Compliance News | January 20, 2021

Biden’s Initial Actions Affecting Health, HR and Benefits

President Biden has released a summary of his American Rescue Plan, an emergency legislative package to address the COVID-19 pandemic and the economic devastation it has created. The full plan may not be acted on by Congress for several weeks, so the administration is also expected to introduce other short-term measures in the interim.

In addition, Ron Klain, President Biden’s chief of staff, announced the administration’s intention to issue several Executive Orders during the first 10 days in office. The topics are wide-ranging and address both revisions of the previous administration’s Executive Orders and new rules designed to address the current crisis.

Business Colleagues Wearing Protective Masks Talking Meeting In City

The plan's key points

The plan has several important provisions related to employment, public health and benefits, including:

  • Creation of a national COVID-19 vaccination program
  • Increase in the minimum wage
  • Restart the CARES Act emergency leave programs
  • Additional support for child care
  • Extension of unemployment compensation benefits
  • Subsidized continuation of health coverage under COBRA

The American Rescue Plan's contents

The American Rescue Plan, a summary of which was released on January 14, 2021, could take effect in several ways.

The new Democratic leadership in Congress intends to use the regular legislative process, negotiate with Republicans and pass a package with a 60-vote majority in the Senate.

However, if that course of action is unsuccessful, other options could include changing the filibuster rule or passing financial-related portions of the package through budget reconciliation.

National COVID-19 vaccination program and more money for testing

The plan would invest $20 billion in a national vaccination program in partnership with state, local and tribal governments.

It would also earmark $50 billion for a massive expansion of testing for COVID-19.

Pay provisions

The minimum wage would be increased to $15 per hour.

Additionally, employers would be required to provide back hazard pay for frontline essential workers.

Restart CARES Act emergency leave programs

The CARES Act emergency leave programs expired at the end of December 2020. The American Rescue Plan would extend these programs through September 2021. Moreover, requirements to offer emergency leave would be expanded to all employers (not just those with under 500 employees) and would include federal workers.

Employees would be entitled to 14 weeks of paid sick leave and emergency family and medical leave with a maximum paid leave benefit of $1,400 per week. Employers would be entitled to a refundable tax credit and state and local governments would be reimbursed for the cost of the leave.

Additional support for child care

This support would include expanding child care tax credits for one year. The refundable tax credit would be available for child care for children under 13 up to $4,000 for one child or $8,000 for two or more children. It would be available in full to families earning less than $125,000 per year.

Extended unemployment compensation benefits

The extension of unemployment compensation benefits would apply to workers in the gig economy.

COBRA subsidy and other health coverage assistance

The American Rescue Plan would subsidize COBRA coverage through the end of September 2021. The amount of the subsidy is not mentioned in the summary of the plan.

In addition, the plan would increase the value of the ACA’s Premium Assistance Tax Credit for low-income individuals who purchase coverage on the federal Marketplace or a state Exchange.

Assistance for education

The American Rescue Plan would provide significant funding to help K-12 schools and higher education institutions reopen safely.

Anticipated Executive Orders and other actions

These actions are expected:

  • Day 1 (Inauguration Day) — Among President Biden’s first 17 Executive Orders will be to require masks be worn on federal property and during interstate travel.
  • January 21 — President Biden will sign Executive Orders to address the COVID-19 crisis.
  • January 22 — Federal agencies will take actions to deliver economic relief to working families bearing the brunt of the crisis.
  • January 25–February 1 — President Biden will take steps to expand access to healthcare.

The administration has also announced a list of agency actions that will be reviewed in light of the President’s Executive Order concerning “protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis.” The DOL will be reviewing “Financial Factors in Selecting Plan Investments,” the recently finalized guidance on environmental, social and governance investments.

We’ll keep you informed

As details about the American Rescue Plan and Executive Branch actions are released, we’ll let you know.

Have questions about these developments?

We have answers.

We value your privacy. We'll never share your data with anybody.

See more insights

Busy Young Woman Working At Her Desk

IRS Changes Determination Letter Program; Asks for Comments

Learn more about the determination letter program and how the changes might affect your plans.
Three Business People Having A Meeting At The Modern Office

Impact on Plan Sponsors of Higher IRS Retirement Plan Limits

The 2023 retirement plan limits announced by the IRS reflect large increases. Learn more.
Business Meeting For Merger Or Acquisition

A Company’s Playbook Transformed its Acquisition Experience

How to stay focused on the human aspects of an acquisition

This page is for informational purposes only and does not constitute legal, tax or investment advice. You are encouraged to discuss the issues raised here with your legal, tax and other advisors before determining how the issues apply to your specific situations.

Don't miss out. Join 16,000 others who already get the latest insights from Segal.