New Legislation for Health and Benefits plans 3.11.21

On March 11, 2021, President Joe Biden signed into law The American Rescue Plan Act of 2021, a $1.9 trillion economic stimulus bill passed by the 117th United States Congress, to speed up recovery from the economic and health effects of the COVID-19 pandemic.

This is the most recent legislation to make changes to employee benefit plans. The American Rescue Plan Act of 2021 includes the following provisions for employers offering 

Optional Dependent Care Flexible Spending Account Limit Increase

• The Dependent Care FSA limit has increased from a maximum of $5,000 to $10,500. Retroactive adoption is allowed back to January 1, 2021 through December 31, 2021. We are hopeful this increase will be permanent.

COBRA Provisions* (does not impact FSA plans, excepted benefit plans, or QSEHRAs)

• COBRA premium subsidies will be available to eligible individuals effective April 1, 2021 through September 30, 2021.
• Plan enrollments may be updated, if allowed by the employer.
• DOL Model Notice requirements and obligations changed.

^*Please contact your COBRA administrator for more specifics on how these provisions impact your applicable plans and the impact on the extension of COBRA deadlines due to the COVID-19 Outbreak Period.

Past legislation includes Disaster Relief Notice for Employee Benefit Plans, IRS Notice 2021-15, and the Consolidated Appropriations Act, 2021. We made this guide to help you understand these changes and how they affect HSA, HRA and FSA Plans.

We will keep you apprised of any future developments. If you have any questions, or if you offer FSAs or HRAs and have not yet confirmed with us your plans to extend your claims runout period (if applicable), please contact us at health@pnfp.com.

Our team is keeping a watchful eye on this legislation as we receive further clarification from the IRS. As soon as we know more, we will send an update.