Wednesday, April 21, 2021
As described in our March 15, 2021 update, the American Rescue Plan Act of 2021 (the “Act”) created a temporary, 100% subsidy for assistance-eligible individuals’ premium payments for continuation health care coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), harkening back to past relief subsidizing COBRA continuation coverage under the American Recovery and Reinvestment Act of 2009. On April 7, 2021 the Department of Labor released four model notices (available here) employers and plan administrators may use to comply with the additional notice requirements with respect to the subsidized COBRA continuation coverage, along with a summary of the premium assistance provisions of the Act and Frequently Asked Questions ( FAQ ) about implementation of the premium assistance.
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As described in our March 15, 2021 update, the American Rescue Plan Act of 2021 (the “Act”) created a temporary, 100% subsidy for assistance-eligible individuals’ premium payments for continuation health care coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), harkening back to past relief subsidizing COBRA continuation coverage under the American Recovery and Reinvestment Act of 2009. On April 7, 2021 the Department of Labor released four model notices (available here) employers and plan administrators may use to comply with the additional notice requirements with respect to the subsidized COBRA continuation coverage, along with a summary of the premium assistance provisions of the Act and Frequently Asked Questions ( FAQ ) about implementation of the premium assistance.
Thursday, April 15, 2021
The recently enacted American Rescue Plan Act of 2021 (ARP), signed into law on March 11, 2021, includes a 100% COBRA subsidy for certain individuals for up to a six-month period from April 1, 2021 through September 30, 2021. On April 7, 2021, the U.S. Department of Labor (DOL) issued guidance in the form of Frequently Asked Questions (FAQs) regarding the ARP COBRA subsidy. This bulletin contains a brief recap of the ARP COBRA subsidy, pertinent portions of the FAQs, and considerations for employers and plan sponsors.
Summary of the ARP COBRA Subsidy
The ARP includes a 100% COBRA subsidy for “Assistance Eligible Individuals” for up to six months from April 1, 2021 through September 30, 2021. In other words, no COBRA premiums may be collected from Assistance Eligible Individuals during this time (or any premiums that were collected will need to be refunded or credited against future payments) and such Assistance Eligible Individuals must b
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As discussed in our prior blog post, the American Rescue Plan Act of 2021 (ARP) requires employers that sponsor group health plans to provide a 100% COBRA subsidy for “Assistance Eligible Individuals” during the “Subsidy Period” (April 1 through September 30, 2021, or the date the participant is no longer an Assistance Eligible Individual, if earlier) and to offer a COBRA special election opportunity for certain individuals to enroll in COBRA coverage in order to receive the benefit of the COBRA subsidy.
In connection with this COBRA relief, the ARP also requires employers who are subject to its COBRA relief provisions to distribute COBRA notices that explain the COBRA subsidy, COBRA special election opportunity, and other optional COBRA relief (if an employer chooses to implement the optional relief). In addition, the ARP requires employers to notify Assistance Eligible Individuals who receive the COBRA subsidy
As we described in our
March 15, 2021 LawFlash, the American Rescue Plan Act of 2021 (ARPA) includes a 100% COBRA premium subsidy for any employee or dependent who is a COBRA qualified beneficiary (or will become one) resulting from an involuntary termination of employment or a reduction of hours (referred to as an Eligible Individual).
The APRA requires plan sponsors to provide specific notification of the COBRA premium subsidy to Eligible Individuals, along with notification of any early termination of the subsidy prior to September 30, 2021 (with certain exceptions). In addition, the ARPA requires the secretary of the Department of Labor, in consultation with the secretary of the Department of the Treasury and the secretary of the Department of Health and Human Services (collectively, agencies), to provide model notices within 30 days of enactment. In accordance with that requirement, the Department of Labor’s Employee Benefits Security Administration issued model notices on