Below is an overview of some of the bill’s key provisions:

Supports small businesses and nonprofits

  • Adds $7.25 billion in funding for the Paycheck Protection Program (PPP) and expands eligibility of 501(c) nonprofits of all sizes and types, except for 501(c)4 lobbying organizations.
  • Increases the funding allocation to $28.66 billion for a new program at the SBA offering assistance to restaurants and bars hard hit by the pandemic. $5 billion is set aside specifically for smaller establishments with less than $500,000 in 2019 annual revenue. During the first 21 days, applications from restaurants owned and operated by women, veterans, or socially and economically disadvantaged individuals will receive priority.
  • Provides $15 billion for COVID-19 emergency grants through the Economic Injury Disaster Loan (EIDL) Program that is targeted to help those who applied for relief in 2020 but did not receive the full $10,000 grant. 
  • Establishes a Community Navigator Pilot Program intended to increase the awareness of and participation in COVID-19 relief programs for business owners currently lacking access, with priority for businesses owned by socially and economically disadvantaged individuals, women, and veterans.
  • Includes $10 billion to support up to $100 billion in small business financing through state, territorial, and tribal government programs. Of this amount, $2.5 billion is dedicated for support to business enterprises owned and controlled by socially and economically disadvantaged individuals, including minority owned businesses.

Expands health coverage and lowers health care costs

  • Expands the subsidies in the ACA Marketplaces to cover more middle-class families and is more generous for those already receiving subsidies for 2021 and 2022. It removes the current cap that makes any family with income above 400% of the poverty level ineligible for any subsidies.  Under the bill, no one will have to pay more than 8.5% of their income for a silver plan in the ACA marketplaces. 
  • Treats individuals who receive unemployment at any point in 2021 as if their income were 133% of the poverty level for the purposes of the ACA marketplace subsidy.  As a result, they can purchase an ACA silver plan for $0 premium.
  • Provides a 100% subsidy for individuals who lose their job and choose to use COBRA to continue their existing employer-sponsored health coverage. 

Impact on the Families First Coronavirus Relief Act (FFCRA)

As it relates to FFCRA, the bill will:

  • NOT reimpose the FFCRA paid leave mandate; meaning any “FFCRA” leave provided by employers in 2021 is purely voluntary;
  • Extend FFCRA emergency paid leave tax credits for FFCRA-covered employers that voluntarily provide compliant paid leave through September 30, 2021;
  • Increase the amount of wages for which an employer may claim the paid family leave tax credit from $10,000 to $12,000 per employee;
  • Clarify that employers can claim the tax credits for paid family leave taken for any of the FFCRA qualifying Emergency Paid Sick Leave (EPSL) reasons (i.e., it is not limited to the school closure/childcare provider unavailability leave reason);
  • Expand the qualifying leave reasons to include seeking or awaiting the results of a diagnostic test for, or a medical diagnosis of, COVID-19 where the employee has been exposed to COVID-19 or the employer has requested such test or diagnosis, and obtaining immunization related to COVID-19 or recovering from any injury, disability, illness, or condition related to the immunization; and
  • “Refill” the 10 day/80 hour emergency paid sick leave bucket for each eligible employee effective April 1, 2021, allowing employers to claim credits for additional leave taken by employees who previously used FFCRA-covered EPSL.

Increases the direct payments to working families

  • Provides Working Families an Additional Direct Payment of $1,400 Per Person – This will bring the total relief payment to $2,000 per person. In December, Congress enacted a COVID relief package that provided a direct payment of $600 per person.  The American Rescue Plan Act builds on that by providing another $1,400 per person, yielding a total relief payment of $2,000 per person.  
  • Relies on the same income threshold as the December legislation to determine which individuals receive the full $1,400 payment.  Single filers with incomes up to $75,000, head of household filers with incomes up to $112,500, and joint filers with incomes up to $150,000 will receive the full payment of $1,400.  

Extends Unemployment Benefits

  • Extends the $300 a week unemployment compensation through September 6.
  • Exempts up to $10,200 in unemployment benefits for individuals received in 2020 from federal income taxes for households making less than $150,000.  

Expands the Child Tax Credit

  • Makes the child tax credit fully refundable for 2021 and increases the annual amount to $3,000 per child ages 6 to 17; $3,600 for a child under age 6 for single filers earning up to $75,000 and joint filers earning up to $150,000.  Above these thresholds, the credits are phased down.
feature
Webinar: The next chapter of COVID relief: Focus on small business
Watch the replay

Disclaimer

Unless otherwise noted, the source of all information is “American Rescue Plan Act”, U.S. Senate, 2021.

Brought to you by The Guardian Life Insurance Company of America (Guardian), New York, NY. Material discussed is meant for general illustration and/or informational purposes only and it is not to be construed as tax, legal, investment or medical advice. Guardian, its subsidiaries, agents, and employees do not provide tax, legal, or accounting advice. Consult your tax, legal, or accounting professional regarding your individual situation.

GUARDIAN® is a registered service mark of The Guardian Life Insurance Company of America® ©Copyright 2021 The Guardian Life Insurance Company of America, New York, N.Y.

2021-118064