The headlines from the American Rescue Plan Act are all about the $1400 recovery rebate credits.

But for employers, there are a lot more details about the tax issues and employee benefit issues that are contained within ARPA.

My colleagues have prepared a thorough summary on our sister blog, Employment Law Letter.  One item that employers should focus on concerns a new COBRA subsidy in place for the next 5 months or so.

As my colleagues have explained:

ARPA provides an “assistance eligible individual” (an ARPA-defined term that generally means a person eligible for COBRA whose employment is terminated by the employer, not from the employee voluntarily terminating his or her employment) with no-cost COBRA premiums during the portion of the person’s COBRA coverage period beginning with the month of April (e.g., the first month beginning after ARPA is enacted) and ending on September 30, 2021.  (Note that the COBRA premium assistance ends when the assistance eligible individual becomes eligible for coverage under another group health plan or under Medicare.)

ARPA defines assistance eligible individual to include both the employee and his or her eligible qualified beneficiaries, and also applies the COBRA premium assistance benefit to persons whose qualifying events precede the enactment of ARPA.

ARPA also permits an assistance eligible individual who elects COBRA to choose to enroll in a group health plan that is different from the plan the person was enrolled in at the time of his or her qualifying event, provided that the employer chooses to offer that choice to the assistance eligible individual. ARPA provides for special notices that must be furnished to an assistance eligible individual to notify him or her of these special COBRA rules.

For employers, this is a two-fold issue. For those employees who are already on COBRA, employers should be updating them on their rights to receive this new COBRA subsidy. For employees who become COBRA-eligible, employers should further notify them of their rights to receive this new COBRA subsidy as well.

For more details, check out the full post here.