HR Webinar: The New Consolidated Appropriations Act of 2021: What HR Pros Must Know

Organize. Humanize. Maximize.
Consolidated Appropriations
Act of 2021
Keys to Compliance
January 14th, 2021
Bob Greene

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Today’s Speaker
Bob Greene currently serves as Senior HR Industry Analyst at Ascentis.
Bob’s 43 years in the human capital management industry have been spent
in practitioner, consultant and vendor/partner roles. As practitioner, he
managed payroll for a 5,000-person bank in New Jersey. As consultant, he
spent 8 years advising customers in HRMS, and payroll and benefits system
design as well as acquisition strategies. Bob also built a strategic HCM
advisory practice for Xcelicor (later acquired by Deloitte Consulting.)
As vendor/partner, he has had prominent roles in sales support, marketing
and product management at several companies and currently Ascentis. Bob
has been a Contributing Editor for IHRIM's Workforce Solutions Review
journal, for the past eight years, and since 2020 has served as Co-Managing
Editor. His experience also includes two years as Adjunct Lecturer in HRIS
at Benedictine University in Lisle, Illinois. In addition to his 43 years of
experience, Bob also holds a BA in English from Rutgers University.
Bob Greene

Agenda
• Part I: General Provisions of Highest Interest to Your Employees
• Stimulus Payments
• Unemployment Compensation Enhancements, et. al.
• Part II: Business Benefits Impacting HCM
• Paycheck Protection Program (PPP) “Round Two!”
• Employee Retention Tax Credits (ERTC) Extended and Modified
• FFCRA Provision Extensions
• Extension of Employee FICA Tax Deferral Program
• Part III: Employee Benefits Impacting Provisions
• Part IV: Miscellaneous Provisions
• Part V: Preview: “What Would Joe Do?”
• How Ascentis Can Help
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Disclaimer
• Legal advice
• A political opinion
• The “last word” on these topics!
This presentation is NOT:
Before Taking Any Actions
Before taking any actions on the information contained in
this or any other Ascentis presentation, employers should
review this material with their professional advisors.
This presentation is based on the latest published information available up to 24 hours
prior to its broadcast. This information is changing and being reinterpreted frequently.
Please check for updates before relying on this content.

Part I
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The CAA’21:
General Provisions

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Where’s All This Money Going?
Graphic courtesy of: Source: Rep. Abigail Spanberger’s office provided this breakdown of the bipartisan framework
https://www.wric.com/news/people-are-about-to-lose-everything-bipartisan-plan-could-extend-unemployment-before-expiration-date/

High Level Overview of the CAA’21
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The Consolidated Appropriations Act of 2021…
• Was signed into law on December 27, 2020 (nine months to the day after the CARES
Act was signed) as H.R. 133.
• Takes 5,593 pages to document, with:
• 32 “divisions”
• 104 “titles” (each can be thought of as a “law within a law”)
• $908 billion in federal spending relating to COVID relief
• Includes taxpayer-facing benefits such as direct stimulus payments and
significantly enhanced unemployment benefits
• The divisions of highest interest to employers will be:
• Division M: Coronavirus Response and Relief Supplemental Appropriations Act of 2021
• Division N: Additional Coronavirus Response and Relief
• Division EE: Taxpayer Certainty and Disaster Tax Relief Act of 2020

FFCRA
(H.R.6201)
CARES Act
(H.R. 748)
PPP & HCEA
(H.R. 266)
PPPFA
(H.R. 7010)
CAA’21
(H.R. 133)
CAA’21 COVID Relief Legislation – A Historical Timeline
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CAA’21 Spending Brings Cumulative COVID Relief to ~ $3.75 trillion*…
* Depending upon the extent of successful PPP loan forgiveness

CAA’21 General Provisions – Stimulus Payments
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The Terms of the Additional Stimulus Payments
• Supplemental stimulus payments of $600 per taxpayer (down from $1,200) and $600 per
dependent child (up from $500), applied against a refundable 2020 tax credit.
• By classifying the amount this way, the payments are available for release immediately.
• Direct deposits and some checks has already been made/mailed.
• Checks not mailed by January 15, 2021 will not be mailed and will have to be taken as credits on a tax return.
• If taxpayers are not eligible for payments now based on 2020/2019 income, they may still qualify for the credit on their 2020
tax filings made later in 2021, if their 2020 income falls below the specified threshold levels.
• Amounts are prorated from the previous $1,200 level:
• Full $600 payments are available for individuals with AGIs of less than $75,000, proration ends at $87,000,
reduced from the previous $99,000 level associated with the first check.
• Federal/state debt/obligations NOT ELIGIBLE for offset against these payments:
• Outstanding IRS/income tax debt
• Outstanding/past due student loan payments
• State income tax obligations
• Unemployment compensation repayments
• Outstanding/past due child support orders (this is a change from the previous payment’s terms)

CAA’21 General Provisions – Stimulus Payments
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Stimulus Payments – How They’ll be Distributed
• The Joint Committee on Taxation
estimates that this provision of the
CAA’21 will cost about $164 billion.
• This is down from the $293 billion
spent on the first round of stimulus
payments.
• Under these revised rules:
• 84% of all families will receive a fully
allocated recovery rebate
• 5% of all families will receive a pro-rated
recovery rebate
• 11% of al families will receive no recovery
rebate.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Second Round Recovery Rebate Amounts
Full Payment Partial Payment No Payment

General Provisions – CARES Act Original UI Enhancements
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The CARES Act Provided for … Enhanced Unemployment Compensation
• The CARES Act authorized several important enhancements to state-
administered unemployment compensation (“UC”) programs, including:
• Pandemic Unemployment Assistance (PUA): Extension of UC to the self-employed and
so-called “gig economy” workers
• Waiver of the first week waiting period for benefits payments
• Establishment of an additional “short-term compensation” program for employees who have
had their hours reduced to avoid outright layoff. This represents the first ever funding of a
form of unemployment benefits for workers still working, but on a reduced schedule, and
• Pandemic Emergency Unemployment Compensation (PEUC): An additional 13 weeks of
benefits (Expired December 31, 2020.)
• Pandemic Unemployment Compensation (PUC): An addition of up to $600 per week in
enhanced benefits for a period of up to four months. (Expired July 31, 2020.)
• All of the above UC expansions (except the first bullet) required states to opt-in with modified
state/federal agreements, and all did, although it took several weeks.

General Provisions – CAA’21 Revised UI Enhancements
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CAA’21 Renews but Modifies That Enhanced Unemployment Compensation
• The CAA’21 spends $286 billion for enhancements to state-administered
unemployment compensation (“UC”) programs, including:
• Pandemic Unemployment Assistance (PUA): Extension of UC to the self-employed and
so-called “gig economy” workers.
• Waiver of the first week waiting period for benefits payments (at the state’s option).
• The PUA is extended through March 14, 2021.
• Pandemic Emergency Unemployment Compensation (PEUC): An additional 11 weeks of
benefits through March 14, 2021, for those who have exhausted their state-level benefits.
• Eligible workers with PUA/PEUC time left as of March 14, 2021 may apply for “transition
benefits” for 3 additional weeks, through April 5, 2021.
• Pandemic Unemployment Compensation (PUC): Adds $300 per week in enhanced
benefits (down from $600 under the CARES Act) through March 14, 2021 only.

Part II
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Business Benefits
and Their Impact on Human Capital Management

Paycheck Protection Program “Round Deux”
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Forgivable Loans for Small Businesses – Now New and Improved!
Division N, Title III of the CAA’21 renews the “Paycheck Protection Program
(PPP Round Two).”
• The program is funded up to $284.45 billion, and is available ONLY to originate loans until March 31, 2021 or until funds are exhausted,
if earlier.
• The loan limit is $10 million per borrower (if this is the first PPP loan for the employer).
• The most attractive feature of the PPP? Up to 100% of the loan is forgivable (effectively, that portion of the loan is transformed into a
grant).
• Eligibility criteria for PPP loans begin with “first round” criteria, modified as follows:
Newly Eligible
• Certain 501(c)(6) organizations, (but see exceptions )
• Broadcast news organizations (NAICS 511110/5151)
• Housing coops (with 300 ee’s or less)
• Destination marketing orgs (with 300 ee’s or less)
• Businesses in bankruptcy
• Employers using the ERTC (but no wage double dipping)
Newly Ineligible
• 501(c)(6) organizations that are pro sports leagues,
lobbying groups or political campaigns
• Publicly traded companies (or controlled by members
of Congress/Executive Branch or their spouses)
• Employers not in operation on 2/15/2020
• Recipients of “Save our Stages” grants under this law.

The Paycheck Protection Program “Round Deux”
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Set-Asides and Earmarks for “Second Round” PPP Loans
Likely in response to criticism heard around the first round of
PPP lending, the new law provides for key set-asides:
• $15 billion (across first- and second-draw PPP loans) for lending by community financial institutions;
• $15 billion (across first- and second-draw PPP loans) for lending by insured depository institutions,
credit unions, and certain other financial institutions with consolidated assets of less than $10 billion;
• $35 billion for new first-draw PPP borrowers; and
• $15 billion for first-draw and $25 billion for second-draw PPP loans, for borrowers with 10 or fewer
employees or for loans of less than $250,000 to borrowers in low- or moderate-income
neighborhoods. The SBA further determined that at least 25% of each of those set-asides will go to
each one of these specified groups.
• Additionally, for at least the first two days after the new lending portal opens (this week), the SBA
would offer a “head-start” dedicated application period for community financial institutions only.

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The PPP Gets a Very Rare Tax Treatment Exception
Traditionally, the IRS does not permit “double-dipping” –
allowing the same dollar to receive two government financial
benefits.
• This traditional prohibition was well represented in last year’s rules surrounding the PPP, ERTC, and
the FFCRA-related paid leave tax credits, with most double-dipping prohibitions in place.
• The CAA’21 carves out a limited exception for the interaction of the ERTC and PPP loans, allowing
employers to take advantage of both programs, while still enforcing the prohibition on double-dipping.
• But the CAA’21 expressly permits employers to take tax deductions for valid employment
expenses paid with forgiven PPP loan dollars. For a corporation at the 21% corporate tax
rate, this amounts to 121% positive impact to the bottom line for each dollar so treated.
• This special tax provision only applies for loan dollars forgiven after December 27, 2020.
• [To see how unique this is, imagine for a moment that you purchased a new car for $30,000, paying $2,100 state
sales tax, bringing the total purchase to $32,100, then returned it within a day, received a full refund on every
dollar you paid, and the IRS still allowed you to take the $2,100 large purchase tax deduction on your annual
return!]

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Special Rules for “Second Draw” PPP Loans
Employers who already received a loan under the previous PPP
may apply for a “second round” loan, if they:
• Have fully spent out the proceeds from their first PPP loan by the date of their second round
disbursement
• Have no more than 300 employees (rather than the 500 employee limit applicable to first round
loans), or 300 employees per location for certain NAICS 72 hospitality organizations
• Have experienced, for any one or more quarters, a year-on-year decrease in gross receipts in
comparable quarters, of 25% or more (e.g., 1Q20 gross receipts at least 25% lower than 1Q19 gross
receipts…)
• Are limited to $2 million per entity, and $4 million aggregate to all members of a single corporate
group
• Have not been created or organized, nor have significant operations in the People’s Republic of
China or Special Administrative Region of Hong Kong, nor have directors who are residents of the
PRC.

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Calculating Eligible Loan Amounts (“Tweaked” from CARES Act)
The maximum loan amount is calculated as follows:
• 2.5 times the average total monthly payroll costs incurred in the one-year period before the loan is
made OR calendar year 2019 OR calendar year 2020;
• For hospitality second-draw borrowers (NAICS codes starting with 72), the limit is 3.5 times the
average total monthly payroll costs
OR
• For seasonal employers, average monthly payroll costs may be for any 12-week period from
2/15/2019 through 2/16/2020
OR
• A maximum of $10 million for a first-round borrower, $2 million for a second-round borrower.

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Eligible Payroll Spend for Proceeds (changes from original terms in purple)
What is INCLUDED in “payroll costs” under the PPP?
• Compensation (salary, wage, commission, or similar compensation, payment of cash tip)
• Payment for vacation, parental, family, medical, or sick leave
• Allowance for dismissal or separation
• Employer payments for all employee group insurance benefits, including medical, vision, dental, life,
disability
• Payment of any retirement benefit
• Payment of State or local tax assessed on the compensation of employees.
What is EXCLUDED in “payroll costs” under the PPP?
• Compensation per individual in excess of $100,000 annually (prorated for the applicable period)
• Withheld taxes such as Federal Income Tax Withholding and employer portion of federal taxes
• Compensation for employees with principal place of residence outside the United States
• Compensation for leave under any provision of the FFCRA (no “double-dipping”)
• Compensation to independent contractors

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Eligible Non-Payroll Spend for Proceeds (changes from original terms in purple)
What Non-Payroll Costs May PPP Proceeds Be Used For?
• Mortgage interest (but not payment or prepayment of principal)
• Rent
• Utilities
• Interest on any other debt obligations that were incurred before February 15, 2020
• Covered supplier costs (made pursuant to contract or order in effect before covered period)
• Covered worker protection expenditures (related to COVID prevention measures, such as
ventilation systems, physical barriers, drive through facilities, employee screening equipment)
• Covered property damage costs from public disturbances in 2020 not covered by insurance
• Covered operational expenses (including costs for processing payroll, HR, sales/billing
software)
The Covered Period:
• The new rules under CAA’21 offer employers flexibility: the “covered period” begins on the date
proceeds are disbursed and ends on any date the borrower chooses between 8 and 24 weeks from the
disbursement date.

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Loan Forgiveness
A back-and-forth series of complex rules
• At least 60% of loan proceeds must be used for covered payroll costs to be eligible for full forgiveness.
• Loan amounts are forgiven, and the forgiveness excluded from gross income, in amounts that do not
exceed the original principal amount, and, as listed on the previous slides, were used to fund:
• Payroll and related employment costs
• Interest payments on mortgages (but not principal repayments)
• Certain enumerated operational expenses
• Rent, and
• Utility payments.
Since one of the main purposes of these loans is to promote
employee retention, forgiveness amounts are reduced for
certain employee layoffs and compensation reductions.
The forgiveness amounts can be restored by rehires and
restoration of compensation levels to pre-reduction levels.

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Loan Forgiveness Reductions
Forgiveness amounts calculated per the previous slide are reduced,
dollar for dollar, for employee cuts and certain reductions in wages.
• The “forgiveness reduction factor” is calculated for workforce reductions, as follows:
• Calculate the average number of FTEs per month during the covered period, DIVIDED BY
• The average number of FTEs per month between (a.) 2/15/19 through 6/30/19 -OR- between (b.) 1/1/20
through 2/29/20. Note that seasonal employers may only use (a.) as the denominator of their fraction.
• The forgiveness reduction factor is calculated for compensation reductions, as follows:
• For any employee who was paid $100,000 or less on an annualized basis in any pay period of 2019,
• The amount of any salary reduction exceeding 25% of total salary,
in the most recent full quarter.
• Note that the forgiveness reduction factor for workforce reductions
is a percentage, and the forgiveness reduction factor for
compensation reductions is a money amount. Both are applied to
the expected forgiveness amount to yield net forgiveness amount.

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Loan Forgiveness Reductions: Let’s Take an Example!
Gamma Inc. has 200 employees on January 25, 2021. On that date, they
receive the proceeds of a $4 million from their local bank, guaranteed by
the SBA under the PPP program. They choose a 24 week covered period.
• They calculate their preliminary forgiveness amount, based on eligible expenses of payroll, rent, enumerated
operational expenses and utilities, as of July 12, 2021, as $3.25 million.
• For their workforce reduction factor, they choose to use January-February, 2020 as the comparison period.
• Their average active FTEs from 1/25/2021 - 7/12/2021 were 185.
• Their average active FTEs from 1/1/2020 - 2/29/2020 were 225.
• Their workforce retention factor is therefore 82.2%, meaning that 17.8%
of their forgiveness amount ($0.5785 million) will be disallowed.
• Additionally, counting only employees earning less than $100,000
annualized, and exempting the first 25% of salary reductions for
each of the remaining employees, Gamma cut total salaries by $223,000.
• Gamma’s total forgiveness reduction = $0.5785 million plus $0.223 million, or
a total of $0.8015 million, leaving $2.4485 million as the allowable forgiveness.

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Loan Forgiveness Reductions: Oh, But Wait! There’s More!
Forgiveness amounts that would be disallowed per the calculations
on the previous slides can be restored, dollar for dollar, by
rehiring/reinstating staff and restoring salaries:
• Employers so affected can restore their full forgiveness amounts if, by the end of their chosen
covered period (second round loans only):
• They rehire/reinstate employees to the previous employment levels
(Note: equivalent headcount, NOT self-same employees)
• They restore employee pay to levels not less than 75% of the compensation levels at June 30, 2021 (the
“end of the most recent full quarter.”)
HCM Impacts: As these regulations indicate, the PPP and its loan
forgiveness provisions will require flexible point-in-time ad hoc or
standard reporting focusing on areas like headcount and compensation.

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“Streamlined Forgiveness? Yes, PLEASE!”
Under the CAA’21, the Small Business Administration has until
January 20, 2021 to issue a new, one-page form that certain PPP
borrowers may use to document their forgiveness application:
• The simplified process would apply to borrowers of $150,000 or less
• The application would consist of documentation of:
• The number of employees retained through the covered period of the loan
• The estimated total qualified payroll costs incurred during that period
• The total loan amount.
• No documentation will be due with the application, but will be required to be
retained by the borrower for four years for payroll and employment records,
and three years for all other records, in case of audit.
• This would be available to all new borrowers and retroactive for prior
borrowers who haven’t already received forgiveness.

Business Benefits – Employee Retention Tax Credits
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The CARES Act Added a Fourth Revenue Replacement Option for Employers
• Remember that the Families First Coronavirus Response Act (FFCRA) offered three
distinct tax credits to employers for leave paid to qualifying employees:
• For Paid Health Emergency Leave, up to $200 per day for wages paid for up to 10 weeks ($10,000
maximum), for covered reasons
• For Emergency Paid Sick Leave, up to $511 per day for wages paid for up to 10 days ($5,110
maximum), for an employee’s “own illness.”
maximum), to care for a specified family member.
• All of the above tax credits require that the employee be personally impacted by Coronavirus or COVID
illness.
• The CARES Act added a fourth tax credit – the Employee Retention Tax Credit, to offset
the costs of paying employees whom the employer must furlough or place on reduced
hours due to lack of business of government-ordered closing of the business.
• ERTC is available to employers of any size – under or over 500 employees.
• ERTC is available to §501(c)(3) not-for-profit employers, but is not available to government entities.

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ERTC Details – ORIGINAL 2020 Provisions
• The available tax credits per employee are calculated as 50% of the first $10,000 of eligible
wages, or $5,000.
• This is the maximum aggregate tax credit per employee for the period April 1, 2020-December 31, 2020.
• The tax credit calculation can include the employer cost of health insurance for the creditable period.
• It is taken against employer “payroll taxes” owed but is “refundable” so we presume it can exceed total
taxes owed for the period. We await further Treasury/IRS guidance on this issue.
• For an employer to qualify to take the credit, they must:
• Have conducted business in 2020 prior to the crisis, AND
• EITHER had their business operations fully or partially suspended by government order,
• OR experienced a year-over-year reduction in gross receipts of 20% or more. In this case, they remain
eligible for the benefit until gross receipts exceed 80% on that same comparison.
• IMPORTANT: For employers of 101 employees or more, the credit can only be taken on
wages paid to employees who are not working (i.e., retained in lieu of layoff or working a
reduced hours schedule imposed by the employer). For employers of less than 101
employees, all wages apply.

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ERTC Details – REVISED CAA’21 2021 Provisions
• The available tax credits per employee are calculated as 70% of the first $10,000 of eligible
wages, or $7,000, PER QUARTER.
• This is the maximum aggregate tax credit per employee per quarter for the period January 1, 2021 –
June 30, 2021.
• The tax credit calculation can include the employer cost of health insurance for the creditable period.
• It is taken against employer “payroll taxes” owed but is “refundable” so we presume it can exceed total
taxes owed for the period. We await further Treasury/IRS guidance on this issue.
• For an employer to qualify to take the credit, they must:
• Have conducted business in 2020 prior to the crisis, AND
• EITHER had their business operations fully or partially suspended by government order,
• OR experienced a calendar quarter year-over-year reduction in gross receipts of 80% or more.
• IMPORTANT: For employers of 501 employees or more, the credit can only be taken on
wages paid to employees who are not working (i.e., retained in lieu of layoff or working a
reduced hours schedule imposed by the employer). For employers of less than 501
employees, all wages apply.

34
Additional Changes to the ERTC
• The original law did not permit a single employer to partake of the ERTC
and use PPP loan proceeds for the same covered period.
• The new law loosens this restriction: an employer may now participate in
both programs, however the same wages may not be used both for
forgiveness under the PPP AND the ERTC. (No “double-dipping.”)
• A repeated complaint under the prior ERTC rules was that, while the total
cost of health insurance premiums (employer AND employee if pre-tax)
was includable in the credit calculations, this only applied to employees
being paid wages – it excluded employees on layoff or furlough where the
employer was paying healthcare continuation. The new ERTC rules “fix”
this and ALL health insurance premiums are includable in the tax credit
calculation.

FFCRA Provisions Extended
35
The Families First Coronavirus Response Act
• The FFCRA established two new forms of mandated paid leave for qualifying employers
and employees: Paid Health Emergency Leave (as an amendment to the Family &
Medical Leave Act, and Emergency Paid Sick Leave, and those two leave types offer
three types of tax credits:
• For Paid Health Emergency Leave, up to $200 per day for wages paid for up to 10 weeks ($10,000
maximum), for covered reasons
maximum), for an employee’s “own illness.”
maximum), to care for a specified family member.
• All of the above tax credits require that the employee be personally impacted by Coronavirus or
COVID illness.
• The CAA’21 extends availability of the tax credits through March 31, 2021, but does not
renew the mandate to offer these leave types to employees (for employers of certain
headcounts and below), which expired as of December 31, 2020.

Employee Social Security Tax Deferral – Extended
36
The Repayment Period for SS Tax Deferrals is Extended
• The Taxpayer Certainty and Disaster Tax Relief Act of 2020 (Division EE of the
CAA’21) extends the repayment period for employee Social Security (FICA)
deferred from the period September 1 through December 31, 2020 under the
Presidential Memorandum of August 8, 2020, from April 30, 2021 to December 31, 2021.
• Employers had a choice of opting in or out of the FICA withholding deferral.
• The wording of the IRS Notice (2020-65) made clear that employers will ultimately be held responsible for
remitting the deferred taxes (if, say, the employee quits and refuses to reimburse the employer for the outstanding
debt) in 2021.
• It went on to say that recovery of the deferred amounts must be accomplished “ratably” meaning at the same pay
period rate at which it was deferred in 2020 (not as a lump sum in January, for example).
• More recent guidance from the Service gave participating employers a “scary” look at the reporting impact of this
program – W2-C forms for every employee who had taxes deferred from 2020 to 2021, and the need to file 1040X
forms for a small number of employees who had two or more employers in 2020 and paid more than the annual
maximum FICA tax among them.
• Each month that goes by in 2021, a participating employer risks losing more and more employees who terminate
owing the employer deferred FICA taxes from 2020, but it appears that the wording of Sec. 274 of Division EE
now obligates employers to recover the deferred taxes over the new, 12-month period specified in the
new law.

Part III
37
Employee Benefits-Impacting
Provisions of the CAA’21

38
Miscellaneous and Benefits Impacting Provisions
The CARES Act Incorporated Key Provisions of the Employer
Participation in Repayment Act of 2019
For employers maintaining a qualified tuition reimbursement plan, the
CARES Act:
• Amends §127 to permit tax-free student loan payment reimbursement
• This provision is effective March 27, 2020 through December 31, 2020,
• The maximum benefit is $5,250, and that is the combined limit of tuition reimbursement and student
loan payment reimbursements per employee,
• The value of the student loan payment reimbursement is NOT taxable income to the employee.
• Other student loan related benefits within the CARES Act, available through September 30,
2020, and not involving employers, nor requiring a §127 plan to be in place:
• Suspended student loan payments
• Suspended interest accrual on federal student loan payments
• No garnishment of wages, Social Security payments or tax refunds for student loan debt collection.

39
The CARES Act Incorporated Key Provisions of the Employer
Participation in Repayment Act of 2019 – CAA’21 Revisions Noted
For employers maintaining a qualified tuition reimbursement plan, the
CARES Act:
• Amends §127 to permit tax-free student loan payment reimbursement
• This provision is effective March 27, 2020 through December 31, 2025,
• The maximum benefit is $5,250, and that is the combined limit of tuition reimbursement and student
loan payment reimbursements per employee,
• The value of the student loan payment reimbursement is NOT taxable income to the employee.
• Other student loan related benefits within the CARES Act, available through January 31,
2021, and not involving employers, nor requiring a §127 plan to be in place:
• Suspended student loan payments
• Suspended interest accrual on federal student loan payments
• No garnishment of wages, Social Security payments or tax refunds for student loan debt collection.

40
Retirement Plan Distributions and Loans Temporarily Expanded
As employees face the possibility of reduced wages, hours or even
furlough or layoff, they may need access to retirement plan balances:
• 401(k) plan distributions. Through December 31, 2020:
• A new type of hardship withdrawal, the Coronavirus-related distribution (CRD), is created and limited to $100,000
per participant,
• CRDs are not subject to the usual 10% excise tax on early distributions, and waiver of this penalty can be
retroactive to withdrawals beginning January 1, 2020, if the employee, a spouse or dependent received a
COVID-19 diagnosis
• Federal income tax is still owed, but can be paid over a three-year period,
• Repayments are treated as rollovers and not subject to annual plan contribution limits.
• 401(k) plan loans. Through December 31, 2020:
• The CARES Act doubles loan limits to the lesser of 100% of vested balance or $100,000.
• Individuals with an outstanding loan with repayment due between March 27, 2020 and December 31, 2020 can
delay their repayments by up to one year.
• These new provisions are able to be, but not required to be, offered by plan sponsors. These provisions
require plan amendments, but CARES allows those amendments to be adopted as late as December 31,
2022, retroactively.

41
Retirement Plan Distributions and Loans – CAA’21 Revisions Noted
As employees face the possibility of reduced wages, hours or even
furlough or layoff, they may need access to retirement plan balances:
• 401(k) plan distributions. Through June 25, 2021 (180 days after enactment of CAA’21):
• A new type of hardship withdrawal, the Coronavirus-related distribution (CRD), is created and limited to $100,000
per participant,
• CRDs are not subject to the usual 10% excise tax on early distributions, and waiver of this penalty can be
retroactive to withdrawals beginning January 1, 2020, if the employee, a spouse or dependent received a
COVID-19 diagnosis
• Federal income tax is still owed, but can be paid over a three-year period,
• Repayments are treated as rollovers and not subject to annual plan contribution limits.
• 401(k) plan loans. Through June 25, 2021 (180 days after enactment of CAA’21):
• The CARES Act doubles loan limits to the lesser of 100% of vested balance or $100,000.
• Individuals with an outstanding loan with repayment due between March 27, 2020 and December 31, 2020 can
delay their repayments by up to one year.
• These new provisions are able to be, but not required to be, offered by plan sponsors. These provisions
require plan amendments, but CARES allows those amendments to be adopted as late as December 31,
2022, retroactively.

42
Changes to Health and Welfare Plans
The CARES Act makes several changes to HSAs, HRAs, and FSAs:
• HSA coverage changes. Through December 31, 2020:
• HDHPs with HSAs will be permitted to cover telehealth and certain remote treatment services before the
individual has met their deductible, without endangering the HDHP status. Normal cost-sharing for these
services can still apply.
• FSA, HSA and HRA changes. Retroactive to January 1, 2020, and apparently permanent:
• OTC medication purchases can be covered by these plan types without a prescription.
• As a reminder, this was the status of OTC medications until the ACA removed them from approved lists of
expenses, at which point they were covered only with a medical professional’s prescription.
• The law also adds menstrual products to the OTC purchases which are FSA-, HSA-, and HRA-eligible.

43
Changes to Health and Welfare Plans – CAA’21 Revisions Noted
The CARES Act makes several changes to HSAs, HRAs, and FSAs:
• HSA coverage changes. Through December 31, 2020:
• HDHPs with HSAs will be permitted to cover telehealth and certain remote treatment services before the
individual has met their deductible, without endangering the HDHP status. Normal cost-sharing for these
services can still apply.
• HFSA, HSA and HRA changes. Retroactive to January 1, 2020, and apparently permanent:
• OTC medication purchases can be covered by these plan types without a prescription.
• As a reminder, this was the status of OTC medications until the ACA removed them from approved lists of
expenses, at which point they were covered only with a medical professional’s prescription.
• The law also adds menstrual products to the OTC purchases which are FSA-, HSA-, and HRA-eligible.
• Changes to the HFSA grace, runout and carryover rules will now apply to tax years 2020 and
2021.
• As in 2020, during 2021 employers may elect to offer one “off-cycle” election change period for
contribution elections. As always, this is a permissive, not mandatory change (employer option)
and requires plan amendments by end of 2022.

Part IV
44
Miscellaneous Provisions

The “No Surprises” Act
45
Division BB, Title I of the CAA’21 is the No Surprises Act
• The No Surprises Act takes a number of legislative actions to
discourage, and hopefully eradicate, various forms of surprise medical
billings:
• These provisions enjoyed bipartisan support, and follow an Executive Order issued by the
President in September, 2020 (E.O.13951, “An America-First Healthcare Plan”.)
• The new law focuses particularly on out-of-network providers, since they are often the
source of higher-than-expected costs. The focus includes emergency providers and air
ambulances, to address the origins of many patient billing complaints.
• An excellent review of this portion of the CAA’21 can be found here, but employers should
focus on:
• Possible need to reissue ID cards to be in compliance with key provisions of the new law – check with your
insurer or broker.
• Price comparison tools are now REQUIRED, and must include a non-internet based way to access (i.e., by
telephone)
• Provider directory information is now subject to new minimum frequency refresh requirements to ensure that
information remains current.

Miscellaneous (But Important!) Provisions and Extensions
46
Division EE, Title I of the CAA’21 Includes a Range of Provision Extensions
• Section 119 extends the tax credit available to employers under §45S for
“non-replacement” paid family and medical leave programs, through
December 31, 2025. As a reminder:
• This was the PFML program available under the Tax Cuts and Jobs Act of 2017
• It is non-pandemic related, applying to ALL specified reasons for FMLA
• It is limited to 25% of the wages paid under this program.
• Section 113 extends the tax credit available to employers under §51 for
new hires qualifying under the Work Opportunity Tax Credit (WOTC),
through December 31, 2025. As a reminder:
• WOTC offers tax credits to certain hires of members of hiring-disadvantaged groups, such
as the long-term unemployed, the formerly incarcerated, individuals with disabilities and
qualified military veterans
• Each year, employers across the USA qualify for about $1 billion in WOTC credits.

Part V
47
What Would Joe Do?

On January 20, at 12:01 pm…
48
So…What WOULD Joe Do?
• Based solely on his formal comments made since President-Elect Biden
has been declared the next President, we can expect his priorities to
include:
• An additional recovery rebate (stimulus payment) of anywhere from $1,400 to $2,000 per
individual.
• An increase of unemployment benefits – perhaps as high as $600 per week as was
included in the CARES Act
• A focus on vaccine delivery – perhaps with specific requests of employers to help
promote a nationwide “Vaccines-in-Arms” program
• Student loan forgiveness extension and perhaps formalization
• Increased funding to reopen schools safely
• The first minimum wage hike in almost 12 years – perhaps gradually adjusting to the $15
per hour that so many states and localities have adopted.

49
Questions?
Other Educational Resources:
Ascentis Blog Post- “The Consolidated Appropriations
Act of 2021: What Employers Need to Know”
https://www.ascentis.com/blog/the-consolidated-
appropriations-act-of-2021/

50
How Ascentis HR and Learning Management Can Help
Ascentis allows you to focus on the bigger picture with integrated
HR and Learning Management software. We provide real-time
data, easy reporting, and the ability task your employees with
virtual trainings to ensure your business is compliant.
• Ascentis HR provides over 300 on-demand reports, point-in-time
reports and configurable fields
• Fully integrated LMS incorporating unlimited content sources,
mobile access, and EZ-Upload (“SCORM Lite”) integration
capabilities
• LMS full catalog of over 2,000 content objects with categories
• Centralized company-branded employee and manager portals
deliver reliable information to help with managing time off such as
Emergency Paid Sick Leave and Extended Paid FML
Recruiting &
Onboarding
Talent
Management
HR &
Benefits
Payroll
Time &
Attendance
Ascentis

51
Contact Us
bob.greene@ascentis.com
info@ascentis.com
www.ascentis.com
800.229.2713

HR Webinar: The New Consolidated Appropriations Act of 2021: What HR Pros Must Know

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