On April 7, 2021, the U.S. Department of Labor (DOL) issued FAQs and model notices for the COBRA premium assistance provisions of the ARPA. The ARPA provides a 100% subsidy for employer-sponsored group health insurance continued under COBRA and similar state continuation of coverage programs. The subsidy applies from April 1 through September 30, 2021. The notices and FAQs appear on a new DOL web page dedicated to the ARPA COBRA subsidy.
Model Notices
The new model notices released by the DOL are the following:
- Model General Notice and COBRA Continuation Coverage Election Notice: MS Word | PDF
- Model Notice in Connection with Extended Election Period: MS Word | PDF
- Model Alternative Notice: MS Word | PDF
- Model Notice of Expiration of Premium Assistance: MS Word | PDF
- Summary of COBRA Premium Assistance Provisions under the American Rescue Plan Act of 2021 (to be provided with the General Notice): MS Word | PDF
DOL Guidance
The DOL guidance contains 21 FAQs on topics such as eligibility, application procedure, notice requirements and duration of the subsidy. Notably, the FAQs state that prior federal COVID-19-related relief for plan deadlines does not apply to notices or election periods set forth in the ARPA provisions about the COBRA subsidy. However, an individual may elect COBRA from an earlier qualifying event if the individual is eligible to make that election, including under the extended time frames provided under the prior deadline relief.
Next Steps for Employers
Employers have various timeframes to provide applicable notices to individuals who may be impacted by the COBRA subsidy and as such are encouraged to review the DOL’s guidance for additional information and applicable notice timeframes. Employers will need to review their records and begin to compile a list of COBRA qualified individuals and beneficiaries who had a qualifying event in 2020 to ensure that eligible individuals receive a notice regarding the subsidy and their ability to elect COBRA. Employers should also consider whether they will permit individuals to enroll in a different plan option and provide applicable notice.
Employers who internally administer COBRA will need to develop the appropriate notices required by the Act and be prepared to administer the subsidy. Employers who use the services of a third-party administrator (TPA) for COBRA administration will need to work with their TPA to ensure compliance. For employers who utilize HR Works’ COBRA administration services, we will be reaching out to clients and partners to confirm that the proper steps are being taken to ensure compliance.
For more information related to this legislative update, watch our webinar American Rescue Plan Act 2021: Requirements and Considerations for COBRA and FFCRA.
Employers should take care to ensure that they reported accurate information to their TPA regarding terminated employees and beneficiaries, as TPAs who do not have accurate records will not be able to send notices to all impacted employees. Further, the use of and reliance on a TPA will not negate an employer’s responsibility for compliance.
