The Department of Labor (“
FAQs”) about COBRA Premium Assistance under the American Rescue Plan Act of 2021 (“
ARPA”). In addition to issuing the FAQs, the DOL issued model notices and announced a new website dedicated to the COBRA premium subsidy under ARPA, which can be found at the following link: https://www.dol.gov/agencies/ebsa/laws-and-regulations/laws/cobra/premium-subsidy.
The COBRA subsidy provisions of ARPA have three major components:
It provides up to six months of fully subsidized COBRA premiums, along with certain special election rights, for eligible COBRA qualified beneficiaries;
It imposes two new notice requirements on employers; and
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Takeaway Message. The Department of Labor (“DOL”) has recently issued model notices and forms that can be used to comply with the new subsidized COBRA requirements created by the American Rescue Plan Act of 2021 (“ARPA” or “ARP”). Plan sponsors should work promptly with their in-house benefits team, COBRA service providers, and carriers (if applicable) to discuss the distribution of these notices to ensure compliance.
Background.
On April 7, 2021, the DOL issued FAQs, model notices, and model forms for the implementation of the COBRA subsidy requirements set forth in ARPA. As discussed in more detail in our prior post, ARPA requires group health plans to provide fully-subsidized COBRA coverage to assistance eligible individuals (“AEIs”) from April 1, 2021 through September 30, 2021 (the “Subsidy Period”). Generally, an AEI is an individual who becomes COBRA eligible (or became COBRA eligible gene
The Department of Labor
(
FAQs ) about COBRA Premium
Assistance under the American Rescue Plan Act of 2021
(
ARPA ). In addition to
issuing the FAQs, the DOL issued model notices and announced a new
website dedicated to the COBRA premium subsidy under ARPA, which
can be found at the following link: https://www.dol.gov/agencies/ebsa/laws-and-regulations/laws/cobra/premium-subsidy.
The COBRA subsidy provisions of ARPA have three major
components:
It provides up to six months of fully subsidized COBRA
premiums, along with certain special election rights, for eligible
COBRA qualified beneficiaries;
It imposes two new notice requirements on employers; and
To embed, copy and paste the code into your website or blog:
As part of the American Rescue Plan Act of 2021 (“ARPA”), Congress enacted a temporary Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) subsidy for certain individuals for coverage periods from April 1, 2021 to September 30, 2021 (the “Subsidy Period”). On April 7, 2021 the United States Department of Labor (“DOL”) issued FAQs to assist employers and plan administrators to understand the subsidy.
The subsidy provides that the employee need not pay COBRA premiums during the Subsidy Period, but rather that the employer pays 100% of the subsidy to “Assistance Eligible Individuals” (“AEIs”) and then gets repaid through tax credits. The assistance applies to all “group health plans sponsored by private-sector employers or employee organizations (unions) subject to the COBRA rules under the Employee Retirement Income Security Act of 1974 (ERISA). They also apply to plans sponsored b
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Group health continuation coverage under the Consolidated Omnibus Reconciliation Act of 1985 (“COBRA”) permits certain group health coverage to be continued by participants and beneficiaries (“qualified beneficiaries”) when coverage is lost due to certain “qualified events,” such as termination of employment or a reduction of hours.
Under Section 9501 of the American Rescue Plan Act of 2021 (“ARPA”), an “assistance eligible individual” (“AEI”) is not required to pay the cost of COBRA coverage (“COBRA Subsidy”) for the period beginning April 1, 2021 through September 30, 2021 (“Subsidy Period”). The Employee Benefits Security Administration has issued guidance, including Frequently Asked Questions (“FAQs”) and Model Notices related to the COBRA Subsidy. Employers offering COBRA are required to provide the COBRA Subsidy to any AEI, which they then can recoup through a payroll tax credit