Grooms Benefits
  • Home
  • What We Do
    • Strategic Consulting
    • Benefit Management
    • Compliance
    • Employee Engagement
    • Technology Solutions
  • Who We Help
    • CFO & Finance Teams
    • HR Leaders
    • Your Employees
  • Who We Are
    • Our Culture
    • Our Office
    • Say Hello
  • Benefit Trends

Employee Benefit Trends

Benefit Bulletin: American Rescue Plan Act (ARPA)

3/23/2021

2 Comments

 
Picture
President Joe Biden signed the American Rescue Plan Act of 2021 (ARPA) into law on March 11, 2021. Along with providing financial relief for individuals, state and local governments, schools, businesses and for other purposes, the law contains the following measures of special interest to large and small employers. 
Picture

Recent ARPA Guidance for Employers
QUICK LINKS

- COBRA SUBSIDY -
- FFCRA LEAVE -
- UNEMPLOYMENT -
- AFFORDABLE CARE ACT -
- DEPENDENT CARE -
- RETENTION TAX CREDIT -

​Employers should review the employment-specific changes put into effect by ARPA and identify any requirements and opportunities that apply to them. Employers are also advised to watch for future official guidance on the implementation of the law. 

​The information provided here does not, and is not intended to, constitute legal advice; all information, content, and materials are for general informational purposes only.
 

ARPA COBRA Subsidy 


​The Consolidated Omnibus Budget Reconciliation Act of 1986 (COBRA) allows employees who would lose employer-sponsored health insurance because of job loss (or a reduction in working hours) to continue that insurance for 18 months. However, the employer can require the employee electing COBRA coverage to pay the entire cost of the premium. 

The ARPA provides a 100% subsidy of COBRA premiums from April 1, 2021, through Sept. 30, 2021, for employees and their family members who lost health insurance due to the involuntary termination (or reduction in hours) of their employment. These individuals would be allowed to elect subsidized COBRA even if they had earlier declined the COBRA option, or had enrolled in COBRA and then dropped it. The subsidy would not apply to employees who voluntarily terminated their employment or who qualify for another group health plan.

The subsidy is funded by the federal government through a refundable payroll tax credit. The ARPA contains new employee notice requirements for plan administrators; the U.S. Department of Labor will issue model notices for this purpose. Employees may elect subsidized COBRA any time from April 1, 2021, through 60 days after receiving notice of the benefit. 
 

Extension of FFCRA Leave


​The Families First Coronavirus Response Act (FFCRA), passed in March 2020, provided a tax credit for employers to fund two types of paid employee leave required by the law. These leave requirements expired in December 2020. However, the tax credits were extended through March 31, 2021, for employers that chose to continue to provide FFCRA leave beyond Dec. 31, 2020.

The ARPA extends the FFCRA employer tax credit for voluntarily provided leave through Sept. 30, 2021.

It also adds employee time off related to COVID-19 testing and immunization as permissible reasons for taking the voluntary leave. It also increases the amount of wages eligible for the family leave credit from $10,000 to $12,000 per employee, and it provides an additional 10 days of voluntary emergency paid sick leave for employees, beginning April 1, 2021.
 

Extension of Pandemic Unemployment


The ARPA extends three pandemic-related federal unemployment programs that were otherwise scheduled to end in March or April 2021.

These include:  
​
  • Pandemic Unemployment Assistance, which provides weekly benefits to independent contractors, self-employed individuals and other workers who would typically not be eligible for unemployment benefits;
  • Pandemic Emergency Unemployment Compensation, which provides weekly benefits to individuals who have exhausted their eligibility for all other unemployment benefits; and  
  • Federal Pandemic Unemployment Compensation, which provides an additional $300 weekly payment to individuals who are already receiving PUA, PEUC or regular unemployment benefits.  

Under the ARPA, all of these benefits are now available through Sept. 6, 2021. 
​

The ARPA also changes how unemployment benefits received in 2020 are taxed. Specifically, it exempts the first $10,200 from federal income tax for each spouse in households with under $150,000 in adjusted gross income.    
 

Temporary ACA Changes


The ARPA temporarily increases the dollar amount and expands eligibility for federal subsidies for health insurance coverage purchased through the Affordable Care Act (ACA) Exchanges. Currently, the ACA’s premium tax credits are not available to individuals with income at or above 400% of the federal poverty level.

The ARPA temporarily eliminates this income cap on these subsidies for a period of two years.

The law also: 

  • Limits the total amount a household would be required to pay for health coverage through the Exchanges to 8.5% of their household income;
  • Increases the federal subsidy amounts available for lower-income individuals, eliminating premium costs completely for these individuals in some cases; and
  • Includes additional federal funding intended to encourage states that did not previously expand their Medicaid programs to do so now. 

These ACA changes are temporary, and will expire after a period of two years.
 

Dependent Care (DCAP) Increase


For taxable years beginning after Dec. 31, 2020, and before Jan. 1, 2022, the ARPA increases the annual contribution limit for a dependent care assistance program (DCAP) from $5,000 to $10,500 (and from $2,500 to $5,250 for married individuals filing taxes separately). 

Employers with DCAPs can retroactively amend their plans to incorporate this increase, if: 
​
  • The amendment is adopted by the last day of the plan year in which it is effective; and
  • The plan operates consistently with the terms of the amendment until it is adopted. 
 

Employee Retention Tax Credit


The ARPA extends the employee retention credit through the end of 2021. The credit was set to expire in June 2021.

This credit was originally enacted with the Coronavirus Aid, Relief and Economic Security (CARES) Act to encourage employers to retain on their payroll employees who could not report to work because of COVID-19-related reasons. 

New features of this credit include:  
​
  • Some small startups that began operating after Feb. 15, 2020, will be eligible for a maximum credit of up to $50,000 per quarter even if they do not experience an eligible decline in gross receipts, or a full or partial suspension; and
  • A new provision for “severely financially distressed” employers will begin in the third quarter of 2021. The provision will allow employers of any size to count all wages toward the $10,000 cap. 
For more information on how the new ARPA stimulus bill might affect your workforce and employee benefits, please contact:

G. Scot Grooms, CEBS
sgrooms@groomsbenefits.com
LinkedIn: @scotgrooms
2 Comments
Peter Lee link
10/7/2022 11:22:36 am

Family woman wide when industry. Avoid model decade media player compare family outside.

Reply
Jonathan Simpson link
10/9/2022 08:11:37 pm

Situation mention less class indicate be its. Where weight herself building.
Cover response member image. Into role field.

Reply



Leave a Reply.

    Our Writers

    We ask that all employees at Grooms Benefit Solutions contribute ideas to our Insights blog. Everyone here has a voice, and we love that. 

    We're well-rounded, and everything from legal notices to wellness tips have a home here. Select a topic below to read more.

    Topics

    All
    Benefits Broker
    Benefits Consulting
    Benefits Education
    Benefit Strategies
    Benefit Trends
    CFOs
    Communication
    Culture
    Engagement
    Financial Wellness
    Health & Wellness
    Open Enrollment
    Prescription Drugs

    Inbox Insights
    Subscribe
    By subscribing, you agree to hear from us once in a while. Unsubscribe at any time. See our full privacy policy here.

    Archives

    October 2021
    August 2021
    March 2021
    February 2021
    January 2021
    October 2020
    September 2020
    August 2020
    June 2020
    April 2020
    March 2020
    February 2020
    January 2020
    September 2019
    August 2019
    April 2019
    March 2019
    October 2018
    September 2018
    August 2018
    May 2018
    March 2018
    August 2017
    June 2017
    March 2017
    April 2016
    December 2015
    June 2015
    January 2015

WHAT WE DO
Strategic Consulting
Benefit Management
Compliance
​Employee Engagement
​Technology Solutions
WHO WE HELP
CFO & Finance Teams
HR Leaders
Your Employees
WHAT'S NEW
Say Hello
Benefit Trends
Picture
© 2022 GROOMS BENEFIT SOLUTIONS.
​ALL RIGHTS RESERVED.
  • Home
  • What We Do
    • Strategic Consulting
    • Benefit Management
    • Compliance
    • Employee Engagement
    • Technology Solutions
  • Who We Help
    • CFO & Finance Teams
    • HR Leaders
    • Your Employees
  • Who We Are
    • Our Culture
    • Our Office
    • Say Hello
  • Benefit Trends