By Summer Westerbur

On March 11, 2021, The Biden Administration passed the American Rescue Plan Act (ARPA) to address the economic impacts of COVID-19. ARPA provides a 100% subsidy if the employee’s work reduction or termination was involuntary. Those subsidies end September 30, 2021. This is an important time for business owners to consider compliance. 

Business owners should consider working with their COBRA administrator to ensure employees pay their insurance premium October 1st. There are notification deadlines business owners are responsible for sending out. Employees who do not want to pay the premiums will need to be terminated from the plan. This is the employer’s responsibility. Most carriers will not allow you to remove them at a future date. This is the year businesses should really consider a third-party administrator. It is the employer’s responsibility to sign up and pay for these services. These companies typically offer compliance for ACA reporting, ERISA, COBRA, HIPAA, and SPD. 

Businesses that do not remain in compliance risk facing penalties. For each of the seven years of ACA employer reporting, the IRS granted an automatic extension and provided a “Good Faith” understanding. This means that as long as employers could show they were acting in the best interest of their employees, the IRS would acknowledge that any errors represented in reporting were made in good faith, reducing penalties and fines. We are anxiously waiting for an announcement from the IRS. It is still possible that we will have another automatic extension, but “Good Faith” is in jeopardy. As reporting continues in 2021 and 2022, we must all make an effort to remain in compliance and be 100% accurate with IRS filing and reporting.

This is also a good time to focus on other compliance services. Are you sending out 5500s? The IRS and DOI are going to be looking for ways to recoup some of the costs of these subsidies. It is always important for a business to have a competent CPA and HR attorney and that is especially true this year with these complicated subsidies. 

The penalty chart below is provided by our partners at Medcom. 

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We are also approaching open enrollment, the time businesses will begin shopping rates for their employee benefits packages. Make sure a compliance package is included! 

For more information, please contact Summer Westerbur at or call (719) 331-1832.