The Washington Report
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August 18, 2021
Executive/Legislative
Congress Adjourned for Summer Recess
The House and Senate are adjourned for summer recess. The chambers are tentatively scheduled to return to the Hill the week of August 23, 2021.
President Biden Issues Fact Sheet Calling on Congress to Lower Prescription Drug Costs
On August 12, 2021, President Biden announced his plan to reduce the cost of prescription drugs. According to a Fact Sheet released by the White House, “President Biden is laying out his vision for reducing the high cost of prescription drugs. As part of his Build Back Better agenda, he’s calling on Congress to address this crisis and allow Medicare to negotiate drug prices, significantly reducing costs for millions of Americans.”
Specifically, the plan includes:
- Allowing Medicare to negotiate drug prices;
- Penalizing drug companies that raise prices faster than inflation; and
- Building upon existing progress to lower the cost of prescription drugs (referring to a previous July 2021 Executive Order (EO) asking each agency to improve competition and reduce prices).
Please refer to the Fact Sheet for additional information regarding cost savings and other findings.
The White House Fact Sheet is available here.
The July 9, 2021, EO on “Promoting Competition in the American Economy” is available here.
Other HR/Employment
OSHA Updates COVID-19 Guidance for All Industries
On August 13, 2021, the Department of Labor’s Occupational Safety and Health Administration (OSHA) updated its Protecting Workers: Guidance on Mitigating and Preventing the Spread of COVID-19 in the Workplace website. Due to rising cases, the update aligns the agency’s workplace recommendations for the pandemic with the Centers for Disease Control and Prevention’s (CDC’s) most recent guidance.
The summary of changes as of August 13, 2021, include:
- Updated to reflect the July 27, 2021, CDC mask and testing recommendations for fully vaccinated people;
- Reorganized Appendix recommendations for Manufacturing, Meat and Poultry Processing, Seafood Processing, and Agricultural Processing Industries; and
- Added links to guidance with the most up-to-date content.
Regarding vaccinations, "OSHA suggests that employers consider adopting policies that require workers to get vaccinated or to undergo regular COVID-19 testing—in addition to mask wearing and physical distancing—if they remain unvaccinated," the guidance states. Please refer to the updated material for all the latest information and specific details.
OSHA’s updated Protecting Workers: Guidance on Mitigating and Preventing the Spread of COVID-19 in the Workplace website is available here.
IRS Releases Notice on Work Opportunity Tax Credit Deadlines
On August 10, 2021, the Internal Revenue Service (IRS) issued Notice 2021-43, which extends the 28-day deadline for employers to submit a request to a designated local agency (DLA) to certify that an employee hired between January 1 and October 8 of this year is a Designated Community Resident or a Qualified Summer Youth Employee. To be certified as a Designated Community Resident or a Qualified Summer Youth Employee under the Work Opportunity Tax Credit, an employee must have a principal place of residence within an Empowerment Zone where the employee continuously resides.
Empowerment Zone designations terminated on December 31, 2020, but the Taxpayer Certainty and Disaster Tax Relief Act of 2020, enacted as Division EE of the Consolidated Appropriations Act, 2021, permitted the designations to be extended through 2025. On May 26, 2021, all Empowerment Zone designations were extended from December 31, 2020, to December 31, 2025. The transition relief under this notice allows employers to submit Form 8850 (Pre-Screening Notice and Certification Request for the Work Opportunity Credit) for these employees until November 8, 2021.
The Notice also provides guidance to certain employers who submitted a Form 8850 to a DLA for these employees during the period of transition relief and received a denial due to the termination of Empowerment Zone designations on December 31, 2020, or who received a certification before Empowerment Zone designations were extended. Please refer to the IRS Notice for additional information.
The IRS news release is available here.
IRS Notice 2021-43 is available here.
IRS Issues Safe Harbor Permitting Employers to Exclude Certain Amounts From Gross Receipts Solely for Determining Eligibility for the ERC
On August 10, 2021, the IRS issued Revenue Procedure 2021-33, which provides a safe harbor allowing employers to exclude certain items from their gross receipts solely for determining eligibility for the Employee Retention Credit (ERC). These amounts are:
- The amount of the forgiveness of a Paycheck Protection Program Loan;
- Shuttered Venue Operators Grants under the Economic Aid to Hard-Hit Small Businesses, Non-Profits, and Venues Act; and
- Restaurant Revitalization Grants under the American Rescue Plan Act of 2021.
An employer elects to apply the safe harbor by excluding these amounts solely for determining whether it is an eligible employer for a calendar quarter for purposes of claiming the ERC on its employment tax return. Revenue Procedure 2021-33 requires employers to apply the safe harbor consistently for determining eligibility for the ERC. The employer must exclude the amounts from their gross receipts for each calendar quarter in which gross receipts are relevant to determine eligibility to claim the ERC. The employer claiming the credit must also apply the safe harbor to all employers treated as a single employer under the aggregation rules. For additional information, please refer to the Revenue Procedure.
The IRS news release is available here.
IRS Revenue Procedure 2021-33 is available here.
IRS Issues Guidance on the ERC
On August 4, 2021, the IRS issued Notice 2021-49, which provides guidance on changes made to the ERC by the American Rescue Plan Act (ARPA). Notice 2021-49 addresses changes made by the ARPA to the ERC that are applicable to the third and fourth quarters of 2021. For example, the Notice provides guidance on the inclusion of recovery startup businesses in the definition of eligible employers. The Notice also provides guidance on several miscellaneous issues with respect to the ERC for both 2020 and 2021. See the Notice for further details.
An IRS news release is available here.
IRS Notice 2021-49 is available here.
DOL Extends Comment Period for Proposed Minimum Wage Increase for Federal Contractors
As previously reported in The Washington Report, the Department of Labor (DOL) published a proposed rule on July 22, 2021, that would increase the minimum wage for workers performing work on or in connection with covered federal contracts to $15 per hour beginning January 30, 2022, and would make certain other changes to the federal contract minimum wage. On August 3, 2021, the DOL announced that it is extending the deadline for comments on the proposed rule from August 23, 2021, to August 27, 2021, in order to provide interested parties additional time to submit comments.
The extension of the comment period is available here.
The July 22, 2021, proposed rule is available here.
Aon Publications
The Legal and Practical Implications of Charging Unvaccinated Employees More for Employer-Sponsored Medical Coverage
Over the past few weeks, various news reports and opinion pieces have discussed whether employers can or should penalize employees who are not vaccinated against COVID-19 but participate in the employer’s medical plan by charging those employees more for medical coverage. The short answer to this question is that an employer group health plan that charges unvaccinated plan participants more for health coverage may do so only if the plan satisfies the HIPAA wellness program requirements. The longer answer is more problematic. In complying with the HIPAA wellness program rules, an employer not only might fail to increase the COVID-19 vaccination rate among plan participants but might end up paying incentives to unvaccinated employees.
This Aon bulletin discusses the following issues:
- How does HIPAA regulate health plan surcharges?
- What are the different types of wellness programs under HIPAA?
- How do the HIPAA wellness plan rules apply to COVID-19 vaccination programs?
The Aon bulletin is available here.