April 15, 2021
Cobra Premium Assistance Subsidy (REQUIRED). If you currently offer COBRA, employees who lose coverage due to reductions in hours or involuntary termination of employment, and elect COBRA coverage, would be eligible for the subsidy from April 1 to Sept 30. The subsidy is equal to 100% of the Cobra premium, which will be covered by the ER/health plan and they would receive a credit on their Medicare taxes paid. There are some special notice requirements that have to be sent out by May 31 for those that elected coverage previously AND for those that didn’t elect coverage prior to April 1 (they now get a second chance to elect coverage). There are also special notices for anyone else it impacts between 4/1 and 9/30. Please visit the DOL’s website at: https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/cobra-premium-assistance-under-arp.pdf. If you have questions, contact your attorney or your Benefit Administrator.
Flexible Spending Accounts (OPTIONAL). Employers may elect to increase deferrals into a Dependent Care Flexible Spending Account. For 2021, the maximum amount that can be set aside tax free is increased from $5000 to $10500.
Employers may also allow carryovers or an extended grace period for health flexible spending accounts and dependent care FSA balances remaining as of the end of the 2020 plan year to the plan year ending in 2021. Additionally, employers may extend the grace period or allow carryovers of unspent FSA balances remaining at the end of the plan year ending in 2021 to the end of the plan year ending in 2022.