The American Rescue Plan Act (“ARPA”) requires the full cost of COBRA premiums to be subsidized for COBRA continuation coverage during the period from April 1, 2021 through September 30, 2021 (“Subsidy Period”) of certain assistance-eligible individuals (“AEI“) whose COBRA qualifying event was due to an involuntary termination or reduction in hours. Our prior blog post, COBRA Premium Assistance Under the American Rescue Plan Act of 2021 – What Employers Should Know, provides information about the ARPA COBRA subsidy and associated notice requirements. ARPA also required employers to comply with certain notice obligations, first at the outset of the Subsidy Period to make the AEIs aware of the subsidy, and now to inform AEIs that the subsidy is nearing expiration through what is known as the Notice of Expiration of Period of Premium Assistance (“Expiration Notice”).
The deadline for employers to furnish the Expiration Notice is fast approaching on September 15, 2021.
- Applicable employers must notify AEIs that the premium subsidy ends on September 30, 2021 and whether they qualify for continued coverage at their own expense if they have not exhausted their COBRA continuation coverage period.
- The Department of Labor (“DOL”) has developed a Model Notice to assist employers with drafting and complying with this notice requirement. An employer will meet these notice obligations by following the Model Notice published by the DOL.
- If the employer chooses not to use the Model Notice, the Expiration Notice must state in “clear and understandable language” the date of the subsidy expiration, information on continued unsubsidized coverage under COBRA (if applicable), or alternative coverage under another group health plan.
Employers should be prudent and check with their COBRA administrators, internal human resources or benefits team to prepare and send the Expiration Notice informing AEIs of the impending expiration of the subsidy before the September 15, 2021 deadline, and provide any further relevant information.
