Employee Benefits & Executive Compensation. Regarding group health plans, ARPA-21 provides for temporary premium assistance for health plan continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) for certain "assistance eligible individuals" (AEIs). ARPA-21's COBRA-related provisions include a plan enrollment option under which plans may allow AEIs to elect to enroll in different health plan coverage. ARPA-21 also includes subsidies under the Affordable Care Act (ACA) so that individuals can maintain their health insurance during the COVID-19 pandemic. From an executive compensation perspective, ARPA-21 expands the definition of "covered employee" in Section 162(m) of the Internal Revenue Code. Under the current rule, covered employees include the principal executive officer (PEO), principal financial officer (PFO), and the three highest compensated officers (other than the PEO and PFO) whose compensation is required to be reported to shareholders under the Securities Exchange Act of 1934. Effective for taxable years beginning after December 31, 2026, the covered employee list will also include the company's five highest compensated employees for the year (other than those already picked up by the existing rule). While under the current rule, once an individual is a covered employee for a taxable year they remain a covered employee for all future taxable years, this "once a covered employee, always a covered employee" rule does not apply to the five additional employees added by ARPA-21. Regarding retirement plans, ARPA-21 provides funding relief for single-employer defined benefit plans by extending the amortization period for funding shortfalls from 7 to 15 years (beginning in 2022) and enhancing the stabilization corridors for interest rates (effective in 2020).

For more on ARPA-21's employee benefits and executive compensation provisions, see Legal Update, $1.9 Trillion COVID-19 Stimulus Legislation Includes COBRA Premium Assistance, Retirement Plan Funding Relief, and an Expansion of Covered Employees Under Section 162(m).

Labor & Employment. ARPA-21 extends (with some modification) many employment-related benefits provided under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) enacted in March 2020, as amended by the Consolidated Appropriations Act, 2021 (CAA-21). ARPA-21 also allows employers to continue to take tax credits for voluntarily provided qualifying paid sick and family leave under the Families First Coronavirus Response Act (FFCRA) through September 6, 2021 (but does not require employers to provide this leave). It also increases the per employee tax credit cap available for family leave from $10,000 to $12,000 and expands the reasons qualifying for leave to include COVID-19 testing and vaccination. In addition, ARPA-21: