Along with a third round of direct payments, the American Rescue Plan Act of 2021 (ARPA) includes several provisions that will impact employee benefits plans and require employers to notify individuals of some of the changes.
To account for loss of employee-sponsored health coverage due to COVID-19, ARPA provides a 100% premium subsidy for COBRA enrollment options until September 30, 2021. Family members may also be entitled to the subsidy if they qualify under the expanded rules.
The provision requires that anyone whose COBRA coverage or eligibility period includes the months from April to September must be notified of the subsidy and notified when it is about to expire. The notices must be sent no later than May 31, 2021. Templates are available.
The plan more than doubles the standard annual limits for Dependent Care Account (DCA) contributions. The increase is optional; employers who wish to adopt the provision will need to amend their Section 125 Plan.
Small and midsize private employers that choose to provide paid time off for COVID-19-related reasons in accordance with the Families First Coronavirus Response Act are now eligible for tax credits under ARPA.Read American Fidelity’s blog post for more details on how this legislation impacts your employee benefits plan.