On April 7, 2021, the Department of Labor (“DOL) released a series of Frequently Asked Questions with clarifying information about the American Rescue Plan Act of 2021’s (“ARPA”) extended subsidy period for COBRA premium assistance. (Our alert on the ARPA’s COBRA subsidy and other substantive provisions of the ARPA that impact employers can be found here.)
The ARPA provides for a 100% COBRA premium subsidy for up to six months (during the subsidy period of April 1, 2021 until September 30, 2021) for eligible employees who lost insurance coverage due to an involuntary reduction in hours or involuntary termination. The ARPA also requires employers to notify impacted employees – those who lost their group health coverage due to a qualifying event on or after November 1, 2019, and who elected COBRA, did not elect COBRA, or let it lapse – that they may be eligible for the COBRA premium subsidy. Employees who receive the notice will then have 60 days after receipt of the notice to elect COBRA coverage.
The ARPA required the DOL to issue model notices that employers could use to satisfy their COBRA subsidy notice obligations under the ARPA. In accordance with this instruction, the DOL has released the following form notices:
- General Notice and Continuation Coverage Election Notice – available here.
- Alternative Notice – available here.
- Notice in Connection with Extended Election Period – available here.
- Notice of Expiration of Premium Assistance – available here.
- Summary of the COBRA Premium Assistance Provisions – available here.
Employers must tailor the notices with details about their qualifying group health plan and distribute the completed notice to impacted employees by May 31, 2021.
