President Biden signed the 1.9 trillion 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 employers and their employees:
- A subsidy for COBRA premiums, funded through employer tax credits
- Extension of employer tax credits for FFCRA employee leaves voluntarily provided through Sept. 30, 2021
- Expansion of employee earnings eligible for the FFCRA tax credit
- Inclusion of testing and immunization as reasons for FFCRA leave
- Extension of $300 increase in weekly unemployment benefits
- Extension of weekly unemployment benefits for workers who otherwise wouldn’t qualify for these benefits
- Expansion of subsidy for ACA premiums
- Increase in DCAP contribution limits
- Extension and expansion of the employee retention tax credit
We are currently working with our ERISA attornies and vendors to determine how it impacts our clients and will be reaching out as we have more information on what employers need to do to address COBRA subsidy requirements, adopt the optional and temporary increase to the Dependent Care FSA limit and more. We will have additional details within the next week.
In the meantime, employers should review the ARPA’s provisions to identify any requirements and opportunities that apply to them. Employers are also advised to watch for official guidance on the implementation of the law.