The American Rescue Plan Act of 2021 (ARPA) included a provision to help unemployed workers by authorizing a 100% subsidy of COBRA health insurance premiums from April 1, 2021, to September 30, 2021. Current and former employees who qualify for the COBRA subsidy must be notified by May 31, 2021, and have 60 days to make an election.
The ARPA required the Department of Labor (DOL) to issue model notices within 30 days of the enactment date of the legislation (March 11, 2021), and the DOL issued those model notices on April 7, 2021. The DOL also released answers to frequently asked questions (FAQs) related to the ARPA COBRA subsidy.
The DOL has provided the following ARPA COBRA subsidy model notices:
Model General Notice and COBRA Continuation Coverage Election Notice — For use by group health plans for qualified beneficiaries who have qualifying events occurring from April 1, 2021 through September 30, 2021. Employers may provide it as a supplement to standard COBRA election notices or incorporate the notice’s terms into a COBRA election notice.
Model Notice in Connection with Extended Election Period — For use by group health plans for qualified beneficiaries currently enrolled in COBRA continuation coverage, due to a reduction in hours or involuntary termination (Assistance Eligible Individuals), as well as those who would currently be Assistance Eligible Individuals if they had elected and/or maintained COBRA continuation coverage.
Model Alternative Notice — For use by insured coverage subject to state continuation requirements between April 1, 2021 and September 30, 2021.
Notice of Expiration of Period of Premium Assistance — For use by group health plans to notify Assistance Eligible Individuals 15-45 days before their premium assistance expires.
Summary of the COBRA Premium Assistance Provisions under the American Rescue Plan Act of 2021 — For use by qualified beneficiaries to understand eligibility criteria and deadlines with a form for qualified beneficiaries to request treatment as an Assistance Eligible Individual.
The model notices must be customized with specific information about the eligible individual as well as the employer’s group health plan. Failure to send these required notices could result in an excise tax of up to $100 per qualified beneficiary (not to exceed $200 per family) for each day the notice is not provided or is late.
ARPA COBRA FAQs
In addition to the model notices, the DOL also released new guidance in a question-and-answer format (FAQs):
- COBRA Premium Assistance under the American Rescue Plan Act of 2021 FAQs
- General COBRA FAQs for Workers
In the FAQs, the DOL has clarified that the COVID-related relief for providing notices under EBSA Disaster Relief Notice 2021-1 does not apply to the notice and election time requirements under ARPA for the COBRA subsidy.
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