Buck Bond Group

The American Rescue Plan Act offers pandemic-related assistance for organizations and individuals

Focused on helping the ailing economy, the American Rescue Plan Act (ARPA) provides pension funding relief along with health, welfare, and employment measures intended to help employers and plan sponsors respond to the challenges fueled by the COVID-19 pandemic.

With a mix of required and optional provisions, how might the changes impact your organization?

Navigating the provisions of ARPA

The legislation, signed into law on March 11, 2021, includes provisions directly impacting health and welfare benefits and employment policies and practices. Congress also included significant pension funding relief for both single and multiemployer plans.

Our multi-disciplinary HR consultation teams can help you evaluate the mandatory and optional provisions to determine your next steps: Do you plan to implement a work share program? What’s your biggest COBRA subsidy challenge? Should you take advantage of the new pension funding relief, even if your plan is well-funded?

We’ll help you determine what optional measures make sense for your organization and implement the required changes. As additional guidance is issued and new developments arise, we’ll continue to add resources to this page to help you assess the impact to your business and employees.

How we can help

Pension plan funding

The legislation provides welcome cash funding relief and flexibility for pension plan sponsors. For single-employer pension plans, the new rules allow you to recoup or recharacterize some of the contributions made since 2019. While the amount of flexibility might vary, this provides a unique opportunity for underfunded, and well-funded, plans. Our actuaries can assess your organization’s specific situation and help you determine if taking advantage of ARPA relief makes sense for you.

Multiemployer plans

The multiemployer plan landscape is changing rapidly. We can help multiemployer funds assess their current withdrawal liability risk and advise how ARPA may impact both short and longer-term financial risk.

Changes to corporate tax deductibility

Publicly traded corporations are prevented from taking a tax deduction for compensation paid in excess of $1M per year to the CEO and three highest-paid executives. ARPA expands who is covered under the provision to an additional five highly compensated employees – but they are re-determined each year. It may make sense to revisit your nonqualified plan design to determine if any changes are needed.

COBRA coverage

Effective April 1, 2021, ARPA provides a 100 percent subsidy for COBRA coverage through September 30, 2021, but employers face a number of challenges administering the subsidy. We can help you identify who is subsidy-eligible, determine what constitutes an involuntary termination, review the model notices, and keep you up to date as additional guidance is published.

Labor and employment

The relief package provides new opportunities and continuing support for organizations to maintain payroll, rehire, and cover overhead costs. It builds on earlier legislation expanding unemployment benefits, increasing aid to small businesses, and extending tax credits to offset employment-related costs. Employers should review these changes and determine their impact, if any, on their operations.

Paid sick and family leave

Businesses and other organizations now have new options for extending leave for specific COVID-related reasons. If you decide to implement these options, we can assess what changes may need to be made to leave policies and employee handbooks to accommodate them.

Health and welfare provisions

We can interpret how the various provisions might apply to your organization, consult with you on your options, and make the necessary changes to your plan documents and policies and procedures to ensure you’re compliant. For example, if you’re considering increasing your maximum Dependent Care Assistance Plan (DCAP) benefit, you should consider the possible impact on your nondiscrimination testing results.

Resources

The American Rescue Plan Act on-demand webinar series

Check out our three webinars that focus on key provisions of the American Rescue Plan Act and discuss what comes next.

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Blog

Free money for pension plans! The American Rescue Plan Act of 2021

Read more : Free money for pension plans! The American Rescue Plan Act of 2021

Survey

Compliance implications of the American Rescue Plan Act (ARPA) on employment, health, and welfare benefits

Read more : Compliance implications of the American Rescue Plan Act (ARPA) on employment, health, and welfare benefits

FYI

American Rescue Plan Act provides additional COVID relief

Read more : American Rescue Plan Act provides additional COVID relief

FYI

EBSA issues COBRA subsidy model notices and FAQs

Read more : EBSA issues COBRA subsidy model notices and FAQs

Checklist

COVID-19 Compliance Check-in

Read more : COVID-19 Compliance Check-in