The House of Representatives has passed by a vote of 219-212 the American Rescue Plan Act of 2021 to provide additional relief to address the continued impact of COVID-19. Noteworthy retirement and health provisions include the following.
- Freezing of cost-of-living adjustments after 2030 for retirement plan annual additions and compensation cap limits
- Extending defined benefit single-employer plan funding shortfall amortization period from 7 to 15 years beginning with 2020 plan years
- Extending single-employer pension plan funding stabilization percentages, with the 10 percent interest rate corridor reduced to 5 percent effective in 2020 and phase-out of the 5 percent corridor delayed until 2026
- Health benefit provision granting premium assistance to cover 85 percent of the cost of COBRA continuation coverage, and extending the COBRA election period
- Refundable tax credit reimbursing employers and plans that paid a subsidized portion of the premium on behalf of an assistance-eligible individual
The Senate is likely to take up and debate later this week a version of the bill that, once passed, would need to return to the House. The Senate parliamentarian is also expected to weigh in on whether multiemployer pension bailout relief and premium subsidies for laid-off workers through COBRA can be included in the bill. While legislation created through the budget reconciliation process can be passed through the Senate with a simple majority vote—additional restrictions apply—including that provisions be predominantly fiscal in nature.