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Congress Extends State Unemployment Insurance Benefits into 2012

December 20, 2010 - NORTON, MA - On December 16th, HR 4853 was passed by Congress and further extends Emergency Unemployment Compensation (“EUC”) benefits and the 100% Federal reimbursement of regular Extended Benefits (“EB”) for an additional thirteen months through January 4, 2012.  President Obama signed the bill into law on Friday, December 17th.

Under prior legislation, the temporary EUC and EB provisions phased out on November 30th resulting in what would have been the end of approximately two million unemployed worker’s state UI benefits by December 31, 2010.

These state unemployment insurance (“UI”) related provisions do not include relief from interest on loans to states to pay state unemployment compensation or relief from FUTA tax increases that will begin to hit a majority of states for 2011.  However, the primary extension features of the bill include:

  1. Application to the EUC program, which provides up to 53 weeks of federally-funded extended UI benefits in certain states is extended from November 30, 2010 to January 3, 2012.  The period during which individuals may claim and be paid EUC is extended from ending April 30, 2011 to June 9, 2012;
  2. 100% federal funding for the EB program, which provides up to an additional 13 to 20 weeks of UI benefits in certain states.  The state option to continue EB payments is extended from April 30, 2011 to January 4, 2012.

The bill does not provide:

  • Additional unemployment beyond the 99 weeks an individual could receive in total state and federal UI in certain states;
  • An extension to the period an individual may qualify for Federal Additional Compensation (the extra $25.00 per weekly benefit amount on state and federal UI); and
  • The extension to the eligibility for, and the duration of, the federal COBRA health coverage subsidy

About Total Management Solutions

For 23 years, Total Management Solutions has set the standard for Supplemental Unemployment Benefit (“SUB-Pay”) Plan development and administration for Fortune 500 companies.  Introduced by organized labor and the Department of Labor in the early 1950's, and first issued in a Revenue Ruling by the IRS in 1956, SUB-Pay Plans enable corporations to utilize its paid-in asset of state unemployment insurance taxes to supplement state unemployment insurance benefits with separation pay.  When combined, these two benefits reduce a corporation's severance costs by 7.65%-45% while providing their separated or furloughed employees with up to 100% of their pre-layoff wage, plus a 7.65% tax savings, while they transition to reemployment.

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