Legal experts are still trying to comb their way through the 1,079-page American Recovery and Reinvestment Act President Obama signed into law last month. And deep in the document, they’re finding several provisions that will have a big impact on HR.

1. Tax breaks

One change that could affect companies’ hiring plans: a tax incentive to boost the employment of certain disadvantaged groups.

Under the new law, businesses can claim a 40% credit on the first $6,000 of wages paid to:

• unemployed veterans (people discharged from military duty within the past five years who’ve received at least four weeks of unemployment benefits within the previous 12 months), and

• “disconnected youths” (individuals between the ages of 16 and 25 who haven’t worked or attended school in the past six months).

2. New HIPAA regs

The stimulus package expands the Health Insurance Portability and Accountability Act (HIPAA) to give businesses more responsibility in keeping health records confidential.

Under the new provision, in the event of a breach of health data, any business covered by HIPAA must notify affected

individuals within 60 days after they discover the information has been compromised.

3. COBRA subsidy

Under the stimulus plan, the government will subsidize COBRA health insurance premiums for employees who have lost or will lose their jobs between Sept. 1, 2008, and Dec. 31, 2009. Here’s how it’ll work:

Employees are responsible for paying 35 percent of the premiums. Employers pay the rest, then claim their share as on offset against payroll tax liability.

Any workers who were terminated after Sept. 1 but didn’t take COBRA will get a second chance. Employers must send those employees a new notice before April 15.

4. Increased unemployment benefits

The plan gives states more money for unemployment benefits, extending a program that offers benefits for an additional seven weeks. Also, the law expands eligibility to employees who lose their jobs due to certain family reasons, such as a spouse’s relocation or the need for time to take care of a sick family member.

As a result, experts say, employers could end up paying higher unemployment insurance taxes.

Article courtesy of: www.hrlegalnews.com