Thanks to a variety of reasons, including the widely available vaccine supply and the ARPA, which has brought much-needed financial relief to everyone impacted by the COVID-19 pandemic, America is recovering.
One important part of this stimulus bill is a 100% federal-financed COBRA insurance premium subsidy, positively impacting those who lost health coverage due to an involuntary termination of employment or a reduction in hours.
While this subsidy extends health coverage for affected individuals, it has unexpectedly created an administrative burden for employers. This is where having an experienced business partner like ADP by your side makes it easier to implement regulatory changes without impacting day-to-day operations.
Sizing up the administrative burden
Putting initiatives like this into action is no small feat. The ARPA required employers to perform extensive lookbacks and update COBRA Enrollment Kits/Information (Specific Rights Notices) with a short runway for compliance.
· Under the ARPA, employers were required to perform a lookback for potential Assistance Eligible Individuals (AEIs) with COBRA Start Dates between Nov. 1, 2019 and Mar. 31, 2021.
· Specific Rights Notices for those with Start Dates of Apr. 1, 2021 or later were required to include the ARPA General Notice and Attestation Form, regardless of COBRA Qualifying Event.
· While the ARPA was signed into law on Mar. 11, 2021, it wasn’t until Apr. 7 that the Department of Labor published its guidance or model notices, not to mention providing Employers and Plan Sponsors a compliance deadline of May 31.
What we’ve been up to
We recognized the impact this would have on our clients and quickly got to work performing system/letter updates and coordinating with print and mail vendors. ADP not only met (and exceeded) the government’s compliance deadline, but we’ve also gone above and beyond to make things easier for you.
· We sent an email on Apr. 2 announcing the new COBRA insurance premium and our plan for supporting you — and published an article in last month’s newsletter with this information[HB(1] .
· COBRA Qualifying Events that occurred on or after May 12, COBRA Qualified Beneficiaries (QBs) received the ARPA General Notice and Attestation Form in their COBRA Enrollment Kit.
· Active QBs whose COBRA Event occurred after Apr. 1 and prior to May 12 received a secondary “catch-up” mailing on May 17.
· Potential AEIs part of the lookback period had a mailing date no later than May 21.
What’s next?
We’re doing all the heavy lifting, allowing you to focus on running your business.
· We are reviewing and applying the federal subsidy to qualifying QBs returning their Attestation Forms.
· We are covering the premium payment and COBRA administration costs. You won’t be billed for their coverage. Additional debits will not appear on your benefits invoice and tax credits won’t be available for this population.
· QBs that qualified for subsidy but have previously sent premium payment for months now covered by the subsidy will automatically get a refund of the premium within 4 – 6 weeks of the subsidy application, via paper check. All refunds are going back to the primary QB directly.
As we continue to guide you and qualified individuals through the process, please reach out to your HR Business Partner with any questions.