American Rescue Plan Act

Updated: 7/13/2022

On March 11, 2021, President Biden signed into law H.R. 1319 – the American Rescue Plan Act (the "Act"), which provides approximately $1.9 trillion in further support and stimulus to individuals, businesses and other organizations, as well as state and local governments affected by the COVID-19 pandemic. Here are selected highlights that may be relevant for employers. The Act contains many different funding and support programs beyond what is described below.

Note: Some of the content on this page has been removed because it was based on a provision in the law that now has expired.

Increased Affordable Care Act (ACA) Premium Subsidies

Affordable Care Act (ACA) premium subsidies are increased through 2022, in effect decreasing the required individual contribution. The Act provides a 100 percent subsidy for ACA coverage for unemployed persons and people earning up to 150 percent of the federal poverty level for two years. Individuals earning below 150 percent of the poverty level must currently pay up to four percent of their income.

The Act expands ACA subsidies for people with income over 400 percent of the federal poverty level, who were previously ineligible. Premium costs are now capped at 8.5 percent of income. Individuals who receive unemployment insurance at any time in 2021 will be able to obtain ACA coverage at no cost.

Pension Provisions

The Act provides taxpayer assistance for underfunded multiemployer pension (MEP) plans. The Pension Benefit Guaranty Corporation is authorized to offer financial assistance to eligible MEP plans which meet certain criteria, such as having been approved by the Treasury Department to reduce participant benefits or being in critical and declining status in any plan year from 2020 through 2022. The bill also increases MEP premiums to $52 per participant in 2031 and then indexes the rate to inflation. The Act makes specified changes to funding for single-employer pension plans as well.