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New California Law Affects MSOs
A newly passed law in California will prohibit certain contractual provisions between medical and dental practices and private equity groups ...
Posted By Madilyn Moeller, Friday, May 28, 2021
President Biden signed the American Rescue Plan Act into law on March 11. The new COVID-19 relief bill includes direct checks to Americans as well as many other clauses that will impact healthcare and benefits in our country. For employers, the $1.9 million relief package will have major implications for HR and COBRA administration.
The American Rescue Plan Act (ARPA) includes a provision that creates COBRA subsidies for qualifying individuals.
Federal law requires employers with 20 or more employees to offer COBRA continuation health coverage when coverage would otherwise be terminated for a qualifying event. States laws often require smaller employers to offer COBRA continuation coverage as well. However, beneficiaries may have to pay up to 102% of premium costs out of pocket, making this an unaffordable option for some.
The ARPA changes this, at least temporarily. According to the Department of Labor's FAQ, group health plans that provide COBRA continuation coverage must offer a full subsidy to assistance eligible individuals between April 1, 2021, and September 30, 2021.
Employers have very little time to prepare for the ARPA. In fact, the COBRA subsidy requirements have already taken effect. Additionally, individuals who had a qualifying reduction in hours or involuntary termination and either declined COBRA or dropped coverage may need to be given a second chance to elect coverage.
The new law requires employers to send certain additional notices:
The ARPA is a massive piece of legislation with many other provisions that may impact employers. Included among these changes is a follow-up to the Families First Coronavirus Response Act, which created mandatory paid leave. According to the Society for Human Resource Management, the new law does not reinstate this requirement, but it does provide tax breaks for employers that provide the paid leave voluntarily.
The American Rescue Plan Act also has implications for the ACA, Medicare, Medicaid and CHIP, and it provides funding for various programs.
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