The U.S. Department of Labor (DOL) has published new forms and guidance to address the new COBRA subsidy provided under the American Rescue Plan Act (ARPA).
COBRA continuation coverage provides participants and beneficiaries covered by a group health plan with health insurance continuation coverage following certain qualifying events. If an individual elects COBRA coverage, generally they are responsible for the full cost of the health insurance premium. In general, under COBRA, an individual who was covered by a group health plan on the day before the occurrence of a qualifying event may be able to elect COBRA continuation coverage.
The ARPA provides a 100% COBRA subsidy for qualified employees and dependents who lose coverage as a result of an involuntary termination or a reduction in hours (assistance eligible individuals or AEIs). The ARPA also provides a special second election opportunity for AEIs who are still within their COBRA maximum period but who had not previously elected COBRA, as well as AEIs who previously elected COBRA but are no longer enrolled (for example, an individual who terminated coverage because they were unable to continue paying the premium).
This subsidy is available for periods of coverage from April 1, 2021 through September 30, 2021. This premium assistance is generally available for continuation coverage under the federal COBRA provisions, as well as for group health insurance coverage under comparable state continuation coverage ("mini-COBRA") laws.
New notices are required to advise AEIs of the availability of COBRA premium assistance for health coverage and to enroll in coverage from April 1, 2021 through September 30, 2021.
The DOL has published answers to many frequently asked questions on the subsidy program, which can be found here.
The DOL has also published the following model notices to address the COBRA subsidy:
A general notice that must be provided to all qualified beneficiaries who either have a reduction in hours or an involuntary termination of employment from April 1, 2021 through September 30, 2021. This notice may be provided separately or with the COBRA election notice following a COBRA qualifying event.
This is a model notice of the extended COBRA election period to any AEI (or any individual who would be an AEI if a COBRA continuation coverage election were in effect) who had a qualifying event before April 1, 2021. This notice requirement doesn't include those individuals whose maximum COBRA continuation coverage period, if COBRA had been elected or not discontinued, would have ended before April 1, 2021 (generally, those with applicable qualifying events before October 1, 2019). This notice must be provided by May 31, 2021.
This notice can be used for coverage subject to state continuation requirements between April 1, 2021 and September 30, 2021.
Plans and issuers are required to provide individuals with a notice of expiration of periods of premium assistance. The notice must explain the date of the individual's premium assistance expire and that the individual may be eligible for coverage without any premium assistance through COBRA continuation coverage or coverage under a group health plan. This notice must be provided 15 - 45 days before the individual's premium assistance expires.
If your company offers coverage through the ADP TotalSource Health and Welfare Plan, ADP TotalSource will automatically update COBRA notices.