COVID-19, Employee Benefits Compliance

Biden COVID Relief Package “American Rescue Plan” —What’s In It?

Ahead of the Presidential inauguration, President-elect Joe Biden released his promised stimulus package. Intended to supplement the recent Emergency COVID-19 Relief Act of 2020, the $1.9 trillion economic rescue plan, called the American Rescue Plan, focuses on the economic impact of the COVID-19 national emergency.


While any stimulus package will require Congressional support and passage in both the House and Senate, razor thin Democratic control in both chambers could make it likely that some of these proposed provisions will make its way to law. However, the cost of this package is a concern for many in Congress. A debate on the details of this proposed plan is, therefore, imminent.

This article highlights the current state of the Biden plan. Keep in mind, any proposal is negotiated in Congress, resulting in different terms than what may be reflect here.

The provisions discussed herein are accurate as of the date of this writing.

Highlights of the Biden American Rescue Plan

Economic Relief for Individuals

  • Stimulus check to qualified individuals of $1,400
  • Increase the federal minimum wage to $15/hour
  • Extend emergency unemployment insurance programs through September 2021
    • Provide an unemployment insurance subsidy of an additional $400 per week
    • Extend and provide additional weeks of unemployment insurance
    • Extend unemployment to self-employed

Economic Relief for Entities

  • Small Business—A small business grant, along with lending and investing programs, will provide low-interest loan and equitable grants for small businesses
  • State and Local—Allocation of $3 billion of funding for the Economic Development Administration to provide resource directly to state and local government entities, tribal institutions, institutions of higher education and non-profit to fund economic development
  • Transit Agencies—$20 billion to keep agencies from laying off transit workers and cutting routes
  • Tribal Governments—Invest $20 billion in tribal governments to assist in the response to COVID-19


Biden calls on Congress to subsidize the health coverage workers are offered as continuation coverage (COBRA) where losing active employee coverage due to COVID-19. This subsidy would be offered through the end of September 2021. Details on what such a subsidy would look like, who pays for it and how much it would be are left unanswered at this stage of the legislative process.

The Biden proposal has no force in making Congress enact law based on his proposal. However, it is likely as there is bipartisan support for another COVID-19 relief package.

The Biden proposal also calls for Congress to expand and increase the value of the Premium Tax Credit (PTC) to lower or eliminate health insurance premiums. The proposal seeks to ensure individuals do not pay more than 8.5% of their income for their health insurance premium. The current Affordable Care Act (ACA) also includes a PTC of an indexed amount that originally started at 8.5% but is increased annually. It appears this proposal will seek to lower the amount an individual will pay for insurance in the Exchange Marketplace. There is no mention as to whether this affordability threshold would also affect the ACA Employer Shared Responsibility Mandate.

Child Tax Credits

  • For one-year, childcare tax credits will provide refundable tax credits for the childcare of children under age 13 of up to $4,000 for one child or $8,000 for two or more
  • Families making $125,000 -$400,000 will receive a partial credit; those with less than $125,000 will receive a full 50% reimbursement
  • Earned Income Tax Credits (EITC) will be raised for one year, in addition to raising the EITC for all individuals

Vaccine Program

Vaccines will be rolled-out with no cost-sharing in partnership with states, localities, Tribes and territories. The federal government will be more involved in distribution under the Biden proposal.

Health plans will be required to offer and pay the administration fee for the vaccinations. The federal government will pay for the cost of the vaccine.

OSHA Oversight

Increased Occupational Safety and Health Administration (OSHA) enforcement and guidance for worker protections. Employers can expect additional guidance to come.

School Reopening & Funding Plan

The Biden proposal includes calling on Congress to provide $170 billion –supplemented by additional state and local relief resources—for K-12 schools and institutions of higher education. These funds are intended to help schools with improved infrastructure, staff, mitigation measures and other initiatives that will help students get back into the classroom. In addition to this funding, schools will be able to access FEMA Disaster Relief Fund resources to get reimbursed for certain COVID-19 related expenses and will receive support to implement regular testing protocols.

Additional funding is proposed to assist in all level of education, from early childhood to higher education – see page 7 of the proposal for full details.

Paid Sick Leave

Last year’s Families First Coronavirus Response Act provided emergency paid sick leave and extended family medical leave for workers suffering from, caring for a family members suffering from, or quarantining due to, COVID-19. The recent Emergency COVID Relief Act of 2020 extended available tax credits to employers paying for the extended and additional paid leave until March 31, 2021. However, this Act did not extend the leave itself. The extension of the tax credits only provides financial credits for employers who voluntarily provide sick leave beyond December 31, 2020, not additional leave time.

The Biden plan puts back in place the paid sick leave and extended family medical leave provisions. In the proposal, there is no longer an exemption for employers with more than 500 and less than 50 employees. In addition:

  • Paid sick and family and medical leave of 14 weeks
  • Expand emergency paid leave to federal workers
  • Provide maximum paid leave benefit wage replacement of $1,400 per week for workers earning up to $73,000 annually
  • Reimburse employers with less than 500 employees 100% of the cost of this expanded paid leave by extending the refundable tax credit
  • Reimburse state and local governments for the cost of leave
  • Extend emergency paid leave measures until September 30, 2021


The Biden-Harris stimulus package is expensive. Expensive packages result in heavy debate in Congress, ensuring that the Biden proposal will not look the same once wrung through the legislative ringer.  Nevertheless, a glance at the Biden proposal does provide an eye into what the new administration’s focus may be – more money for state, local and tribal governments and more protections for workers and taxpayers. As these negotiations begin after January 20th, Leavitt Group will monitor provisions affecting health plans and employers. Be sure to partner with the Leavitt Group as we continue to analyze the proposal as it becomes a bill and then a law.

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