Benefits Counselor – May 2021 - Employment and HR mondaq.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from mondaq.com Daily Mail and Mail on Sunday newspapers.
Who Needs to Know
Why It Matters
The May 31 deadline to notify workers about new COBRA continuation coverage rights is rapidly approaching. Many employers still have questions about who should receive this notice. This alert provides a step-by-step guide to help answer this question.
By now you re aware that the American Rescue Plan Act (ARPA), signed into law by President Biden on March 11, provides a six-month COBRA subsidy for individuals who lose health coverage due to an involuntary termination of employment or reduction of hours. We re also certain that you re aware of the looming May 31 deadline for distribution of the new
Section 9501 of the American Rescue Plan Act of 2021 (the ARPA )
1 requires certain employers to
offer free COBRA coverage to certain individuals between April 1,
2021 and September 30, 2021. The ARPA provides tax credits to
employers to offset the cost of the COBRA coverage. The right to
free COBRA coverage extends to some individuals whose right to
COBRA coverage previously ended.
The original version of this
blogpost, written shortly after passage of the ARPA, reviewed
eligibility free coverage and extended coverage, how the tax
credits work, and potential issues pertaining to insurance
coverages. On April 7, 2021, the Department of Labor (the DOL ) issued guidance on the law in the form of
of COBRA Premium Assistance Provisions under the American Rescue Plan Act of 2021 (including a “Request for Treatment as an Assistance Eligible Individual” Form)
The “summary” portion of this notice must be included with all three notices listed above: (i) the General Notice; (ii) the Notice in Connection with Extended Election Period; and (iii) the Model Alternative Notice. The “request” portion enables individuals to request premium assistance or to discontinue it.
Next Steps and Takeaways
With the model notices now available, employers are well-advised to begin the notification process for impacted employees, including by contacting their COBRA vendors and administrators to ensure that each AEI receives the appropriate notice. In particular, employers should not overlook those AEIs eligible for a “second chance” notice, which must be sent to them no later May 31, 2021.
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The Department of Labor ( DOL ) has issued model notices regarding COBRA premium
assistance (a/k/a COBRA subsidies). As we wrote about here, as part of the American Rescue Plan Act
of 2021 (the Act ), Congress sought to enable qualifying
individuals - known under the law as Assistance Eligible
Individuals or AEIs - to continue their
healthcare coverage by subsidizing their COBRA premium payments for
the period between April 1 and September 30, 2021. We discuss
these notice requirements and related issues below.
The COBRA Subsidy Notices
For Qualifying Events Occurring