Tagged: COBRA

Employers and the American Rescue Plan Act of 2021 (ARPA)

The recently enacted American Rescue Plan Act of 2021 (ARPA) is an economic stimulus bill that will inject $1.9 trillion into the American economy to accelerate the recovery from the economic downturn and health emergency caused by the COVID-19 pandemic. Of special interest to employers, the ARPA in a number of respects expands legislation enacted in 2020 to address the COVID-19 crisis, such as the CARES Act and Families First Coronavirus Response Act (FFCRA). Perhaps the most publicized aspect of the ARPA is the direct $1,400 stimulus checks to individuals. However, other aspects of the ARPA are more directly of interest to employers. Non-Mandated Extension of FFCRA-Related Tax Credits Employers are not required to, but may voluntarily provide to employees Emergency Paid Sick Leave and Emergency Family and Medical Leave that previously had been mandated under the FFCRA. This program will terminate on September 30, 2021. This means employers may grant leave under the FFCRA to employees with eligible leave remaining and continue to receive the corresponding tax credits for those leave payments until that date. Otherwise, this program would have expired on March 31, 2021. While the emergency leave extensions under the ARPA are voluntary, employers should also consider any state or local leave requirements. Under the new legislation: Employers who provide up to...

The Ins and Outs of the 100 Percent COBRA Subsidy Under the American Rescue Plan Act

As a result of the COVID-19 pandemic, employees who have been involuntarily terminated or had their hours reduced and lost their group health plan coverage face a major hardship – being able to afford the premiums for COBRA continuation coverage. The newly enacted American Rescue Plan Act of 2021 (the “Act”) addresses this hardship through a 100 percent subsidy for premiums for COBRA coverage for the six-month period from April 1, 2021 through September 30, 2021. Individuals and Coverages Eligible for the Subsidy Employees who have involuntarily been terminated or had their hours reduced, and who are currently in their 18-month COBRA continuation coverage period, are eligible for the subsidy. Their qualified beneficiaries, spouses, and dependents who were covered under the employer’s plan and lost coverage due to the employee’s involuntary termination or reduction in hours are also eligible. Domestic partners and their children, regardless of whether the employer’s plan provides COBRA-like coverage for them, are not qualified beneficiaries and therefore are ineligible for the subsidy. Eligible individuals are currently in their 18-month continuation coverage period if their involuntary termination or reduction in hours occurred on or after November 1, 2019. Individuals are eligible for the subsidy regardless of whether they previously elected COBRA and continue to be on COBRA, previously elected COBRA but discontinued...

U.S. Supreme Court Ruling in Windsor Striking Down DOMA Will Expand Workplace Protections for Employees in Legally Recognized Same-Sex Marriages

The U.S. Supreme Court issued a critical decision on June 26, 2013, striking down a provision of the Defense of Marriage Act (“DOMA”) that limited the definition of marriage for federal purposes to unions of opposite-sex couples. The Court’s ruling in United States v. Windsor will have far-reaching implications for employers, at least in those states that recognize same-sex marriages, in terms of leave administration, benefits eligibility and workplace protections. In another case decided the same day, Hollingsworth v. Perry, the Court let stand a Federal District Court ruling in California that an amendment to the California Constitution limiting marriage to opposite sex couples was unconstitutional. In neither case did the Court require all states to recognize same-sex marriages.

New COBRA Notice Form Issued by DOL

Employers are reminded that the Federal Department of Labor (“DOL”) has issued new model COBRA election notices for single employer health plans aligned with Patient Protection Affordability Care Act (“PPACA”) requirements. Under COBRA (the Consolidated Omnibus Budget Reconciliation Act), employees who experience a qualifying event, such as a loss of employment, are able to continue coverage under the employer’s group health plan for themselves and qualified beneficiaries by paying the COBRA premium. The new model notices are available on the DOL website in both English and Spanish.