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How the American Rescue Plan affects COBRA and dependent care plans

The American Rescue Plan (ARP) Act of 2021 includes COBRA subsidies and increases dependent care account maximums to help Americans.

COBRA premium assistance

  • Individuals may have 100% of COBRA premiums paid for a period of up to six months beginning on April 1, 2021. 
  • Individuals will have a second opportunity to elect COBRA with a 60-day election period. 

Dependent care account maximums

The plan maximum for dependent care (DCAP) has temporarily increased for the taxable year beginning in 2021.

  • From $2,500 to $5,250 for married filing single 
  • From $5000 to $10,500 for married filing jointly 

See our FAQ for more information

Read our FAQ for details about the assistance, eligibility, notifications, employer billing, and more.

Note: This information is the current interpretation of the American Rescue Plan Act of 2021 as it relates to COBRA, and is subject to change. There are still many unanswered questions related to COBRA subsidies, and all clients are advised to seek legal or tax consultation for additional guidance.