By: Chris Noffke, GBDS, VP of Employee Benefits
I have been keeping my finger on the pulse of all thing’s related to employee benefits and this is one I find very important for you all to know, especially for employers who qualify for COBRA coverage (have 20 or more employees).
As you are staying up to date with the changes occurring because of COVID, one of the major changes is regarding the American Rescue Plan Act of 2021.
This plan, or part of it, provides financial subsidies covering 100% of the cost for employees already on COBRA, and for employees who will become COBRA eligible due to reduction in hours or involuntary termination between the dates of 4.1.21 and 9.30.21.
For more information please visit HR360 for detailed information. (HR360 is one of the many services WisMed Assure provides to our employee benefit clients.)
We will continue to monitor this for you. As your financial partner for life, please know we are in constant contact with our legal and compliance partners and are always looking out for regulatory changes that may have an impact on your financial security.
Title: American Rescue Plan Act of 2021 – COBRA & Dependent Care FSA
President Joseph Biden signed the American Rescue Plan Act of 2021 on March 11th. The bill contains two provisions affecting COBRA and the Dependent Care FSA.
COBRA: A full subsidy for COBRA premiums for COBRA qualifying beneficiaries when the qualifying event is involuntary termination of employment. In general, the subsidy will begin for coverage periods beginning on April 1, 2021 and ending on September 30, 2021 (Section 9501).
Dependent Care FSA: The limit for dependent care assistance plans will be increased from $5,000 to $10,500 for the 2021 calendar year (Section 9632).
I will continue to provide information as it becomes available.