American Rescue Plan Contains Employment-Related Provisions

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 employers and their employees:

  • A subsidy for COBRA premiums, funded through employer tax credits
  • Extension of employer tax credits for FFCRA employee leave 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

Action Steps

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.

Highlights of the ARPA

COBRA Subsidy

  • A 100% premium subsidy is provided.

FFCRA Leave

  • The employer tax credit is extended and voluntary FFCRA leave is expanded.

Unemployment

  • $300 weekly benefit increase extended.

ACA

  • Exchange insurance subsidies are increased.

DCAP

  • Dependent Care Assistance Program contribution limits are raised.

Important Dates

  • March 10, 2021 – Congress passed the American Rescue Plan Act of 2021.
  • March 11, 2021 – President Biden signed the bill into law.
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