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Employee Benefits New Relief Package Grants Free COBRA Coverage for Qualifying EmployeesOne of the many lifelines for workers in the American Rescue Plan Act of 2021 (ARPA) is a new COBRA subsidy that completely covers the cost of continuation coverage for qualifying individuals from April 2021 through September 2021. Here’s what you need to know about this important health insurance assistance.

What is the COBRA Subsidy that Just Became Law?
The new Biden administration hopes to make it easier for people to access this essential healthcare. With the March 2021 passage of ARPA, the administration stepped in to subsidize the full cost of COBRA coverage through the end of September 2021.

But, why pass this subsidy now?
When a person is employed, a portion of their health insurance premium is often paid for by the employer. But, if someone is laid off or has their hours cut—as many millions of Americans experienced during the course of coronavirus pandemic—and they decide to opt to continue coverage under COBRA, they’re typically responsible for the full cost of the health insurance premium.

The amount charged for COBRA coverage can’t exceed 102% of the cost of the plan, but temporary health insurance is often more difficult to buy without a steady income—and costs can reach nearly $500 per person, per month. These complications are what make the new COBRA subsidy so important, as it’s designed to provide key assistance for struggling workers.

COBRA Subsidy 2021 Eligibility
Every employee who involuntarily loses their health insurance beginning in April 2021 is eligible for the entire sixth-month subsidy—including if they experienced a reduction in hours. Employers and employees alike should note that the subsidy only covers the cost of the health insurance premiums, not copays, deductibles, or co-insurance.

How Will the 2021 COBRA Subsidy Help Employees and Employers?
The 2021 COBRA subsidy is likely to impact both employees and employers in the following ways:

  • For employees, this provision can help qualifying individuals maintain health plan coverage—especially important during a dangerous pandemic.
  • For employers, laid-off employees would still have access to the organization’s health plan at no cost to the employer or the worker. However, there may be some administrative difficulties for employers administering the subsidy.

Experts are still working through the details of the bill and its many provisions. In an article published by SHRM, the publication notes that the subsidy will be delivered to employers first using a payroll tax credit, who will then pass it on to employees (or former employees) who are enrolled in COBRA.

What Else Should Employers Know About Free COBRA Coverage?
The ink on ARPA is still fresh, meaning that employers can expect more guidance from federal agencies as it becomes available.

With this in mind, the coverage period for this subsidy begins on April 1, 2021, and ends on Sept. 30, 2021. Employers must notify their employees about this subsidy beginning April 1, and can expect the Department of Labor (DOL) to provide sample notification letters for employers to use when communicating these options to their employees.

 

Ryan Laude is a Client Advisor at Gulfshore Insurance specializing in employee benefits. Ryan works with a wide range of businesses to create the best funding options that fit their needs. Comments and questions are welcome at rlaude@gulfshoreinsurance.com

Gulfshore Insurance is a Naples, Florida based insurance agency specializing in employee benefits insurance including group medical, dental, vision, life insurance, short and long term disability, voluntary life, employee assistance programs, wellness programs, individual life insurance, and more. Our insurance and risk management advisors are experts can provide valuable services including benefits plan design and administration, human resources support, funding options, compliance assistance, benefit administration, and enrollment services. Gulfshore Insurance services Naples, North Naples, Marco Island, Bonita Springs, Fort Myers, and Southwest Florida. We have office locations in Naples, Fort Myers, Fort Lauderdale, and Sarasota.

Commercial Lines Changes to PPP Help Small BusinessesThe Paycheck Protection Program (PPP) was created in 2020 to provide financial assistance to businesses affected by the pandemic. The loans do not have to be paid back if a business complies with the program’s rules.

Several recent changes to the PPP loan program are intended to help small businesses qualify for these loans:

  1. PPP applications limited to small businesses and sole proprietors for two weeks. From February 24th to March 9th, banks may only accept and process PPP loan applications from businesses with 20 or fewer employees. This change is intended to allow lenders to focus on smaller businesses needing a loan. If your business did not receive a PPP loan in 2020, you can apply for your first PPP loan now.  If your business did receive a PPP loan last year, you can apply for a second PPP loan, but you must show that your business had a 25% reduction in gross receipts from 2019 to 2020. Contact your bank to apply for a PPP loan –most banks are requiring that you have a business account already established with them before they will work with you on a PPP loan.  To find a lender in your area, you can use the Small Business Administration’s tool to find lenders in your area by clicking here.
  2. New loan formula for a sole proprietor/self-employed/independent contractor. The amount these businesses were eligible for previously was based on their annual profit, which severely limited the amount of their loan.  But the new criteria will focus on gross income before expenses are deducted to help increase the amount of the loan these businesses are eligible to receive.
  3. Expanded eligibility to apply for a loan. Non-citizen business owners who are lawful U.S. residents may now apply for a PPP loan using their Individual Tax Identification Number (ITIN). Also, business owners with felony convictions and delinquent federal student loans may apply. Businesses with more than 20 employees will be able to resume applying for a PPP loan after March 10th until the PPP loan program ends on March 31st.

Click here for more information. We will continue to share information as it becomes available and keep you informed.

 

Ryan Schmidt is a Client Advisor and Partner with Gulfshore Insurance. Ryan specializes in working with commercial clients. Comments and questions are welcome at rschmidt@gulfshoreinsurance.com.

Gulfshore Insurance is a Naples, Florida based insurance agency specializing in business insurance including liability insurance, property insurance, workers compensation insurance, vehicle insurance, business income interruption insurance, cyber insurance, commercial umbrella insurance, and more. Our insurance and risk management advisors are industry specialists for condominium associations, golf and country clubs, oil and petroleum marketers, construction, landscaping, churches and non-profits, and work comp. Navigating insurance requires an experienced and trusted insurance agent who understands your business risks and exposures. Gulfshore Insurance services Naples, North Naples, Marco Island, Bonita Springs, Fort Myers, Sarasota, Lido Beach, Longboat Key, Bradenton Beach, and Southwest Florida. We have office locations in Naples, Fort Myers, Fort Lauderdale, and Sarasota.

Employee Benefits OSHA Issues New COVID 19 Worker Protections After Executive OrderIn response to one of many executive orders signed by President Biden, OSHA recently issued new COVID-19 workplace guidelines to keep employees safe during the pandemic. Find out what HR teams should know about this incoming set of regulations.

How Does the Occupational Safety and Health Administration (OSHA) Protect Workers?
The Occupational Safety and Health Administration (OSHA) is an agency of the U.S. government under the Department of Labor (DOL). OSHA’s mission is to aid in the prevention of work-related injuries, illnesses, and deaths. Employers are required to adhere to certain OSHA regulations that ensure compliance with these goals, including record-keeping for on-the-job injuries and illnesses and providing a hazard-free workplace.

These objectives have been put to the test during the coronavirus pandemic. Between providing personal protective equipment (PPE), working remotely, and enforcing social distancing measures, many employers have struggled to keep up with the guidelines that help keep employees safe from COVID-19. As a result, pandemic-related lawsuits against American employers are on the rise.

OSHA Issues New COVID-19 Guidance in 2021
On Jan. 21, 2021, President Biden signed an executive order that directs OSHA to provide more COVID-19 safety guidelines. On Jan. 29, 2021, OSHA released these new regulation guidelines on its website.

Many of the components of this guidance remain consistent with previously released recommendations:

  1. Making a COVID-19 Vaccine/Vaccine Series Available at No Cost to All Eligible Employees: Including providing information and training about the safety and benefits of vaccinations.
  2. Maintaining Safety Standards Despite Employee Vaccination Status: Workers who are vaccinated should still follow protective measures like mask-wearing until more evidence about post-vaccination transmission is available.
  3. Providing Masks to Employees: Face coverings should be provided at no cost to the employee, among other recommended guidelines.
  4. Continue Offering FFCRA Leave: While still available through March 31, 2021, FFCRA leave is no longer mandatory. With this said, employers that do offer voluntary FFCRA leave are eligible for a tax credit to cover costs related to employee time off.
  5. Providing Guidance About Screening and Testing: Employers should follow state or local guidance and priorities for screening and testing in workplaces. Workplace testing can be arranged through the employer’s health provider or in coordination with the local or state health department.

 For the full list of guidance, visit osha.gov.

OSHA Considering Emergency Temporary COVID-19 Standards for 2021
The executive order also mandates OSHA to determine the necessity of new emergency temporary safety standards for the workplace and implement and enforce these measures if applicable. New emergency standards are required to be issued by March 15, 2021.

There is a difference between OSHA guidance and emergency temporary standards. The former constitutes a set of recommended guidelines for employers while the latter includes rules that must be followed by employers—and is enforceable by OSHA. While not yet released, temporary, enforceable directives could include:

  1. Requiring mask-wearing in the workplace; and
  2. Making short-, medium-, and long-term changes to better protect employees on the job and ensure equity in enforcement.

What Else Should HR Know About New OSHA Requirements for Employers? The same executive order stated that it will launch a new national program to focus OSHA coronavirus enforcement efforts on violations that put the largest number of employees at serious risk. While little is known about the program at this time, the refocused enforcement initiative is likely to impact larger employers and industries on the frontline of the pandemic, including healthcare workers, food supply workers, and more.

HR professionals should stay on top of the two deadlines set by the Biden administration and adjust practices accordingly. As a reminder, these dates include: 

    • New OSHA Guidance: Issued on Friday, Jan. 29, 2021
    • New  Emergency Temporary Standards: By Monday, March 15, 2021

 

We will continue to share information as it becomes available and keep you informed.

Gulfshore Insurance is a Naples, Florida based insurance agency specializing in employee benefits insurance including group medical, dental, vision, life insurance, short and long term disability, voluntary life, employee assistance programs, wellness programs, individual life insurance, and more. Our insurance and risk management advisors are experts can provide valuable services including benefits plan design and administration, human resources support, funding options, compliance assistance, benefit administration, and enrollment services. Gulfshore Insurance services Naples, North Naples, Marco Island, Bonita Springs, Fort Myers, and Southwest Florida. We have office locations in Naples, Fort Myers, Fort Lauderdale, and Sarasota.

The following is a summary of recently released COVID-19 information as of January 6, 2021

GENERAL COVID Updates 2021 01New Simplified Forgiveness Process Approved For PPP Loans Under $150,000
The United States Congress has approved a new law that will simplify the forgiveness process for businesses with PPP loans under $150,000. While these smaller PPP loans will not be automatically forgiven as many had hoped, the process of getting the loan forgiven has been made a lot easier.

The new forgiveness process for loans under $150,000 will be a one-page application where you list your loan amount, the number of employees your business was able to retain because of the loan, and the estimated amount of the PPP loan that your business spent on payroll costs. No further documentation will be required, but it is recommended that businesses retain supporting documentation for 3 years.

Update On Deductibility Of Business Expenses And PPP Loans
While PPP loan forgiveness is not taxable income for federal income tax, the IRS had taken the position that expenses paid for with a forgiven PPP loan would not be deductible as a business expense. Normally, a business can deduct amounts it spends on business expenses (like payroll) from its taxable income. Under the IRS ruling, businesses would not be able to take a deduction for business expenses paid for with their PPP loan, which meant that businesses would pay more in federal tax for 2020.

Thankfully, the new law that Congress passed at the end of 2020 overturns this IRS ruling and fixes this situation. Under the new law, regular business expenses paid for with PPP loans will be deductible for tax purposes.

Employee Paid Leave For COVID Has Ended
Early in the pandemic, the United States Congress passed a law that required employers to provide two weeks (up to 10 weeks in certain circumstances) of paid leave from work for employees dealing with COVID. This law, called the Families First Coronavirus Response Act (FFCRA), expired at the end of 2020. Congress did not choose to renew the paid leave law at the end of the year, so employers are no longer required to provide paid COVID-related leave under the FFCRA to their employees.

While this COVID-related paid leave is no longer required, employers may voluntarily choose to offer their employees paid COVID-related time off from work and receive tax credits for any paid leave they provide. Employees are still entitled to only 80 hours of leave, so employers cannot take tax credits for leave provided to employees who have already taken their 80 hours of paid leave.

Second Round Of PPP Loans Will Be Available For Businesses
A second round of PPP loans will be available soon for businesses that have spent their first PPP loan. To qualify, businesses must demonstrate that they had a 25% reduction in gross revenues in the first, second, or third quarter of 2020 as compared to the same quarter of 2019. These businesses will be eligible for a second PPP loan, even if they already received a PPP loan in 2020.

The maximum loan amount of the second PPP loan is 2.5 times your average monthly payroll costs in the year prior to the loan. Businesses in the food service and hotel/motel industries can receive up to 3.5 times their average monthly payroll costs.

Like the first round of PPP loans, these new PPP loans are entirely forgivable (you do not have to pay them back) if you spend at least 60% of the loan on payroll costs. And the list of allowable payroll expenses has been expanded to include group health payments made by employers for vision, dental, disability, and life insurance for their employees. Other new allowable expenses are:

  • Operations expenses like software, cloud computing, and other human resources and accounting costs
  • Personal protective equipment provided to employees
  • Technology expenses
  • Supplier costs for goods that are essential to your operations
  • Property damage

Like the original PPP loans, the amount of your second PPP loan that can be forgiven will be reduced if you reduce the number of your employees or their salaries.

If you are interested in applying for a second PPP loan, you should contact your bank to ask if they are going to participate in the second round of PPP loans.

Reminder: Florida Minimum Wage Increased
The Florida minimum wage increased on January 1, 2021 from $8.56 an hour to $8.65 an hour. The minimum cash wage for tipped employees also went up, from $5.54 an hour to $5.63 an hour. Florida law requires employers to post a Florida-specific minimum wage poster at their place of business.

State Sales Tax Rate On Commercial Rent Will Not Change In 2021
In Florida, businesses that rent their offices/locations (including retail space) are required to pay sales tax on the amount of their lease. After decreasing each of the last several years, the tax rate charged on business rent for 2021 will stay at the 2020 rate, which is 5.5% (plus additional local sales tax).

We will continue to keep you updated as more information becomes available. If you have any questions, please reach out to your account manager.

Gulfshore Insurance is a Naples, Florida based insurance agency specializing in employee benefits insurance including group medical, dental, vision, life insurance, short and long term disability, voluntary life, employee assistance programs, wellness programs, individual life insurance, and more. Our insurance and risk management advisors are experts can provide valuable services including benefits plan design and administration, human resources support, funding options, compliance assistance, benefit administration, and enrollment services. Gulfshore Insurance services Naples, North Naples, Marco Island, Bonita Springs, Fort Myers, and Southwest Florida. We have office locations in Naples, Fort Myers, Fort Lauderdale, and Sarasota.

Understanding the Stimulus PackageOn Sunday, Dec. 27, 2020, President Donald Trump signed into law an emergency stimulus package designed to deliver approximately $900 billion in COVID-19-related aid. This bill was passed by Congress after months of negotiation, and was attached to a $1.4 trillion spending package that will keep the government open for the fiscal year. Notably, this bill provides funding for unemployment benefits, small businesses, direct economic payments to individuals, vaccine distribution and rental assistance.

Unemployment Benefits Funding and Extension
The bill includes funding for unemployment benefits for out-of-work Americans. Specifically, this bill allows unemployed Americans to receive $300 per week in federal funding in addition to the existing unemployment aid they may be collecting from their state, if those state-level benefits have not already run out. The additional unemployment benefits and extensions included within this bill would provide aid for 11 weeks from their expiration at the end of December 2020 through at least March 14, 2021.

Initial COVID-19 relief for unemployment benefits was introduced by the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was enacted on March 27, 2020. The CARES Act provided funding for states to waive any waiting week requirements for unemployment income (UI) benefits during the COVID-19 pandemic and to provide an additional $600 per week to all individuals receiving UI benefits for weeks of unemployment ending before July 31, 2020. President Trump signed a memorandum to extend a portion of unemployment wages after the initial $600 per week expired.

Additionally, the bill includes an extension of Pandemic Unemployment Assistance (PUA). PUA is a program that allows workers who are not traditionally eligible to receive unemployment benefits, including self-employed and gig workers, to do so. An 11-week extension in base benefits through this program is also included within the bill. 

Aid for Businesses
The bill includes approximately $325 billion in funding to the Small Business Administration (SBA) to assist U.S. businesses that have been affected by the COVID-19 pandemic.

Specifically, the bill allocates $284 billion in funding to replenish the Paycheck Protection Program (PPP), which provides forgivable small business loans to eligible applicants. Under the bill, certain firms that had already applied for, received and exhausted PPP funds will be eligible to apply for another PPP loan. To be eligible for a second PPP loan, a small business must have less than 300 employees and have sustained at least a 25% loss in revenue during any quarter of 2020 when compared to the same quarter in 2019. Additionally, small 501(c)(6) organizations with 150 or fewer employees that are not lobbying organizations would be eligible for a PPP loan with this round of funding.

The bill also provides the following with regard to the PPP:

  • Expansion of expenses eligible for loan forgiveness to include supplier costs and investment costs related to modifying facilities and obtaining personal protective equipment for safety
  • Simplified loan forgiveness process for businesses that have borrowed $150,000 or less in PPP loans
  • Confirmation that business expenses paid for with PPP loan funds are tax deductible

Businesses interested in applying for a PPP loan should contact their lender for more information.
The bill also directs $15 billion in funding for independent live-venue operators affected by COVID-19 and another $20 billion for small business grants.

Direct Economic Impact Payments
The bill includes another round of economic impact payments—commonly referred to as stimulus checks. The CARES Act provided the first round of stimulus checks for eligible Americans. Under the CARES Act, tax filers with an adjusted gross income of up to $75,000 for individuals and up to $150,000 for married couples filing joint returns were eligible to receive the full payment of $1,200 per individual or $2,400 per married couple. Parents were also eligible to receive $500 for each qualifying child.

The bill follows the same eligibility guidelines as the CARES Act, but the amount of the stimulus check is less this time around. Instead of being eligible for a $1,200 payment, qualifying taxpayers are eligible for a payment of $600 per individual or $1,200 per married couple. Parents will also be eligible to receive $600 for each qualifying child.

Other Provisions Included in the Bill
The bipartisan bill provides funding for a variety of other issues, including:

  • U.S. Postal Service—$10 billion
  • Health Care Provider Relief Fund—$35 billion
  • COVID-19 Testing and Tracing and Vaccine Distribution—$69 billion
  • Transportation Industry Relief (Airlines, Airports, Buses, Transit and Amtrak)—$45 billion
  • Education—$82 billion
  • Housing Assistance (Rental)—$25 billion
    • Additionally, the bill extends the federal moratorium on evictions until the end of January 2021.

Another provision included in the bill is a ban on surprise medical bills—to help protect insured patients from large medical bills when they unknowingly receive out-of-network care. The bill also includes enhanced tax credits, including the employee retention tax credit for employers that keep employees on payroll and provide paid sick leave. Under the bill, the earned income tax credit and child tax credit would become available to those who lost wages or their jobs during the COVID-19 pandemic, and expand the low-income housing tax credit.

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We will continue to share information as it becomes available and keep you informed.

Gulfshore Insurance is a Naples, Florida based insurance agency specializing in employee benefits insurance including group medical, dental, vision, life insurance, short and long term disability, voluntary life, employee assistance programs, wellness programs, individual life insurance, and more. Our insurance and risk management advisors are experts can provide valuable services including benefits plan design and administration, human resources support, funding options, compliance assistance, benefit administration, and enrollment services. Gulfshore Insurance services Naples, North Naples, Marco Island, Bonita Springs, Fort Myers, and Southwest Florida. We have office locations in Naples, Fort Myers, Fort Lauderdale, and Sarasota.