Health Plan Sponsors Take Note! A Review of COBRA Notice Requirements Beyond the New Special Extended Election Notice

As required by the American Rescue Plan Act of 2021 (ARPA), the Department of Labor (DOL) issued special extended COBRA election period notices on April 7, 2021. Current and former employees who qualify for the ARPA COBRA subsidy must be notified by May 31, 2021, and have 60 days to make an election. 

In the rush to make the May 31 deadline, plan administrators may not have given full attention to other ARPA COBRA-related notice requirements:

Summary of the COBRA Premium Assistance Provisions under the American Rescue Plan Act of 2021 (“Summary”)

Along with the Model General Notice and COBRA Continuation Coverage Election Notice, the Summary must be provided to (1) individuals who become eligible for expanded COBRA coverage during the period from April 1, 2021, through September 30, 2021, and (2) qualified beneficiaries with recent qualifying events who have not yet received their COBRA election notice. This general COBRA election form, updated to include ARPA subsidy information, allows Assistance Eligible Individuals to elect COBRA in the normal course and request subsidy eligibility. Both notices must be provided by normal deadlines for COBRA election notices.

The Summary must also be included with the Model COBRA Continuation Coverage Notice in Connection with Extended Election Periods that is sent to all Assistance Eligible Individuals with a qualifying event before April 1, 2021. The Continuation Coverage Notice allows Assistance Eligible Individuals who are not currently on COBRA to elect COBRA coverage during a special 60-day window, retroactive to April 1, 2021. It also allows Assistance Eligible Individuals currently enrolled in COBRA or those who enroll during the special 60-day window to request subsidy eligibility.

Notice Regarding the Expiration of the COBRA Premium Subsidy (“Expiration Notice”)

ARPA requires that the Expiration Notice be sent to Assistance Eligible Individuals whose COBRA subsidy is either terminating (1) prior to September 30, 2021, because the normal COBRA coverage period is ending, or (2) as of September 30, 2021 (the end of the ARPA COBRA subsidy period). This notification to Assistance Eligible Individuals that their subsidy is ending must be provided 15-45 days before the subsidy ends.

HBL has experience in all areas of benefits and employment law, offering a comprehensive solution to all your business benefits and HR/employment needs. We help ensure you are in compliance with the complex requirements of ERISA and the IRS code, as well as those laws that impact you and your employees. Together, we reduce your exposure to potential legal or financial penalties. Learn more by calling 678-439-6236.

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Hall Benefits Law, LLC

HBL offers employers comprehensive legal guidance on benefits in mergers and acquisitions, Employee Stock Ownership Plans (ESOPs), executive compensation, health and welfare benefits, healthcare reform, and retirement plans. We counsel a wide spectrum of clients including small, mid-sized, and large companies, 401(k) investment advisors, health insurance brokers, accountants, attorneys, and HR consultants, just to name a few. HBL is passionate about advising clients, and we are dedicated to our mission: to provide comprehensive, personalized, and practical ERISA and benefits legal solutions that exceed client expectations.
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