As we unwrap the provisions of the American Rescue Act of 2021, passed by Congress and signed into law by President Joe Biden on March 11, a point to note is it is a much needed shot in the arm for Americans weary of the devastating effects of the year long and continuing COVID-19 pandemic. While space does not allow a detailed review of all of the Act here, some major points include, in addition to vaccine distribution assistance, relief in the form of stimulus checks, federal unemployment supplements, support for local governments and several businesses, and health insurance enrollment extensions. Some of the provisions are temporary but the massive influx of cash into the economy has, among other things, been described as one sign of hope going forward. The hope is that this will tide us over while incentivizing Americans to be vaccinated and end the most harmful effects of the pandemic. Key, of course, is availability of the vaccines and this is also addressed in the Act. Here are some provisions that may affect you.
- Stimulus Checks. The much publicized $1,400 stimulus checks to Americans are a major provision of the Act and are expected to be issued soon. There are differences from the prior two stimuluses issued last year during the prior administration. The cutoff generally for the full $1,400 is a maximum of $75,000 per year Adjusted Gross Income, $112,500 for heads of household, and $150,000 for couples filing jointly. You might still receive some, but not as much, if your AGI is up to $80,000 for singles, $120,000 head of household, or $160,000 for couples filing jointly. This can be based on the most recent tax return. One idea is to pump money into the economy to get it moving and back on track. A significant change, especially to parents and families who care for and support elders is extension of the provision to include otherwise excluded individuals. Prior stimuluses excluded consideration for dependents over age 17 and elderly dependents and older disabled dependents. If, for instance, you claim your elderly parent who lives with you, or your college student daughter or son, or older disabled child in your household as dependents in your tax returns, stimulus checks are also included for aid regarding them.
- Tax Credits for Children. There are provisions for significant additional tax credits for children dependent on age.
- Unemployment Assistance. The long awaited extension to federal unemployment supplement assistance also passed at $300 per week. Unemployment adjustments might take some time but on the way.
- Vaccines. $14 billion is allocated for vaccines and $7.6 billion to hire 100,000 public health workers to administer the vaccines. Vaccines are to be offered free of charge.
- Schools. Funds are provided for K-12 schools to provide for safe reopening. This includes hiring staff, avoiding layoffs, PPE, modifications to ventilation systems and other. There is an additional $5.1 billion in aid for the same type of assistance for universities and colleges.
- Specific Businesses and Industries. There are provisions for restaurants and bars, the travel industry including airlines and airports, and special help for music venues and performance space such as local theatres. There, qualifying applicants can apply for what are referred to as a Shuttered Venue Operators Grant. While they are waiting for approval they can also apply for the PPP2 loan without offset.
- Health Insurance. For employees who were laid off and need assistance with health insurance, in addition to the extended enrollment for application for the ACA Marketplace, the Act will subsidize the entire cost for COBRA extended coverage for 18 months. Anyone who has gone through the process knows that, while COBRA can extend prior employer-related health insurance coverage it has done so at such high premiums many fail to sign up. This provision addresses the problem by temporarily covering the entire COBRA premium cost.
- Marketplace Tax Credits for Health Insurance. The Act temporarily increased tax subsidies for health insurance purchased through the Affordable Care Act marketplace. Bottom line is that this action will make premiums more affordable for a larger group of people.
As indicated, it is not possible to review all significant provisions but this is to give you a head start.
Esquire, Colliton Law Associates, P.C. Janet Colliton has practiced law for over 38 years, 37 of them in Chester County, Pennsylvania, a suburb of Philadelphia. Her practice, Colliton Law Associates, PC, is limited to elder law, Medicaid, including advice, applications and appeals, and other benefits planning including Veterans benefits, life care and special needs planning, guardianships, retirement, and estate planning and administration.