In our March 29 e-alert concerning the new COBRA subsidy, we indicated that we would advise when the new COBRA notices from the U.S. Department of Labor (DOL) became available. The DOL published the model notices on April 7, 2021.
Background: Under the American Rescue Plan Act (“ARPA”), a temporary 100% COBRA subsidy between April 1, 2021 and September 30, 2021 is available to individuals who lose group health coverage as a result of an involuntarily termination or a reduction in hours. Generally, the employer must advance the full premium and then can obtain reimbursement from the federal government through a tax credit procedure that is taken against the Medicare portion of FICA.
Model Notices: The model notices (“Notices”) are all described below and are available at the DOL’s newly created “COBRA Premium Subsidy” page:
- Model ARP General Notice and COBRA Continuation Election Notice. This Notice is to be used by group health plans for qualified beneficiaries who have qualifying events occurring after the effective date of the law, April 1, 2021. Note that this Notice must be used for all qualified beneficiaries who become eligible for COBRA, not just those who become eligible due to an involuntary termination or reduction in hours.
- Model COBRA Continuation Coverage Notice in Connection with Extended Election Periods. This Notice may be used for eligible individuals who declined or ended COBRA coverage early (i.e., before April 1), as well as for individuals who are currently enrolled in COBRA due to an involuntary termination or reduction in hours.
- Model Alternative Notice of ARP Continuation Coverage Election Notice: This alternative Notice may be used by employers with insured coverage that is not subject to federal COBRA, but subject to state “mini-COBRA” continuation coverage requirements.
- Notice of Expiration of Period of Premium Assistance: This Notice must be issued 15-45 days before an individual’s COBRA subsidy expires.
Employers must include with Notices 1-3 above, the DOL-created “Summary of the COBRA Premium Assistance Provisions under the American Rescue Plan Act of 2021”, which is also available on the above-referenced “COBRA Premium Subsidy” page.
For questions, please contact:
Timothy S. Klimpl
(203) 252-2683; firstname.lastname@example.org
Mark F. Williams
(203) 575-2618; email@example.com