NAICU Washington Update

Congress Approves Bill to Provide Unemployment Insurance Relief to Self-Insured Non-Profits

July 10, 2020

The House of Representatives and Senate have passed, and sent to President Trump for his signature, a bill reversing the ruling by the Department of Labor (DOL) that would have made non-profits that self-insure for unemployment benefits fully responsible for the reimbursement cost of those benefits before applying to their state for later reimbursement. 

The Protecting Nonprofits from Catastrophic Cash Flow Strain Act would allow states to immediately apply funding from the CARES Act to the balance due to non-profits, effectively reducing the amount such non-profits owe to the states by half.  Funding under the CARES Act was intended to provide emergency relief to self-employing nonprofits by funding 50 percent of the unemployment insurance obligations for the period beginning March 13 and ending December 31. However, DOL issued guidance in April stating that these employers “must pay their bill in full” before they can apply to receive reimbursement for one-half of their obligation.

If signed, this measure will provide significant cash flow relief to colleges that self-insure.

MORE News from NAICU