On March 11, 2021, President Biden signed a new COVID-19 stimulus bill into law — the American Rescue Plan Act of 2021 (ARPA) containing important employee benefits provisions, summarized below.
See bulletins below for details about COBRA, Dependent Care FSA and the Exchange/Marketplace Subsidy.
- 100% COBRA subsidy for assistance eligible individuals (“AEIs”) from April 1, 2021 through September 30, 2021 (note: COBRA triggered by a reduction in hours or involuntary termination of employment)
- 60-day extended election period for (1) individuals who do not have a COBRA election in effect on April 1, 2021, but who would be AEIs if they did; and (2) individuals who elected but discontinued COBRA coverage before April 1, 2021, are still within their COBRA maximum coverage period and would otherwise be AEIs
- Advanceable, refundable tax credits against Medicare payroll taxes to employers for subsidy cost. DOL forms and instructions to follow.
- OPTIONAL: Employer may allow AEIs to elect a lower premium health plan option if available
- Notices must be provided: (DOL to issue model notices)
- Subsidy Availability (include required information with Election Notices sent during the subsidy period; also send this notice to existing AEIs by May 30)
- Extended Election Period (by May 30)
- Subsidy Expiration (within 15 to 45 days prior to subsidy expiration)
EMPLOYER ACTION: Identify AEIs and prepare to send notices in a timely manner. Coordinate with your COBRA administrator, if outsourced.
FFCRA Paid Leave (Optional)
- Qualifying employers may receive tax credits for FFCRA leave if administered compliantly, including accommodation of the expansions listed below.
- An extension of the refundable tax credits for Emergency Paid Sick Leave (EPSL) and Extended Family and Medical Leave (EFMLA) through September 30, 2021. Applicable to state and local governments, too.
- Expansions of the paid leave provisions apply April 1, 2021 through September 30, 2021:
- Two additional qualifying reasons: (1) seek or await a COVID-19 test result or diagnosis, due to exposure or employer request; and (2) get a COVID-19 vaccination or recover from a condition related to COVID-19 vaccination.
- EFMLA leave (up to 12 weeks) is available for any EPSL qualifying reason.
- EPSL’s 10-day limit starts over
- EFMLA leave pay increased to $12,000 for 2021
EMPLOYER ACTION: Decide whether to provide the paid leave for the extended period subject to the new requirements and expansions.
Dependent Care FSA (Optional)
Employer may increase the annual maximum (from $5,000) to $10,500 for 2021 calendar year. Per IRS Notice 2021-15, an employer may allow employees to change their FSA election mid-year prospectively without a qualifying event.
EMPLOYER ACTION: Determine whether to increase the limit and amend cafeteria plan accordingly.
Exchange / Marketplace Subsidy
Eligibility for an individual insurance subsidy is expanded for 2021 and 2022.
EMPLOYER ACTION: Applicable Large Employers (ALEs) who do not offer health coverage in compliance with the Affordable Care Act’s Employer Mandate (affordable, minimum value plan) should consider their increased exposure to penalties as a result of this subsidy eligibility expansion for individuals.
If you have questions or need help, please contact one of our benefit consultants.
|Check out our COVID-19 Resource Center for more resources and information.|