By Alicia Ward, Mark Macchi, Peter Moser September 1, 2021
As discussed in previous HRW Client Alerts on March 16, 2021 and April 12, 2021, a provision of the American Rescue Plan Act (ARPA) requires employers to pay COBRA premiums for “Assistance Eligible Individuals” (employees who lost group health coverage due to reduced hours or involuntary termination).
This subsidy became available on April 1, 2021, and is currently set to expire on September 30, 2021. However, an individual’s premium assistance will end before September 30, 2021, if: (1) the individual becomes eligible for another group health plan or Medicare; or (2) the individual reaches the end of their maximum COBRA continuation coverage.
Plan administrators must provide notice 15 – 45 days before an individual’s COBRA subsidy will end (“Expiration Notice”) (i.e., no later than September 15, 2021, for individuals who are eligible through the sunset date of September 30, 2021). However, the Expiration Notice need not be provided to those individuals whose premium assistance expires due to their eligibility for another group health plan or Medicare.
The Expiration Notice must specify that (1) premium assistance for the individual will expire soon, (2) the date of the expiration, and (3) that the individual may be eligible for coverage without any premium assistance through COBRA continuation coverage or coverage under a group health plan, Medicaid, or the Health Insurance Marketplace. The U.S. Department of Labor has published a Model Notice of Expiration of Premium Assistance that employers may use to provide notice of the expiration of ARPA premium assistance to Assistance Eligible Individuals.
For Questions/Compliance Assistance
If you have any questions about the COBRA subsidy and notice requirements, and the potential impact on your business or organization, please contact: