Mar 12, 2021

American Rescue Plan Act of 2021 (ARPA)

On March 11, 2021, President Biden signed into law the $1.9 trillion American Rescue Plan Act of 2021 (ARPA, the Act).

ARPA is the result of weeks of negotiations in Congress and attempts to further facilitate the country’s recovery from the impact of the COVID-19 pandemic. The Act includes a provision which creates a 100% COBRA premium subsidy for the period of April 1 through September 30, 2021 – extending additional COBRA enrollment rights for certain qualified beneficiaries (and their families) who have lost group health plan coverage due to an involuntary termination of employment or reduction of hours. These members are referred to as Assistance Eligible Individuals (AEIs). ERISA governed plan sponsors will subsequently receive reimbursements for the subsidy through a tax credit. 

We are awaiting future guidance from the Department of Labor in terms of the specifics for how to administer the subsidy.  We will share these updates as they become available.  

View frequently asked questions under the American Rescue Plan Act (ARPA) here.