontaxable.

COBRA