American Rescue Plan Act of 2021 COBRA Subsidy Expiration Notice Is Due

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Morgan Lewis - ML Benefits

The American Rescue Plan Act of 2021 (ARPA) provides for a 100% COBRA premium subsidy for up to six months, from April 1, 2021 through September 30, 2021, for Assistance Eligible Individuals (AEIs) as defined under the guidance. Our prior blog posts, DOL Issues ARPA COBRA Subsidy Model Notices and FAQs and IRS Provides Second Round of FAQs on COBRA Subsidies, provide more information about the ARPA COBRA subsidy and the associated notice requirements.

Among the notices that must be issued to AEIs under ARPA is the Notice of Expiration of Period of Premium Assistance. This notice must be provided to AEIs receiving the premium subsidy within 15–45 days of the subsidy's expiration and must

  • explain that the premium subsidy will soon expire;
  • provide the date of the subsidy's expiration; and
  • advise that the individual may continue COBRA coverage without premium assistance (if applicable) and may be eligible for other coverage through another group health plan, the Health Insurance Marketplace, or Medicaid.

The deadline to send the premium subsidy expiration notice will depend on when the premium subsidy is due to expire. For AEIs expected to receive the subsidy until September 30, 2021, plans may begin issuing the premium subsidy expiration notice as soon as August 16, 2021, and have until September 15, 2021 to meet the deadline under ARPA. If the premium subsidy is due to expire for an AEI on an earlier date, the notice timeframe will be different. For example, if the premium subsidy will expire for an AEI on September 20, 2021, the premium expiration notice must be sent between August 6, 2021 and September 5, 2021. The US Department of Labor (DOL) has developed a model notice to assist plans with meeting this notice requirement. While plans are not required to use the model notice, the DOL will consider proper use of the model notice as good-faith compliance with the premium subsidy expiration notice requirement.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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