dol cobra subsidy

The 100% premium subsidy will be reimbursed to employers through their quarterly payroll tax returns. In response to questions from stakeholders, the Department of Labor (DOL) issued FAQs on April 7, providing much needed guidance on the COBRA premium subsidy. On April 7, 2021, the U.S. Department of Labor (DOL) issued FAQs and model notices for the COBRA premium assistance provisions of the American Rescue Plan Act (ARPA). The subsidy is available from April 1, 2021 through September 30, 2021, to assistance eligible individuals (AEIs) who are eligible for and elect COBRA coverage—or comparable state continuation coverage—because of … What is an Involuntary Termination? to proceed. The American Rescue Plan Act provides a 100 percent COBRA subsidy to eligible individuals from April 1, 2021, through September 30, 2021. Accordingly, please do not send us any information While the FAQs provide employers with some clarity on the implementation and administration of the COBRA premium subsidy, additional guidance is still needed. On April 7, 2021, the Department of Labor (DOL) issued initial guidance along with four model notices. As we noted in our previous alert, the premium subsidy is available for workers who (1) are eligible for COBRA due to an involuntary termination or a reduction of hours, and (2) actually elect COBRA coverage. All Rights Reserved. Individuals must elect COBRA continuation coverage within 60 days of receipt of the relevant notice or forfeit their right to elect COBRA continuation coverage and the subsidy. Instead of the employee paying for the coverage, an employer or plan to whom COBRA premiums are payable is entitled to a tax credit for the amount of the premium assistance. Home » DOL ISSUES GUIDANCE ON AND MODEL NOTICES FOR ARPA’S COBRA SUBSIDY DOL ISSUES GUIDANCE ON AND MODEL NOTICES FOR ARPA’S COBRA SUBSIDY. Due to the COVID-19 National Emergency, that timeframe was extended. COBRA Health Continuation Coverage; Claiming Health Benefits; Affordable Care Act; Dependent Coverage; Mental Health and Substance Use Disorder Benefits; Health Benefits Compliance Assistance; Children's Health Insurance Program Reauthorization Act (CHIPRA) Because the Act requires AEIs to be treated as having paid the full amount for COBRA premiums from April 1, 2021 to September 30, 2021, plans should not collect premium payments from AEIs during this period and subsequently require them to seek reimbursement. The FAQs also clarified that an individual is not eligible for the subsidy if they are eligible for other group health coverage. Employers will also need to revise their existing notices for individuals who become eligible for COBRA coverage during the subsidy period. Home > COBRA Subsidy > Model ARPA COBRA Notices Have Arrived!. This creates additional pressure for employers to be cognizant of those who qualify as AEIs even before notices are formally sent out. On April 7, 2021, the U.S. Department of Labor (DOL) issued FAQs and model notices for the COBRA premium assistance provisions of the American Rescue Plan Act (ARPA).The ARPA provides a 100% subsidy for employer-sponsored group health insurance continued under COBRA and similar state continuation of coverage programs for eligible individuals. If you have questions or would like help revising your forms, please contact a Graydon Benefits attorney. With respect to a reduction of hours, the DOL guidance indicates that this includes a reduction in hours due to a change in a business’s operating hours, a change from full-time to part-time status, a temporary leave of absence, and participation in a lawful labor strike. Posted in Employee Benefits, Employer Liability. 04.09.21. Yesterday, the U.S. Department of Labor released new COBRA premium subsidy model notices and FAQs explaining how that is to be done. Copyright © 2021 Graydon Head & Ritchey LLP. On April 7, 2021, the Department of Labor (DOL) issued guidance on the COBRA premium subsidy, providing key guidance for employers as well as … By clicking the ‘ACCEPT’ button, you agree that we may review any information you If an individual has already paid their April premium in full, the party to whom the payment was made must issue a credit or refund to the individual. doing so will not create a conflict of interest. For more information who qualifies as an AEI and additional requirements under ARPA, click here. The DOL is directed to provide a model notice by April 10, 2021. One of the most important questions answered by the new FAQs helped address how the subsidy interacts with the previous guidance providing extensions to elect COBRA or pay for COBRA coverage. By Joy M. Napier-Joyce on April 7, 2021. Plan sponsors will be required to inform those eligible about the subsidy and about the … > DOL guidance now available for COBRA premium subsidy. The U.S. Department of Labor (DOL) has issued model notices and Frequently Asked Questions (FAQs) regarding the COBRA subsidy (see COBRA Premium Subsidy guidance) made available under the American Rescue Plan Act of 2021 (ARPA). On April 7, 2021, the Department of Labor (DOL) published FAQs to further explain this COBRA subsidy and provided models of the required related notices. in a matter where that information could and will be used against you. By Renee Lieux on April 13, 2021. Hot off the Press – DOL Issues COBRA Subsidy Model Notices April 7, 2021 by Lyndsey Barnett This morning the DOL issued the much anticipated guidance on the COBRA subsidies provided for in the American Rescue Plan Act (“ARPA”). On April 7, 2021, the Department of Labor (the DOL) issued guidance (the Guidance) and model notices and forms for the COBRA subsidy provision of the American Rescue Plan Act (the Act). The American Rescue Plan Act (ARPA), signed by President Joe Biden on March 11, 2021, included a COBRA Subsidy covering 100% of COBRA premiums for “Assistance Eligible Individuals” during the period of April 1, 2021 through September 30, 2021. However, those previous extensions do not apply to the notices or elections related to the subsidy. Lori Jones, Mike Lane and Amy Dygert Stansfield  are members of Thompson Coburn’s Employee Benefits practice. The COBRA premium subsidy is available for Assistance Eligible Individuals (AEIs) from April 1, 2021 and ending the earlier of (1) the date that their COBRA coverage expires, or (2) September 30, 2021. Subsidy Period. The FAQs take an expansive view […] As the guidance mentions several times, the subsidy is only for coverage periods from April 1, 2021 through September 30, 2021. The following fast facts on the COBRA subsidy will help employers prepare for more detailed guidance and model notices that are soon to follow from the Department of Labor. The DOL may need to provide further guidance for employers to be able to fully administer their COBRA subsidy obligations under the ARPA. Other coverage includes eligibility for coverage through a new employer’s plan, a spouse’s plan, or Medicare. Additionally, the Act creates a new election window for certain AEIs to elect COBRA coverage and receive the premium subsidy. transmit to us. This notice must be furnished no earlier than 45 days but no later than 15 days before the subsidy expires. The subsidy covers 100% of COBRA premiums, including the 2% administrative fee, for medical, dental and vision coverage during that time. The FAQs further clarified that the subsidy election period does not cut off an individual’s pre-existing right to elect COBRA continuation coverage, including under the extended time frames provided under the Joint Notice and EBSA Notice 2021-01. However, the FAQs do provide examples of “reductions in hours” that may … The ARPA provides a 100% subsidy for employer-sponsored group health insurance continued under COBRA and similar state continuation of coverage programs for eligible individuals. Importantly, the DOL’s guidance confirmed that the deadline relief provided in the Notice of Extension of Certain Timeframes for Employee Benefit Plans, Participants, and Beneficiaries Affected by the COVID-19 Outbreak and in IRS Notice 2021-01 does not apply to notice requirements and election periods required under ARPA. However, if such an individual enrolls in COBRA continuation coverage to obtain the subsidy they will no longer be eligible for a premium tax credit, advance payments of the premium tax credit, or the health insurance tax credit for health coverage during that period that may have been available through the Marketplace or Medicaid. For more on those notices, check out our other post. ARPA requires employers to notify AEIs who have the opportunity to elect free coverage during the subsidy period and those whose subsidy will expire (no more than 45 days but no less than 15 days before the subsidy termination date). Among them is a new COBRA premium subsidy that pays for 100 percent of the applicable COBRA premium for eligible individuals with respect to coverage periods beginning April 1, 2021 … it in a good faith effort to retain us, and, further, even if you consider it confidential, Model ARPA COBRA Notices Have Arrived! Coordination with deadline relief during COVID outbreak period. about any matter that may involve you until you receive a written statement from On April 7, 2021, the DOL issued FAQs, model notices, and model forms for the implementation of the COBRA subsidy requirements set forth in ARPA. the ‘ACCEPT’ button if you understand and accept the foregoing statement and wish Immediate Action Required As discussed in our prior posts, the American Rescue Plan Act of 2021 (“ARP”) requires that plan administrators distribute new COBRA notices advising individuals of their possible rights to a COBRA premium subsidy. On April 7, 2021, the DOL issued guidance on the COBRA premium subsidy, providing key guidance for employers as well as model language for the … However, those who receive individual health insurance coverage or Medicaid and who are otherwise eligible for the premium subsidy can still elect to receive it. By Christine C. Hawkins and Dipa N. Sudra. As discussed in our previous post, Congress recently passed a 100% subsidy for certain individuals who enroll in COBRA continuation coverage. Individuals may not receive refunds for any premiums paid for periods prior April. DOL Issues Model COBRA Subsidy Notices and FAQs. On April 7, 2021, the Department of Labor (DOL) released a new webpage dedicated to the COBRA subsidies available through the American Rescue Plan Act (ARPA).. ARPA provides a 100 percent subsidy for COBRA coverage for individuals whose coverage was terminated due to a reduction in hours or an involuntary termination of employment. In general, individuals have 60 days after the date that they initially receive their COBRA election notice to elect COBRA continuation coverage. Next Steps for Employers. The guidance also includes two forms and a set of FAQs. You recognize that our review of your information, even if you submitted On April 7, 2021, the U.S. Department of Labor (DOL) released various documents pertaining to the COBRA premium assistance provisions contained in the American Rescue Plan Act (ARPA), including Frequently Asked Questions (FAQs) and Model Notices and election forms, as well as the launch of a page dedicated to COBRA Premium Subsidy guidance on its website. Although we would like to hear from you, we cannot represent you until we know that On April 7, 2021, the Department of Labor (DOL) issued guidance on the COBRA premium subsidy, providing key guidance for employers as well as model language for the notices required under ARPA. The American Rescue Plan Act of 2021 (ARPA) includes a 100% COBRA subsidy for assistance eligible individuals beginning on April 1, 2021. The ARP provides a 100 percent premium subsidy – between April 1, 2021 and Sept. 30, 2021 – for individuals whose reduction in hours or involuntary termination of employment … Defining reduction of hours and involuntary termination. COBRA allows employees and their families who would otherwise lose their group health coverage due to certain life events to continue their group health coverage, known as COBRA continuation coverage. Individuals that have coverage through the Marketplace or Medicaid may be eligible for the subsidy. Individuals who meet the criteria above but are eligible for other group health coverage, such as through a new employer’s plan, a spouse’s plan (with the exception of excepted benefits, a qualified small employer health reimbursement arrangement, or a health flexible spending arrangement), or Medicare, are not eligible for the premium subsidy. The DOL states that individuals may be eligible for a special enrollment period to enroll in coverage through the Marketplace after the COBRA subsidy ends. DOL will provide model notices within 45 … The U.S. Department of Labor (DOL) posted on its website guidance and model notices to help employers comply with the federal COBRA premium subsidy put … On April 7, 2021, the U.S. Department of Labor (DOL) issued eagerly anticipated guidance on administering COBRA subsidies under the American Rescue Plan Act of 2021 (ARPA). does not preclude us from representing another client directly adverse to you, even Also, special COBRA election notices explaining ARP rights to individuals who terminated before April 1, 2021 must be provided by May 31, 2021. The DOL has issued model notices and FAQs on the 100% COBRA premium subsidy available under the American Rescue Plan Act of 2021 (ARPA) (see our Checkpoint article). While the guidance indicates that use of the models is optional, it also provides that appropriate use of the models is considered to be good faith compliance with the … The subsidy pays 100% of premiums, including the 2% administrative charge, for periods of health coverage on or after April 1, 2021 through September 30, 2021. The DOL guidance does not define an involuntary termination of employment other than to state that it does not include a voluntary termination of employment. COBRA premium subsidy is available to all group health plans subject to COBRA. Further, individuals who forego individual coverage for the COBRA premium subsidy will no longer be eligible for a premium tax credit, advance payments of the premium tax credit, or the health insurance tax credit for that period. The subsidy pays 100% of premiums, including the 2% administrative charge, for periods of health coverage on or after April 1, 2021 through September 30, 2021. The ARPA provides a 100% subsidy for COBRA continuation coverage premiums from April 1, 2021 … On April 7, 2021 the Department of Labor (DOL) issued further guidance on the COBRA premium subsidies required under the American Rescue Plan Act (ARPA).The additional guidance includes FAQs and Model Notices on a dedicated DOL website page.Important clarifications regarding the COBRA premium subsidy are outlined below. us that we represent you (an ‘engagement letter’). Employers should send out notice to all individuals who are eligible for the ARPA COBRA subsidy using the DOL notice form. In addition to the above guidance, the DOL also issued guidance on the required notices and provided model notices for use by employers. Notable Points from the FAQs Eligibility Based on Reduction in Hours. Also, we cannot treat unsolicited The COBRA subsidy is complicated. On April 7, 2021, the U.S. Department of Labor issued FAQs and five model notices for the COBRA premium subsidy provided by the American Rescue Plan Act (ARPA), which we discussed in our March 16, 2021 E-lert.. A New COBRA Subsidy Until September 30, 2021 for Involuntary Terminations. Click here to subscribe to News & Insights from Thompson Coburn LLP related to our practices as well as the latest on COVID-19 issues. For families of AEIs in which some members previously elected COBRA coverage and some did not, ARPA grants a new election window to those who did not previously elect coverage. The subsidy period began April 1, 2021 and ends September 30, 2021. The Department of Labor (DOL) will be issuing COBRA election notices within 30 days of ARPA enactment and premium subsidy expiration notices within 45 days of ARPA enactment. As a reminder, the subsidy provides that assistance eligible individuals are not required to pay their COBRA continuation coverage premiums for up to a 6-month period. However, even with any extended time frames, the premium assistance is only available for periods from April 1, 2021 through September 30, 2021. The DOL’s FAQs make clear that the subsidy period does not expand an individual’s COBRA coverage period. Today, the DOL issued FAQs to answer several of the questions raised by the new subsidy. Notably, the FAQs do not explain what constitutes an “involuntary termination” to qualify for the subsidy. In accordance with ARPA, the DOL has provided the following model notices: ARPA’s COBRA premium subsidy is applicable to all group health plans sponsored by private-sector employers and employee organizations subject to ERISA; state and local governments subject to the Public Health Service Act; and group health insurance required under state mini-COBRA laws. NOTICE. The model notices and FAQ guidance are published on a dedicated COBRA Premium Subsidy page at https://www.dol.gov/COBRA-subsidy. Although the Guidance, a series of frequently asked questions, is directed to COBRA qualified beneficiaries, it provides useful information to employers and service providers tasked with … ARPA requires employers to send notices to those who are or become eligible for premium assistance during the subsidy period and to those whose coverage under COBRA is expiring during the premium subsidy period  (as detailed in our previous alert). Importantly, anyone who elects COBRA coverage and uses the premium subsidy will not be eligible to continue his/her individual coverage while receiving subsidized coverage under COBRA. As a reminder, the subsidy provides that assistance eligible individuals are not required to pay their COBRA continuation coverage premiums for up to a 6-month period. Please click In addition, the Marketplace provides a special enrollment period when an individual exhausts their maximum COBRA coverage. Last month we shared an alert detailing the COBRA premium subsidy included in the American Rescue Plan Act of 2021 (ARPA). Individuals who receive the premium subsidy are required to notify their plans if they become eligible for coverage under another group health plan or Medicare, as failure to do so can result in a tax penalty. information as confidential. The subsidy is first available April 1, 2021 and ends, unless terminated earlier as described below, on September 30, 2021 (the “subsidy period,” as used herein). In the FAQs, the DOL stated that that an individual has the choice of electing COBRA continuation coverage beginning April 1, 2021 or after (or beginning prospectively from the date of a qualifying event if the qualifying event is after April 1, 2021), OR electing COBRA continuation coverage starting from an earlier qualifying event if the individual is eligible to make that election, including under the extended time frames provided under the Joint Notice and EBSA Notice 2021-01. Under ARPA, subsidized COBRA coverage will only be available for the period beginning April 1, 2021 and ending September 30, 2021, but the COBRA premium subsidy may be terminated earlier if the assistance eligible individual reaches the end of the COBRA maximum coverage period. In order to qualify under the reduction of hours option, the individual must be an employee at the time his or her hours are reduced. 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