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Posted by: Altura Benefits in Insurance
President Biden signed the American Rescue Plan Act into law on March 11, 2021. While many people have focused on the $1,400 stimulus payments, the coronavirus relief bill includes many other provisions. Many of these provisions will have a significant and direct impact on healthcare.
According to the Center on Budget and Policy Priorities (CBPP), “The American Rescue Plan Act will make comprehensive health coverage more affordable and accessible for millions of people during the current crisis.”
Here’s a look at some of the key healthcare-related provisions in this massive $1.9 trillion plan.
The new law includes federal subsidies to help eligible individuals and their families stay on their employer-based coverage using COBRA continuation coverage. The subsidies cover 100% of the premium.
According to the National Law Review, the COBRA subsidies apply to individuals who would be eligible for COBRA coverage any time between April 1, 2021 and September 30, 2021 due to a reduction in hours or involuntary termination of employment for any reason other than gross misconduct.
The new law does not extend the normal coverage period for COBRA, but it does require employers to offer an additional special election period to some individuals who were eligible for COBRA but either did not elect coverage or elected and then discontinued coverage. Additionally, employers must send out notices regarding the special election opportunity, beneficiaries who are newly qualified for the subsidies, and termination of the subsidy.
The American Rescue Plan Act may make COBRA more attractive to enrollees, but it can also make the ACA Marketplace more attractive.
Before the American Rescue Plan Act passed into law, a new Special Enrollment Period for the Health Insurance Marketplace was announced. This Special Enrollment Period is currently set to end on August 15, 2021, and it gives people who are eligible for Marketplace coverage another opportunity to enroll in a plan or switch plans.
Now, more people may be eligible for premium subsidies. The new relief bill temporarily increases the maximum amount that people can earn and still me eligible for subsidies. It also increases the amount of the subsidies. According to HealthCare.gov, enrollees can choose to update their application and plan selection to receive the larger subsidies immediately, or they can wait until they file their taxes to reconcile the amount.
The American Rescue Plan Act includes funding for healthcare related to the coronavirus.
The FDA has authorized three COVID-19 vaccines for emergency use. Currently, states are in the process of getting as many people vaccinated as possible. The American Rescue Plan Act includes funding that is allocated toward the COVID-19 vaccine and its distribution. The law also includes funding for supplies, such as personal protective equipment, and testing.
The pandemic has exacerbated mental health and substance abuse issues for many individuals. According to Medical News Today, numerous studies have shown an increase in mental health symptoms and substance use. For example, a study from the U.S. Census Bureau showed that 42% of people reported anxiety or depression symptoms in December 2020 – up from 11% in 2019.
The American Rescue Plan Act addresses this with funding allocated toward behavior health disorders, including mental health and substance use disorder block grants.
The Families First Coronavirus Response Act (FFCRA) included mandatory paid family and medical leave for eligible workers under certain COVID-related conditions. However, those requirements expired on December 31, 2020.
The American Rescue Plan Act does not make the FFCRA paid time off mandatory again, but it does temporarily reinstate the related tax credits for employers who choose to continue offering the paid family and medical leave. According to the National Law Review, the tax credit is available from April 1, 2021 to September 30, 2021, and the credits may be claimed against the employer’s share of Medicare taxes.
The American Rescue Plan Act also includes funding to help increase access to childcare. During the pandemic, many children have switched to remote education, putting a burden on working parents. According to the Bipartisan Policy Center, the American Rescue Plan Act includes $39 billion in funding for the Child Care and Development Block Grant, as well as a permanent increase to the mandatory Child Care Entitlement to states. This funding includes allocations for essential workers with no income limits on families who are eligible for funds.
The American Rescue Plan include several provisions that impact Medicaid and the Children’s Health Insurance Program (CHIP).
According to the CBPP, 14 states have not implemented the ACA’s Medicaid expansion. The American Rescue Plan Act increases the financial incentives for these states to do so.
Other changes to Medicare and CHIP include an optional extension of postpartum coverage, as well as an elimination of the drug rebate cap and mandatory coverage for the COVID-19 vaccine and treatment with cost sharing.
This is a massive bill with many other provisions and details, some of which will also impact healthcare. Some of the other provisions include funding for states, territories and Tribal governments, grants for rural healthcare providers, and funding for public health workforce support.
Other provisions that are not directly related to healthcare include extended unemployment benefits, changes to child tax credits, funding for housing programs and tax-free unemployment compensation and student loan forgiveness. The American Rescue Plan Act also includes funding for the Occupational Safety and Health Administration (OSHA), including funding allocated toward enforcement at high-risk workplaces. The law also includes funding to support skilled nursing facilities.
You can read the full text of the American Rescue Plan Act here or the breakdown by the National Conference of State Legislatures here.
Many of the provisions in the American Rescue Plan Act impact employers and the benefits they offer. Among other things, employers have new COBRA notices to send and new tax credits to take. There is a lot for employers to review, and many updates and changes may be needed to keep an employer’s benefit program compliant.
If you need guidance, Altura Benefits is here for you. Contact us to learn more.
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