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The Department of Labor has now released model notices as well as additional guidance regarding the COBRA premium subsidies provided under the American Rescue Plan Act. You can review our recent blog for background on the original Act.
The model notices and election forms can be found on the Department of Labor website, and are summarized below. These notices can be used to help employers satisfy the new notice requirements under ARPA.
This notice is to be provided to individuals who become eligible for COBRA as a result of a qualifying event between April 1, 2021 and September 30, 2021. This would replace an employer’s current COBRA notice, as it includes the language regarding the availability of the premium subsidy to those who qualify. The DOL has also included an alternative notice for small employers subject to state mini-COBRA laws.
This notice is to be provided by May 31, 2021 to anyone that qualifies as an Assistance Eligible Individual (defined as those losing coverage as a result of an involuntary termination or reduction in hours), who had a qualifying event before April 1, 2021, and are still within their 18-month COBRA window. Essentially, this notice would be sent to anyone who lost coverage between October 1, 2019 and March 31, 2021, regardless if the individual elected COBRA at the time of the qualifying event. It notifies those individuals that they have a special 60-day window to elect COBRA that would cover the period between April 1, 2021 and September 30, 2021.
This summary should also be included with both notices provided to eligible individuals as indicated above. It includes the form that individuals will complete in order to request the premium subsidy.
This notice should be provided to Assistance Eligible Individuals 15-45 days before their premium subsidy is set to expire during the period from April 1, 2021 to September 30, 2021.
While the FAQs that are provided on the DOL’s website are largely focused on the individual, there are some takeaways that provide more clarity to employers, including:
While employers are not required to use the model notices provided by the Department of Labor, they are required to update existing COBRA election notices to comply with the requirements of this Act. Employers should also continue to identify their Assistance Eligible Individuals and provide them with the required notices, and work with any third-party COBRA administrator to ensure that the appropriate notices are sent by the required deadlines.
We expect there may be additional FAQs added, along with further information from the IRS on how to claim the credit for the premium subsidy. We will continue to post updates as they are announced.