ARPA: What You Should Know

President Biden signed the ARPA (American Rescue Plan Act) as a law on March 11, 2021. This new stimulus package has some important additions to the other COVID-19 stimulus packages we have already received and also makes some changes to those other programs. Here are some important items for you to know about if you are an employer.

Coverage Subsidies for COBRA Are Extended

Anyone who lost insurance coverage through work due to involuntary termination or a reduction of hours, the ARPA will subsidize 100% of the cost of their COBRA premiums between April 1^st and September 30^th, 2021. Even if they have previously declined COBRA coverage or dropped the coverage after enrolling for a period of time, they can still qualify for this subsidy through the ARPA.

Health Insurance Exchange Marketplace Got More Health Premium Tax Credits

While some people may not have qualified for a federal subsidy for their health insurance coverage through the Health Insurance Exchange Marketplace before, expanded eligibility through the ARPA may positively affect them. For the next two years, The ARPA will eliminate the current income cap of 400% of the federal poverty level in order to qualify for premium tax credits.

Unemployment and Sick Leave Tax Credits Get Extended

The expanded Unemployment Assistance benefits have been extended to September 6, 2021. Similarly, the Family and Sick Leave Provisions were given an extension to September 30, 2021.

Assistance for Dependent Care

Normally Dependent Care FSA participants have a $5,000 annual election max per family but for the 2021 tax year, your employees can increase elections to $10,500. If their 2021 plan year is already in effect employers can retroactively apply the expanded coverage to the Cafeteria plan.

Health Insurance Assistance for Businesses

There are several options available depending on the situation to offset a business’s group health insurance coverage.

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