Yesterday, April 7, the Department of Labor (DOL) issued guidance and model notices pertaining to the American Rescue Plan Act’s (ARPA) Continuation of Health Coverage provision.
As we previously alerted, effective April 1, the ARPA includes an opportunity for 100% coverage of COBRA premium costs from April 1st through September 30, 2021 for employees (and their family members) who experience a loss of group health coverage due to reduced hours of employment or involuntary termination of employment (aside from gross misconduct). The premium subsidy will be reimbursed to employers in their quarterly payroll tax returns.
In conjunction with this COBRA Subsidy, plan administrators are required to begin notifying eligible individuals by May 31, 2021. Eligible individuals then have 60 days to elect coverage. Individuals that had a qualifying event since November 1, 2019 are potentially eligible to receive notices, including those that are currently covered under COBRA, individuals that never elected coverage and those that elected and dropped coverage.
For FAQs regarding the COBRA subsidy, click here. For general COBRA FAQs, click here. It is important that employers read through the FAQs carefully, as a penalty of $100 per qualified beneficiary (not to exceed more than $200 per family) may be assessed on employers for each day they are in violation of the COBRA rules.
Below are links to the model notices available through the DOL:
- 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: MS Word | PDF
Please do not hesitate to reach out if you have any questions.