Legal Blog
Employers Required to Provide More Healthcare Coverage: What to Know
On March 6, 2021, the U.S. Senate passed the American Rescue Plan Act (the “Act”), totaling $1.9 trillion. Many important updates for employers are contained in the Act – including a change of how terminated employees receive continuing healthcare coverage consistent with the Consolidated Omnibus Budget Reconciliation Act (COBRA).
Typically, employers must offer COBRA coverage for separated employees – however, the employees must self-payfor the (very expensive) premiums. Under the legislation, employers will be required to offer paid 100% of COBRA premiums for all employees terminated due to COVID-19-related layoffs for six months after separation. The legislation reimburses employers for paying the premiums via a payroll tax credit, which will be applied against quarterly taxes – and will only provide the benefit through September 30, 2021. Unlike “regular” COBRA, coverage under the Act will not extend to employees that resigned during the applicable time period.
Assuming the Act is signed into law, the COBRA-related provision will require that employers change how they issue COBRA notices after termination of employment. Further, the benefit will apply to anyone that could have opted to obtain COBRA coverage from November 2019 (18-months from April 2021 when the Act will be effective). This retroactive requirement puts the onus on employers to properly issue retroactive revised notices. More guidance is expected in the coming weeks from the Department of Labor.
Feel free to reach out to me to discuss your team’s legal compliance with the Act.
Contact me at tstringham@offitkurman.com or 703.745.1849
ABOUT THEODORA STRINGHAM
tstringham@offitkurman.com | 703.745.1849
Theodora Stringham assists individuals, businesses, and organizations with growing successfully while minimizing liability. Focusing on real estate and personnel needs, Ms. Stringham executes sustainable plans for real estate development and employee matters. She provides comprehensive representation for everyday growth issues, including, but not limited to, re-zonings, site plan approvals, eminent domain/valuation concerns, employment discrimination, and disciplinary issues. Ms. Stringham’s scope of representation ranges from identifying potential liability and providing counseling/trainings, all the way through representation at trial.
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