The American Rescue Plan Act & Impact on Employers

The American Rescue Plan Act & Impact on Employers

On March 10, 2021, Congress passed the American Rescue Plan Act of 2021 (ARPA) and the President signed it into law on March 11, 2021. The ARPA includes over $1.9 trillion in COVID-19 relief and contains updates to certain benefits laws to help employees who have been affected by the pandemic.

More details about ARPA are available here from Benefits Partners/NFP. Acumen maintains a partnership in Benefits Partners, a national corporate benefits organization, providing benefits industry expertise.

Some of the major benefits-related provisions of ARPA affect the following:

  • COBRA – The ARPA provides a 100% premium subsidy for qualified beneficiaries who elect coverage through COBRA, including state continuation programs, effective April 1, 2021. Click for expanded details.
  • ACA Premium Subsidy – ARPA reduces the amount that individuals would pay for plans in the exchanges.
  • Dependent Care FSA (DCAP) – Provides a temporary increase to a participant’s DCAP reimbursement amount in a calendar year from $5,000 to $10,000 (or $2,500 to $5,250 if the employee is married filing separately).