American Rescue Plan - Summary
The House of Representatives voted to approve the $1.9 trillion COVID-19 relief package, known as The American Rescue Plan Act of 2021. The bill will now go to President Biden's desk, who is expected to sign the legislation.
The American Rescue Plan will now provide 100% COBRA subsidies from April 1 to September 30, 2021. HHS, Treasury and the DOL are now tasked with providing guidance as to how the COBRA subsidies will be administered.
The American Rescue Plan will also increase ACA subsidies available to individuals in the exchange by capping the cost of premiums at 8.5% of household income for the benchmark plan. These premium subsidies will extend through 2022.
The Act does include some additional PPP funding, however, the program takes a noticeably smaller role in this package. An additional $7.5 billion was approved, included is expanded eligibility to larger not-for-profit entities and other organizations that did not previously qualify. The current application deadline of March 31, 2021 will remain in place.
Families will benefit from an increase in the child tax credit from $2,000 up to $3,600 per child up to five years old and $3,000 per child ages six through seventeen. Families will also benefit from an increase in the amount that can be set aside for a dependent-care FSA. For 2021, the increased threshold is $10,500 instead of $5,000. Employers must adopt this provision in order for employees to increase their elected funds for their dependent-care FSA, however, it is not mandatory.
Additional provisions include:
$1,400 stimulus payments for those who qualify; incentives for states to expand Medicaid; elimination of the Medicaid drug rebate cap; extension of unemployment benefits of $300 per week through September; $47.8 billion for national evidence-based testing strategy.
We will have additional updates on our COVID-19 resource page.