• COVID-19 Update—Year-End Pandemic Relief Bill: Highlights
• Wespath Commits to "Just Transition" on Climate Change: What You Should Know

COVID-19 Update—Year-End Pandemic Relief Bill: Highlights

As we mentioned in the December 22, 2020 On Board Express, Congress passed the Consolidated Appropriations Act, 2021 on Monday, December 21, 2020. President Trump signed the bill into law nearly a week later on December 27.

The massive bill combines general government funding and other features with provisions that specifically respond to the COVID-19 pandemic, including economic stimulus measures.

Among many other provisions, the CAA includes these measures:

• Direct stimulus payments of $600 to individuals making $75,000 per year or less. The amount is gradually reduced for individuals making over $75,000 per year and phased out to $0 for individuals making over $99,000 per year.

• Additional unemployment benefits of $300 per week for a limited period of 11 weeks.

• Extension and expansion of the Employee Retention Credit, which was included in the Coronavirus Aid, Relief and Economic Security (CARES) Act. (Wespath previously published guidance on the Employee Retention Credit, as described here.)

• Additional $300 billion in funding for the first and second Paycheck Protection Program (“PPP”) loans, and a provision to harmonize these loans with the Employee Retention Credit. (Wespath previously published guidance on PPP loans, as described here and in other guidance on our COVID-19 legislation webpage.) The CAA created new flexibility for PPP borrowers too, including expanding the definitions of eligible expenses and payroll expenses in calculating loan forgiveness, and creating a further streamlined loan forgiveness process for loans under $150,000.

• Extension through March 31, 2021, of employer payroll tax credits related to emergency sick leaves established by the Families First Coronavirus Response Act (FFCRA, passed in March 2020), which were set to expire December 31, 2020. However, it does not appear that the CAA extends the requirement for employers to provide such leaves. (Wespath previously published guidance on FFCRA, as described here.) Thus, an employer has the option of continuing to provide emergency sick leave, and if it does, the employer can use the employer payroll tax credit provisions of the FFCRA (which have been extended) to recoup all or part of its costs. Because this is a payroll tax credit, it would be available to many tax-exempt employers. In the alternative, employers can simply let the mandatory FFCRA emergency sick leave expire on December 31, 2020 and decline to make such leaves available to employees in Q1 of 2021.

• Permits rollover of remaining 2020 health and dependent care flexible spending account (FSA) balances through 2021. Typically under Internal Revenue Code rules, dependent care FSAs have a "use it or lose it" rule with no carryover from year to year, while health FSAs have a limited carryover allowance. The CAA recognizes that many households were unable to spend dependent care FSAs when childcare facilities closed for extended time periods due to the pandemic. The CAA also allows plans additional carryover options for FSAs from 2021 to 2022; new flexibility for participants who have terminated coverage; and additional flexibility for dependent care FSAs related to children who reached age 14 during 2020.

  For HealthFlex participants, Wespath hopes to take advantage of this opportunity with remaining FSA funds and is currently working with HealthEquity (third-party administrator for HealthFlex reimbursement accounts) to determine whether some of these options are operationally feasible. We will share more information and details as soon as possible.

More Details to Come

Wespath is analyzing the contents of the Consolidated Appropriations Act, 2021 and its potential impact on UMC annual conferences, local churches and clergy/lay. We will publish additional information soon via On Board Express and our COVID-19 legislation webpage.

Wespath Commits to "Just Transition" on Climate Change: What You Should Know

As the world responds to climate change, Wespath believes the business community must consider its effects on workers, communities and society. We are pleased to join over 150 global investors in endorsing the Just Transition Statement, which guides the responsible management of the low-carbon transition and its social impacts. We encourage you to read more about our commitments in our new Investment Insights blog post.

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