The COBRA subsidy from COVID-19 stimulus bill – The American Rescue Plan Act of 2021 (ARPA) – is nearing an end and in many cases requires employers to provide notices by September 15. The COBRA subsidy covered 100% of COBRA premiums for assistance-eligible individuals for periods of coverage beginning on or after April 1, 2021 through September 30, 2021. We previously covered the details of the subsidy in these posts: These Boots Are Made For Walking…But If You Quit, You Might Not Get the COBRA Subsidy and Lean on Me…New Guidance on Federal COBRA Subsidy. Because eligible individuals have 60 days to elect COBRA, there are still a couple months of coverage periods for which individuals may still be able to elect the subsidy.
All COBRA subsidies will end with the last period of coverage beginning on or before September 30, 2021, if not earlier. Therefore, if an employer provides coverage on the calendar month, September will be the last subsidy period. If coverage is provided for a period beginning mid-month, then it is possible that the subsidy period could run into October (for a monthly coverage period). The subsidy period could also end earlier if the employee becomes eligible for other group health coverage or the COBRA period expires.
Employers must notify individuals about the end of their subsidy period within 15-45 days before their premium assistance expires. This means that the notification deadline is September 15, 2021 for subsidy periods ending September 30, 2021. The DOL has provided a model notice that employers can use for this purpose, which can be found here: https://www.dol.gov/agencies/ebsa/laws-and-regulations/laws/cobra/premium-subsidy-for-employers-and-advisers. Employers should confirm their COBRA administrators have sent their final notices or will in the next few days.
The end of the subsidy period doesn’t necessarily mean the end of the COBRA period if it would otherwise continue. COBRA coverage automatically continues for periods beginning after September 30, 2021, under regular plan payment provisions that would require payment from the covered individual (through the regular COBRA period).