Dependent Care FSA Increase and 100% COBRA Subsidies Passed by Congress

On March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 (ARPA). 

The ARPA brings two big benefits changes.

1. 100% COBRA subsidies: from April 1, 2021 through September 30, 2021 for individuals and family members who lost health plan coverage due to involuntary employment termination or reduction of work hours.
2. Dependent Care FSA maximum increase: for the 2021 tax year, the amount that can be contributed to an employer-sponsored dependent care assistance program (aka a DCAP or dependent care FSA) is increased from $5,000 to $10,500 (or $5,250 if married filing separately).

100% COBRA Subsidies: What Employers Need to Know

On Tuesday, March 23, 2021, benefits compliance attorney Marilyn Monahan walked us through the COBRA subsidies. The slides and webinar recording are available in the HR for HR community!

Marilyn addressed these pressing questions:

• Who is eligible?
• Who pays for the subsidies?
• What are the employer notice obligations?
• How does this interact with the Outbreak Period?
• And more FAQs!