COVID: Congress Passes New, $1.9 Trillion Stimulus Package
On Wednesday, March 10, 2021, Congress passed new legislation dedicated to providing relief to Americans and industries during the COVID-19 pandemic. It is the first stimulus package to pass since December 2020 and is one of the most expensive pieces of legislation in American history. Find out what’s included in the bill and how it may impact your team.
Congress Passes New Covid Relief Package
Dubbed the American Rescue Plan Act of 2021 (ARPA) and first announced in January 2021, the new relief package is the culmination of President Biden’s efforts to pass legislation designed to assist Americans and industries that have been negatively impacted by the ongoing pandemic. President Biden signed the bill into law on Thursday, March 11.
The stimulus also arrives shortly after the president announced that the U.S. expects to have enough vaccines for all adults by May 2021. With this in mind, repercussions from the past 12-plus months will likely impact the national and global economy for years to come.
What’s Included in the Latest COVID-19 Stimulus Bill?
While not comprehensive, the new coronavirus stimulus package will include the following provisions:
- New Small Business Relief for Restaurants and Bars: According to reporting from NPR, the new stimulus includes $25 billion for a new Small Business Administration (SBA) grant program designed to help bars and restaurants that have been impacted by shutdowns, including a program that helps venues that were forced to close.
- Direct Payments: The bill includes another round of direct stimulus payments to qualifying Americans. This time around, payments can total up to $1,400 per person for families earning less than $160,000 per year and individuals earning less than $80,000 per year. Payments will begin to phase out for individuals making $75,000 and families making $150,000.
- Expanded and Enhanced Child Tax Credit: Qualifying households with children under the age of 6 can receive an annual child tax credit (CTC) of $3,600 per child and $3,000 per child between ages 6 and 17. The current CTC is $2,000 per child, per year. According to an article reported by CNET, the bill also adjusted how parents access the CTC. Now, families can receive the CTC funds in monthly installments versus one lump sum payment during tax season.
- Food Assistance: People who receive food assistance through the Supplemental Nutrition Assistance Program (SNAP) would receive a 15% increase in benefits through September 2021 (instead of expiring at the end of June 2021, per CBS New York).
- Expanded Unemployment Benefits: Federal unemployment benefits equaling $300 per week will be extended through Sept. 6, 2021.
- Rent Assistance: NPR reports that the bill authorizes approximately $25 billion to state and local governments “to help low-income households cover back rent” as well as utility bills and other rent assistance. Another $10 billion will be set aside to help homeowners pay their mortgages and other housing-related expenses. An additional $25 billion in rental assistance was included in the Consolidated Appropriations Act (2021), which passed in December 2020.
- Expanded Eligibility for ACA Subsidies: The legislation makes it easier for families to afford healthcare coverage through the Affordable Care Act (ACA) by ensuring that enrollees don’t spend more than 8.5% of their income on coverage (CNN reports that the current rate is nearly 10%). The bill also provides subsidies for qualifying lower-income enrollees to eliminate the cost of their premiums.
- COBRA Subsidy: CNBC reports that the bill subsidizes 100% of the cost of COBRA continuation coverage for laid-off workers through September 2021, making it easier for Americans to maintain health insurance while between jobs.
- Pandemic Relief: The bill will provide $350 billion for state, local, tribal, and territory governments to help fight the pandemic, including $130 billion for schools.
- Dependent Care FSA Limit Increase: ARPA temporarily increases the limits on dependent care FSAs for 2021. Now, single filers can contribute up to $5,250 (increased from $2,500) and married couples filing jointly can contribute up to $10,500 (increased from $5,000). Health FSA limits remain unchanged.
This blog will be updated as more information becomes available.
What Else Should Employers Know About the New Relief Package?
The new stimulus package is yet another sprawling piece of federal legislation passed during the COVID-19 pandemic. As such, many components of the bill may not impact certain employers or their staff at all. However, there are others—such as the new grant program to support restaurants and bars—that could directly impact your team and your company.
It’s imperative that employers and HR professionals stay on top of all the latest updates as they become available. Follow the BerniePortal Blog in the coming days and weeks to learn more about these important changes to federal law.
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