With the passage of the American Rescue Plan Act of 2021 (“ARPA”), employers have been tasked with providing “assistance eligible individuals (“AEI”)” COBRA notices about (1) extended election periods and (2) premium assistance (see section 9501 of the American Rescue Plan Act of 2021 – ARP Act, PL 117-2). The notices must be sent to AEIs by May 31, 2021.
An AEI is an individual that became eligible for COBRA continuation coverage during the ARPA subsidy period (April 1, 2021, to September 30, 2021) because of an involuntary termination or reduction in hours.
To assist employers in complying with their notice obligations, the ARPA tasked the federal Department of Labor (“DOL”) with creating and issuing model COBRA notices. Links to each of the model notices issued by the DOL can be accessed by clicking here, and then scrolling down to the “Model Notice” tab. For your convenience, these are the links to each individual model notice in both Word and PDF formats:
The first page or two of each model notice contains instructions and a description of the purpose of that particular notice, as well as information about to whom the notice applies.
Employers should work with their benefits insurance plan administrators to be certain that the appropriate notices go out to eligible AEI’s by no later than May 31, 2021.
For additional clarification and guidance on the COBRA subsidy, employers also can review the general DOL ARPA FAQs, which can be accessed here, or more relevant to employers, the FAQs on COBRA for employers and advisors, which can be accessed here. The DOL website also contains links to other “Related Information” which can be accessed here. Finally, on May 18, 2021, the IRS issued guidance related to the ARPA COBRA subsidy which can be found here.
Going forward, the DOL and the IRS may issue further guidance and materials on the ARPA COBRA subsidy topic, so employers are reminded to regularly refer back to the DOL and IRS website for new information as it comes out.
Given the rapidly-approaching notice deadline, employers who have not already done so should immediately review the current guidance on the DOL and IRS websites (see above) and the model notices, and then consult directly with their insurance plan administrators for further information about the next steps for sending out the required notices to AEIs on or before May 31, 2021.
For further information regarding COVID-19 issues, or other employment law questions, contact the attorneys at LightGabler.