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Thursday, 04 March 2021 10:47

How ARPA Impacts Employers

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The American Rescue Plan Act, or ARPA, was signed by President Biden on March 11, 2021. The Act allowed for various extensions related to the FFCRA’s Paid Leave and FMLA provisions, relief for Health FSAs and Dependent Care Accounts, enhanced Premium Tax Credits for Marketplace coverage, and a 100% premium subsidy for COBRA coverage for Assistance Eligible Individuals (AEIs) for the period of April 1 through September 30, 2021. What does all of this mean for employers?

Within days of the announcement of ARPA, Alera prepared some great resources for employers:

In addition to Alera’s resources, you might find this article from SHRM to be helpful as far as some additional details and legal advice.

The largest impact on employers could very well be the 100% COBRA Subsidy. Here are some quick facts:

  • ARPA created a COBRA special enrollment option for all AEIs for April 1st, and the 100% subsidy applies to the time period of April 1 through September 30, 2021

  • There will be a form and process for employers to apply for the subsidies for AEIs and be reimbursed at least with their quarterly tax filings, if not sooner

  • An AEI could be any employee who experienced an involuntary termination or reduction in hours back to November of 2019 (since their 18th month of COBRA would be April of 2021)

  • This is regardless of whether they elected COBRA at that time and have paid their premiums during this time or not

  • Employees are not required to elect retroactive to the date of their qualifying event or any other date before April 1, 2021, nor pay premiums for those past periods

  • There are newly required notices that will need to be delivered to all AEIs

  • It’s expected that the COBRA vendors will handle these, and model notices will be released within 30 days of the enactment of ARPA

  • Employers who do not have an administrator will need to send the notices themselves. It will be very important to look back and start tracking any applicable involuntary terminations so that you’re prepared ahead of time.

  • In the case of Colorado State Continuation, it’s expected that the same provisions will apply to AEIs working for smaller employers, but that the carriers will be the ones paying for the coverage and recouping the cost from the federal government instead of the employer

Fall River has always strongly encouraged our clients to outsource their COBRA administration, and for those employers that haven’t yet, this is all the more reason to do so.

We recognize that the provisions created and extended by ARPA are confusing. Fall River is here for you! We will continue to track all the latest updates, so contact your Client Manager today with questions. 

Read 642 times Last modified on Wednesday, 23 February 2022 01:01
Tonya Young

Tonya is our Senior Account Manager and brings eleven years of prior insurance company expertise to Fall River, having worked at Anthem Blue Cross and Great-West Healthcare (now part of CIGNA). Tonya holds a Bachelor of Science in Psychology from Texas A&M University. Originally from Minnesota, she loves the Colorado outdoors and enjoys family time with her young daughter.