The Washington Report
September 15, 2021
White House Announces “Path Out of the Pandemic” Plan; Includes Provision Requiring Employers With More Than 100 Employees to Have Vaccinated Workforce or Test Employees Weekly
On September 9, 2021, President Biden announced his six-pronged national strategy to address the ongoing COVID-19 pandemic. The White House “Path Out of the Pandemic Plan” addresses and includes the following provisions:
Vaccinating the Unvaccinated: Requiring all employers with more than 100 employees to ensure their workers are vaccinated or tested weekly, requiring vaccination for all federal workers and contractors, requiring vaccinations for health care workers at Medicare- and Medicaid-participating hospitals and other health care settings, calling on large entertainment venues to require proof of vaccination or testing for entry, and requiring employers to provide paid time off to get vaccinated.
Further Protecting the Vaccinated: Providing early access for booster shots and ensuring people know where to receive a booster.
Keeping Schools Safely Open: Requiring certain staff to be vaccinated, calling on all states to adopt vaccine requirements for all employees, providing additional funding to school districts for safe reopening, protecting students’ access to in-person instruction, getting students and staff tested regularly, and providing resources to the Food and Drug Administration to support timely review of vaccines for individuals under the age of 12.
Increasing Testing and Requiring Masking: Mobilizing industry to expand easy-to-use testing production, making at-home tests more affordable, sending free rapid at-home tests to food banks and community health centers, expanding free pharmacy testing, continuing to require masking for interstate travel and doubling fines, continuing to require masking on federal property.
Protecting the Economic Recovery: Providing new support for small businesses impacted by COVID-19, streamlining the Paycheck Protection Program Loan Forgiveness process, and launching the Community Navigator Program.
Improving Care for Those With COVID-19: Increasing support for hospitals, increasing access to monoclonal antibody treatment, and expanding the pool of health care professionals providing treatment by deploying federal monoclonal antibody strike teams.
Please note that the above information only provides a high-level summary of the relief provisions. Please refer to the website for additional information.
The Aon bulletin, President Biden’s Vaccine Mandate—What It Means for Employers, is available in the Publications section of this newsletter.
The White House “Path Out of the Pandemic” website is available here.
President Biden Signs Two EOs Requiring COVID-19 Vaccination for Federal Contractors and Employees
On the same day the “Path Out of the Pandemic Plan” was announced, President Biden also signed two Executive Orders (EOs) requiring federal contractors and executive federal branch employees to be vaccinated against COVID-19.
The EO on Ensuring Adequate COVID Safety Protocols for Federal Contractors is available here.
The EO on Requiring Coronavirus Disease 2019 Vaccination for Federal Employees is available here.
IRS Reminds Taxpayers That the Cost of Home Testing for COVID-19 Is Eligible Medical Expense; Reimbursable Under FSAs, HSAs
On September 10, 2021, the Internal Revenue Service (IRS) reminded taxpayers in a news release (IR-2021-181) that the cost of home testing for COVID-19 is an eligible medical expense that can be paid or reimbursed under health flexible spending arrangements (health FSAs), health savings accounts (HSAs), health reimbursement arrangements (HRAs), or Archer medical savings accounts (Archer MSAs). That is because the cost to diagnose COVID-19 is an eligible medical expense for tax purposes. In the same release, the IRS again stated that the costs of personal protective equipment, such as masks, hand sanitizer and sanitizing wipes, for the primary purpose of preventing the spread of COVID-19 are also eligible medical expenses that can be paid or reimbursed under health FSAs, HSAs, HRAs, or Archer MSAs (as outlined in Announcement 2021-07, released on March 26, 2021).
The IR-2021-181 news release is available here.
IRS Announcement 2021-07 (March 26, 2021) is available here.
HHS Announces Proposal to Lower Prescription Drug Costs
On September 9, 2021, the Department of Health and Human Services (HHS) announced a plan to lower drug prices. “The Drug Pricing Plan is part of a broader initiative stemming from President Joe Biden’s Executive Order on Promoting Competition in the American Economy, which also created the White House Competition Council tasked with coordinating, promoting, and advancing Federal Government efforts to address overconcentration, monopolization, and unfair competition in or directly affecting the American economy.” The report (Comprehensive Plan for Addressing High Drug Prices: A Report in Response to the Executive Order on Competition in the American Economy) released by HHS is guided by the “Administration’s principles for equitable drug pricing reform through competition, innovation, and transparency.”
The news release is available here.
The HHS report: Comprehensive Plan for Addressing High Drug Prices: A Report in Response to the Executive Order on Competition in the American Economy, is available here.
CMS Will Provide States Additional Funding to Lower Health Coverage Costs Through ARPA
On September 7, 2021, HHS announced it is distributing an additional $452 million in federal funding through the Centers for Medicare & Medicaid Services (CMS) to support 13 states’ efforts to improve access to affordable, comprehensive health insurance coverage through Section 1332 state-based reinsurance waivers. As a result of changes made in the American Rescue Plan Act of 2021 (ARPA), “residents in states implementing reinsurance waivers may have access to more affordable health insurance coverage. States will also have more pass-through funding to implement their waiver, and they may also have their own state funding—that otherwise might have been spent on 2021 reinsurance costs—available to pursue innovative state strategies to further improve affordability.”
The news release is available here.
IRS Publishes Revenue Procedures on Pre-Approved Pension Plans
On September 1, 2021, the Internal Revenue Service (IRS) published two Revenue Procedures on pre-approved pension plans (Revenue Procedure 2021-37 and Revenue Procedure 2021-38).
Revenue Procedure 2021-37 sets forth the procedures of the IRS for issuing opinion letters regarding the satisfaction in form of Section 403(b) pre-approved plans with respect to the requirements of Section 403(b) of the Internal Revenue Code for the second remedial amendment cycle. This Revenue Procedure also sets forth the rules for determining when remedial amendment periods expire for Section 403(b) pre-approved plans.
Revenue Procedure 2021-38 modifies Revenue Procedure 2016-37 to extend the deadline for adopting an interim amendment for a Section 401(a) pre-approved plan to match the deadline for adopting an interim amendment for a Section 403(b) pre-approved plan, which is set forth in Revenue Procedure 2021-37 (issued simultaneously).
Revenue Procedure 2021-37 is available here.
Revenue Procedure 2021-38 is available here.
IRS Releases Temporary and Proposed Regulations on the Recapture of Excess Employment Tax Credits Under ARPA
On September 8, 2021, the Internal Revenue Service (IRS) released both temporary and proposed regulations under Sections 3131, 3132, and 3134 of the Internal Revenue Code, added by Sections 9641 and 9651 of the American Rescue Plan Act of 2021 (ARPA). The temporary regulations allow the IRS to prescribe regulations as may be necessary for recapturing the benefit of the employment tax credits provided under the Sections when necessary and to prevent the avoidance of the purposes of the limitations under these Sections. The proposed regulations affect businesses and tax-exempt organizations, as well as certain governmental entities, that claim the paid sick leave credit and the paid family leave credit under Sections 3131 and 3132, and that claim the employee retention credit under Section 3134. (The text of the temporary regulations serves as the text of the proposed regulations.) The temporary regulations became effective on September 10, 2021. Written or electronic comments and requests for a public hearing on the proposed regulations must be received by November 9, 2021. Please refer to both regulations for cross-referencing, specific details, and applicability dates.
The temporary regulations are available here.
The proposed regulations are available here.
Treasury, IRS Release Guidance for 2021 on Reporting Qualified Sick and Family Leave Wages
On September 7, 2021, the Treasury and the IRS issued Notice 2021-53, which provides guidance to employers about reporting on Form W-2 the amount of qualified sick and family leave wages paid to employees for leave taken in 2021. The Notice provides guidance under recent legislation, including: the Families First Coronavirus Response Act (FFCRA), as amended by the COVID-Related Tax Relief Act of 2020, and the ARPA.
Employers will be required to report these amounts to employees either on Form W-2, Box 14, or in a separate statement provided with the Form W-2. The guidance provides employers with model language to use as part of the Instructions for Employee for the Form W-2 or on the separate statement provided with the Form W-2. The wage amount that the Notice requires employers to report on Form W-2 will provide employees who are also self-employed with the information necessary to determine the amount of any sick and family leave equivalent credits they may claim in their self-employed capacities.
In July 2020, the IRS issued Notice 2020-54, which provided guidance regarding W-2 reporting of qualified sick leave and family leave under the FFCRA for wages paid to employees for leave taken in 2020.
The news release is available here.
IRS Notice 2021-53 is available here.
IRS Notice 2020-54 is available here.
IRS Announces 2021–2022 Special Per Diem Rates
On September 3, 2021, the IRS released Notice 2021-52, announcing the special per diem rates effective October 1, 2021, which taxpayers may use to substantiate the amount of expenses for lodging, meals, and incidental expenses when traveling away from home. The Notice provides the special transportation industry rate, the rate for the incidental expenses-only deduction, and the rates and list of high-cost localities for purposes of the high–low substantiation method. Please refer to the Notice for specific information.
IRS Notice 2021-52 is available here.
DOL Publishes Final Interpretive Rule Amending One of the Rules Interpreting the OSH Act’s Anti-Retaliation
On September 3, 2021, the Department of Labor (DOL) announced that its Occupational Safety and Health Administration (OSHA) has published a final interpretive rule that changes a rule interpreting the anti-retaliation provision of the Occupational Safety and Health Act (OSH Act). In 1973, OSHA established “Part 1977 - Discrimination against Employees under OSH Act” that contains interpretive regulations and procedures governing the agency’s administration of cases under Section 11(c), which prohibits employers from retaliating against employees because they have engaged in protected activity, including complaining about unsafe or unhealthful working conditions.
The revised final interpretive rule clarifies the causal connection between the protected activity and the adverse action (29 CFR 1977.6). This change brings the provision in line with the Supreme Court’s holdings in Gross v. FBL Financial Services, Inc., Univ. of Tex. Sw. Med. Ctr. v. Nassar, and Bostock v. Clay County, Georgia. The agency also revised the regulation by adding terms to reflect the full scope of Section 11(c)’s prohibition against retaliation. The final interpretive rule became effective on September 3, 2021.
The news release is available here.
The final interpretive rule is available here.
OFCCP and EEOC Publish Rescission of Notice of Intention Not to Request, Accept, or Use Employer Information Report (EEO–1) Component 2 Data
On September 2, 2021, the DOL’s Office of Federal Contract Compliance Programs (OFCCP) and the Equal Employment Opportunity Commission (EEOC) published a rescission of Notice of Intention not to request, accept, or use Employer Information Report (EEO-1) Component 2 Data. The OFCCP and the EEOC collect workforce data through the EEO-1 under their Joint Reporting Committee. OFCCP is rescinding its previously issued Notice, which stated that OFCCP did not intend to request, accept, or use EEO-1 Component 2 data. The agency determined that it was premature to issue a notice stating OFCCP did not expect to find significant utility in the data. The recission Notice is effective immediately.
The Notice is available here.
Social Security 2021 Trustees Report Now Available
On August 31, 2021, the Social Security Board of Trustees released its annual report on the long-term financial status of the Social Security Trust Funds. According to the report, the combined asset reserves of the Old-Age and Survivors Insurance and Disability Insurance Trust Funds are projected to become depleted in 2034, one year earlier than projected last year, with 78% of benefits payable at that time. The Trustees Report includes many other tables containing historical data and projections. Please refer to the report for specific details and subject areas.
The news release is available here.
The 2021 Trustees Report is available here.
President Biden’s Vaccine Mandate—What It Means for Employers
On September 9, 2021, President Biden announced a series of actions designed to increase the number of Americans vaccinated against COVID-19. Most importantly for employers, the President’s COVID-19 Action Plan (entitled “Path Out of the Pandemic”) includes a vaccination mandate for employers with 100 or more employees. Those employers will be required to implement a mandatory vaccination program for employees that requires employees either to be vaccinated against COVID-19 or, for those employees who decline to be vaccinated, to undergo weekly testing for COVID-19. Employers must provide paid time off for vaccinations and recovery from those vaccinations.
The Aon bulletin, which covers what the vaccine mandate means for employers, is available here.
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