American Rescue Plan includes important health care provisions

The recently-enacted American Rescue Plan includes several elements of special interest to workers and their unions, NewsGuild Executive Vice President Marian Needham reports.

One little noticed benefit is a provision that grants a 100% subsidy for six months of health care premiums for COBRA-eligible people who lose their jobs or eligibility for employer coverage for the period from April 1 to Sept. 30, 2021.

Under the legislation, those employees will not have to pay any premiums for six months. The employer or health plan can claim a refundable tax credit against their Medicare payroll tax liability for the cost of the premiums.  

Employees who were laid off or lost insurance coverage as far back as March 1, 2020, are eligible to elect COBRA retroactively, but the free coverage is applicable only from April 1, 2021, to Sept. 30, 2021. Employees who did not elect COBRA are not required to pay for retroactive coverage for the time since they lost coverage, Needham said.

“Employers are legally required to send notice of eligibility to those who qualify for the benefit, but it might be advisable for Guild leaders to check with employers to see what information is being provided to eligible employees,” Needham wrote in an email to local officers and staff.

COBRA, the Consolidated Omnibus Budget Reconciliation Act of 1985, allows eligible employees and their dependents the continued benefits of health insurance coverage when an employee loses their job or experiences a reduction in work hours.

To be eligible for COBRA coverage, employees must have worked for an employer with more than 20 employees and been enrolled in their employer’s health plan during their employment. The health plan must continue to be in effect for active employees.  A Wall Street Journal article provides additional details on eligibility for COBRA subsidies.

A piece provided by Baratz and Associates, the accounting firm used by several Guild locals and The NewsGuild’s pension plan, describes the Paycheck Protection Plan forgivable loan program. The deadline for loan applications is May 31.

In addition to the COBRA provisions, the AFL-CIO’s, “20 Ways the American Rescue Plan Helps Working People,” outlines other provisions of the law that benefit workers. Number 11 reflects a change that, in some circumstances, makes labor unions with staff eligible for forgivable loans under the Paycheck Protection Plan.