L. No. The FAQs address many of the issues raised by plan sponsors since the subsidy was enacted earlier this year. What is the COBRA subsidy? As a follow up to our March 10th blog post, we have prepared a comprehensive summary of the COBRA premium subsidy provisions contained in the American Rescue Plan Act of 2021 (“ARPA”). The COBRA statute does not define “gross misconduct.” However, courts generally look at whether the employee intentionally engaged in reckless or deliberate conduct with the knowledge that the employer, a coworker, or clients/customers would suffer harm. As we previously explained in our prior blogs, both here and here, on the new COBRA subsidy rules, the American Rescue Plan Act of 2021 (“ARPA”), includes a 100% COBRA premium subsidy for periods of coverage occurring between April 1 and September 30, 2021. Check out this video with our Director of Client Services, Jeff Ryckbost, as he answers the most frequently asked questions around the ARPA COBRA Subsidy The subsidy is available to qualified beneficiaries who are eligible for COBRA coverage due to a covered employee’s reduction in hours of employment or involuntary termination of employment. The ARPA premium subsidy could end earlier if: COBRA administrators must determine the ramifications of ARPA on several categories of COBRA-eligible individuals. Under this new law, the federal government is covering 100% of the cost of qualifying COBRA coverage from April 1st, 2021 through September 30, 2021. We recently reviewed the American Rescue Plan Act (ARPA) and how it impacts workforce management and the implementation of COVID-19 workplace policies and procedures. In addition to other provisions impacting employee benefit plans, the ARPA includes a 100% COBRA premium subsidy for up to 6 months for certain individuals and their families who lost coverage due to an involuntary termination or reduction of hours. The US Department of Labor (DOL) has previously issued model notices and a set of FAQs regarding the COBRA premium subsidy. Q. Notice 2021-31 provides helpful guidance to employers and others regarding the ARPA premium subsidy and companion tax credit for entities to whom COBRA premiums are typically paid. ARPA also adds one new COBRA notice – a notice advising an individual who is receiving a COBRA subsidy about the expiration of the subsidy if the subsidy terminates before September 30, 2021. Under ARPA, the employer, insurer or multiemployer plan sponsor must pay eligible employees’ COBRA premiums, but may offset the cost by claiming a new federal tax credit. ARPA contains a provision to subsidize 100% of COBRA premiums (including any applicable administrative fees) for qualifying individuals and coverage from April 1, 2021 - September 30, 2021. DATE: Thurs, April 15, 2021 TIME: Pacific 11:00 am to 12:30 pm Request the recording of the webinar here if you are unable to attend the live session. These provisions apply to employees and former employees who lost group … Former employees are eligible for the ARPA subsidy only when COBRA coverage is in effect when both the qualifying event (i.e., involuntary termination of employment) and the effective date of the COBRA coverage occurs between November 1, 2019 and September 30, 2021. There are 21 FAQs in the DOL’s guidance released on April 7, 2021 providing clarification on the COBRA subsidy added by the American Recue Plan Act of 2021 (ARPA). The House had originally passed ARPA in February but that version of the bill only contained an 85% COBRA subsidy. Notice 2021-31, recently issued by the IRS, explains how employers should administer the temporary COBRA subsidy created by the American Rescue Plan Act (ARPA) (Pub. Provided to you by … Limited Guidance Addresses Some Issues and Includes Model COBRA Subsidy Notices. On April 15, 2021 By Michelle Turner, MBA, CEBS In ARPA, COBRA. Although the subsidy period ends on Sept. 30, 2021, AEIs may elect to continue COBRA coverage by paying the premiums themselves up until the end of their … The American Rescue Plan Act (ARPA) provides a 100 percent COBRA subsidy to eligible individuals from April 1, 2021, through September 30, 2021 (Assistance Period). The American Rescue Plan Act, 2021 (ARPA), the third COVID-19 stimulus bill, provides COBRA premium assistance for eligible impacted workers. This notice must be sent within a 30-day time period that begins 45 days before, and ends 15 days before, the date on which the COBRA subsidy will expire. ARPA subsidies cover the full cost of COBRA or mini-COBRA premiums from April 1, 2021, through Sept. 30, 2021, for employees (and their qualifying family members), if the employee lost or loses group health insurance due to an involuntary job loss or reduction in work hours. ARPA offers free COBRA continuation of coverage to AEIs, including the 2% administrative fee, for up to 6 months between April 1 st, 2021 and September 30 th, 2021. In our most recent summary of IRS Notice 2021-31, we noted the Internal Revenue Service provided much-needed clarity to looming … Four our clients that have COBRA services through our TPA and for clients that the insurance carrier is required to manager COBRA, notices will be sent out by those providers as required by this legislation. The ARPA, among other things, makes significant changes to COBRA administration by providing for additional COBRA enrollment rights and a temporary 100% COBRA premium subsidy from April 1, 2021 to September 30, 2021. ELIGIBLE INDIVIDUALS. 1. COBRA subsidy under the American Rescue Plan Act of 2021 Friday, April 2, 2021 The American Rescue Plan Act of 2021 (ARPA) provides for a 100% COBRA premium subsidy to assistance eligible individuals for the period of April 1, 2021 through September 30, 2021 (the “Subsidy Period”). There are individuals who 1) will incur a qualifying event on or after April 1, 2021, 2) are enrolled in COBRA and paying premiums, and 3) incurred a qualifying event as far back as the end of 2019 and either did not enroll or stopped making payments. Their coverage begins on enrollment (April 1 or later) and the ARPA Subsidy pays the premiums for it until either September 30, 2021, or coverage ends, whichever comes first. General COBRA FAQs for Workers. State Mini-COBRA ARPA Subsidy Obligations. ARPA COBRA Subsidy Frequently Asked Compliance Questions April 2, 2021 Disclaimer We share this information with our clients and friends for general informational purposes only. On March 11, 2021, President Biden signed into law the American Rescue Plan Act (ARPA). (Yes. The subsidy will be provided by the federal government via payroll tax credits for employers. BACKGROUND: THE ARPA’S COBRA SUBSIDY. By itself, the ARPA is just an outline of the COBRA subsidy, and certain federal agencies need to provide the details to enable its actual administration. By . American Rescue Plan Act of 2021 (ARPA) On March 11, 2021, President Joe Biden signed into law the American Rescue Plan Act of 2021 (ARPA). There are 21 FAQs in the DOL’s guidance released on April 7, 2021 providing clarification on the COBRA subsidy added by the American Recue Plan Act of 2021 (ARPA). (Q&A-45) This is consistent with the general COBRA rule that requires these employers to continue to offer COBRA for those employees … If an employer was subject to federal COBRA in 2020, but is not subject to federal COBRA in 2021 (because it employed fewer than 20 employees on average in 2020), it must still offer COBRA and the subsidy to individuals with qualifying events in 2020. This subsidy applies to both Federal and State COBRA programs, however there are differences in the extended … Q. ARPA defines “assistance eligible individual” as, with respect to a period of coverage between April 1 to September 30, 2021, a qualified individual who is eligible for COBRA continuation coverage by reason of a qualifying event and properly elects such coverage. Under the ARPA, employers need to: 1) Identify eligible individuals; 2) Provide notice to them by May 31, 2021; 3) … Therefore, Susan would be entitled to the ARPA subsidy in the amount of $600 per month (and must pay $200 per month for COBRA coverage for her domestic partner). The employer could claim the payroll tax credit for only $600 per month for the coverage for assistance eligible individuals. This subsidy applies to both Federal and State COBRA programs, however there are differences in the extended … The American Rescue Plan Act, 2021 (ARPA), the third COVID-19 stimulus bill, provides COBRA premium assistance for eligible impacted workers. Individuals eligible for the ARPA COBRA subsidy under the extended election period (i.e., those who previously declined or dropped COBRA, but are still within the 18-month maximum coverage period) may waive COBRA continuation coverage for any period before electing to receive COBRA subsidies, including retroactive periods of coverage beginning prior to April 1, 2021. 1. Due to a variety of remaining questions surrounding the COBRA subsidies provided under the American Rescue Plan Act of 2021 (ARPA), the Hays Research and Compliance Department has put together the following compilation of frequently asked questions (FAQ). Question 1. 3. 1 The COBRA subsidy is available for coverage periods beginning April 1, 2021 and ending September 30, 2021. California's state continuation program is called Cal-COBRA. If the employee makes a retroactive election, premiums will be … The American Rescue Plan Act of 2021 (“ARPA”) includes a 100% COBRA premium subsidy for “assistance eligible individuals,” for periods of … A11: For any beneficiary whose 18-month COBRA coverage entitlement period ends September 30, 2021 or later, the end date for the subsidy, as of now, is September 30, 2021. ARPA requires plans to identify persons who lost their coverage due to reduced work hours or involuntary separation, provided their maximum COBRA period would have run past April 1, 2021. The ARPA does not address whether employers must send expiration notices to individuals who are eligible for subsidized COBRA coverage but otherwise have not elected coverage prior to September 15, 2021—the date the COBRA premium subsidy expiration notice would be due. Jennifer Berman - CEO, MZQ Consulting Late in the afternoon of May 18, 2021, the IRS released its long-awaited guidance on the COBRA subsidy created by the American Rescue Plan Act of 2021 (ARPA). An employer or plan to whom COBRA premiums are payable is entitled to a taxit cred for the amount of the prmiume assistance. ARPA – Cobra Subsidy. But what about employers? Under ARPA, COBRA participants must meet the below criteria in order to be an AEI: Coverage was lost due to involuntary termination of employment or reduction in hours. A participant or qualified beneficiary is entitled to receive a subsidy for their full monthly cost of COBRA from April 1, 2021 through September 30, 2021. The ARPA COBRA subsidy allows for certain Assistance Eligible Individuals (AEI) to receive a subsidy for COBRA coverage between April 1, 2021 and September 30, 2021. Home > COBRA Subsidy > IRS Provides Clarity on ARPA COBRA Subsidy Impact on State “Mini-COBRA” Plans. The ARPA, signed into law on March 11, 2021, includes a temporary subsidy of 100% of COBRA premiums for those who are eligible for COBRA due to an involuntary termination of employment or a reduction in hours (referred to as “assistance eligible individuals”). Under ARPA, a 100% COBRA premium subsidy and additional COBRA enrollment rights are available to certain assistance eligible individuals (AEIs) during the period beginning on April 1, 2021, and ending on September 30, 2021 (see our Checkpoint article). The ARPA also includes an extended COBRA election period that permits otherwise assistance eligible individuals who previously declined COBRA coverage or let their coverage lapse to elect COBRA coverage beginning April 1, 2021 and receive the subsidy during the Subsidy Period. May 24, 2021. The American Rescue Plan Act of 2021 (ARPA) includes a 100% COBRA subsidy for assistance eligible individuals beginning on April 1, 2021. The guidance, IRS Notice 2021-31, is predominantly in question-and-answer format. The American Rescue Plan Act (ARPA) of 2021 included a 100 percent COBRA subsidy for workers who have been involuntarily terminated or experienced a reduction in hours. If you have questions regarding the ARPA premium subsidy or tax credits, please contact a … The American Rescue Plan Act (ARPA), signed into law March 11, 2021, provides a 100% subsidy of premiums for employer-sponsored group health insurance continued under the Consolidated Omnibus Budget Reconciliation Act of 1986 (COBRA) and similar state continuation of coverage (mini-COBRA) programs. The IRS issued guidance on a wide range of questions pertaining to the subsidies that employers are required to offer to COBRA qualified beneficiaries under the American Rescue Plan Act. The American Rescue Plan Act of 2021 (ARPA) provides for a 100% COBRA premium subsidy to assistance eligible individuals for the period of April 1, 2021 through September 30, 2021 (the “Subsidy Period”). At the end of the sixth … U.S. legislators tasked the Department of Labor with providing the FAQs and Model Notices that pertain specifically to the ARPA COBRA subsidy and they gave the DOL a deadline of April 10th to publish the further guidance. The American Rescue Plan Act of 2021 (ARPA) included provisions providing a full COBRA subsidy to help pandemic-affected workers afford this health coverage. The subsidy is effective April 1, 2021 through September 30, 2021. Employers do not … Home > Employee Benefits > ARPA COBRA Premium Subsidy – Time for Employer Plans to Update COBRA Notices. April 7th, 2021. by ProBenefits. AEIs will not receive a payment, but rather do not have to pay any of the COBRA premium for the period of coverage from April 1, 2021 through September 30, 2021. Register Now – If registration is full, you can request the recording at the link below. ARPA requires employers who are subject to federal COBRA (or state COBRA laws commonly known as “mini-COBRA”) to temporarily provide a full subsidy of COBRA continuation coverage premiums to certain employees and their dependents who would lose coverage due to involuntary termination or a … While the specifics are still developing, here are 8 things to know about the COBRA subsidy that is included in the bill. The IRS has provided guidance on the premium assistance and tax credit under the American Rescue Plan Act of 2021 (ARPA) for continuation health coverage under COBRA. The Department of Labor has just released the required model notices, along with a dedicated COBRA subsidy page and FAQs. Section 9501 of the ARPA provides that 100% of the premiums of employees who lose health care coverage because they are involuntarily terminated (other than for gross misconduct) or have their hours of work reduced will be treated as if fully paid, beginning April 1, 2021, and ending September 30, 2021. ARPA defines an AEI as any individual that is a qualified beneficiary who is eligible for COBRA coverage between April 1, 2021, and Sept. 30, 2021, due to an involuntary termination of employment, if the AEI elects such coverage. Important note: The Smiths' COBRA coverage (and ARPA subsidy) would end on August 21, 2021 if Angie's employment had terminated on February 15, 2020. California's state continuation program is called Cal-COBRA. ARPA contains a provision to subsidize 100% of COBRA premiums (including any applicable administrative fees) for qualifying individuals and coverage from April 1, 2021 - September 30, 2021. Tzvia Feiertag, Gretchen Harders, and Jenna D. Russell . COBRA Subsidy Updates for Participants. An individual must have experienced a reduction of hours or … The American Rescue Plan Act (ARPA), signed into law by President Biden on March 11, 2021, includes several provisions requiring immediate action by employers. As we recently wrote, the American Rescue Plan Act of 2021 (ARPA) provides up to six months of free COBRA coverage, effective April 1, 2021, for certain “assistance eligible individuals.”. The COBRA subsidy … In mid-March, President Biden signed the American Rescue Plan Act of 2021 and included in its many provisions for providing COVID relief and economic stimulus is the six-month COBRA Premium Assistance (a/k/a COBRA subsidy). This means that an individual can apply the COBRA subsidy through September 30, 2021 to COBRA continuation coverage, but only if they would otherwise have been eligible for coverage. ARPA offers free COBRA continuation of coverage to AEIs, including the 2% administrative fee, for up to 6 months between April 1 st, 2021 and September 30 th, 2021. A recent Ogletree Deakins webinar on the COBRA coverage subsidy under the American Rescue Plan Act of 2021 (ARPA) produced more questions than the presenters could address during the webinar. For more information who qualifies as an AEI and additional requirements under ARPA, click here. Congress passed the $1.9 trillion COVID relief bill on March 11, 2021. on how employers will be reimbursed for the COBRA subsidy. The tight timelines and a need for additional guidance … Authors: Michael T. Brittingham. For this purpose, a qualifying event includes a reduction of hours or an involuntary termination of employment. IRS Guidance on ARPA's COBRA Subsidy & Tax Credit. An individual who, on April 1, 2021, retains a right to elect COBRA coverage retroactively may choose to make a retroactive election or to start coverage on or after April 1, 2021. ARPA requires three types of employer notices relating to the COBRA subsidy: For all individuals who become newly eligible for COBRA on or after April 1, 2021 (not just AEIs), employers must provide a notice describing eligibility for the subsidy. The COBRA Premium Subsidy Law: Understanding Your Compliance Obligations. Work with your COBRA vendor/administrator to determine what solution will be available. The ARP provides temporary premium assistance for COBRA continuation coverage for Assistance Eligible Individuals (see Q3 to determine if you are eligible). COBRA allows certain UPDATE: The following Employer FAQ now includes updates reflecting the recently issued guidance found within IRS Notice 2021-31. The subsidized coverage could end sooner if the individual’s COBRA coverage maximum period (generally, 18 months) ends before September 30, 2021. On April 7, 2021, the DOL issued guidance regarding the COBRA subsidy provisions under the American Rescue Plan Act of 2021 (ARPA). The American Rescue Plan Act (ARPA), signed into law March 11, 2021, provides a 100% subsidy of premiums for employer-sponsored group health insurance continued under the Consolidated Omnibus Budget Reconciliation Act of 1986 (COBRA) and similar state continuation of coverage (mini-COBRA) programs. Model General Notice and COBRA Continuation Coverage Election Notice: MS Word | PDF. The 18 month period is still measured from the date of the COBRA Event. Among other provisions, ARPA includes a 100% COBRA subsidy for up to six months for individuals who lost health coverage because of involuntary termination or reduction of hours during the pandemic. Under ARRA, the COBRA subsidy was available for up to 15 months. But if the individual elects COBRA, the months of COBRA coverage the individual does want must be consecutive, starting with Dec. 2020, and must be paid for, with the exception of the April 1 – Sept. 30, 2021, COBRA subsidy window. As a reminder, the ARPA allows certain individuals to elect COBRA coverage and have that COBRA coverage 100% subsidized by the federal government from April 1, 2021, to September 30, 2021. Model Notice in Connection with Extended Election Period: MS Word | PDF. ARPA … COBRA IRS Weighs in on ARPA COBRA Subsidy By Edward I. Leeds on May 19, 2021 Posted in COBRA, Health Benefits, Health Plans, Healthcare Providers / Suppliers. Sept. 30, 2021. We previously discussed the ARPA COBRA subsidies in our prior blog. The On May 18, 2021, the IRS released Notice 2021-31, a lengthy series of FAQs clarifying many aspects of the new COBRA subsidy made available under the American Rescue Plan Act of 2021 (ARPA). It does not necessarily address all of your specific issues. On March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 (ARPA) expanding COVID-19 relief efforts. On May 18, 2021, the IRS released Notice 2021-31, which contains much anticipated guidance on the American Rescue Plan Act (ARPA) COBRA premium subsidies. State Mini-COBRA ARPA Subsidy Obligations. A Complete Guide to the COBRA Subsidy Changes under ARPA for Third Party Administrators Whitepaper . April 21, 2021. On April 15, 2021 By Michelle Turner, MBA, CEBS In ARPA, COBRA. ARPA includes a provision for a COBRA continuation coverage premium subsidy of 100 percent for individuals and families who experienced an involuntary termination of employment or a reduction in hours. From April 1 to September 30, 2021, the ARPA requires employers to provide COBRA coverage to “Assistance Eligible Individuals” (AEI) at no cost to the individual, a rule known as the “COBRA subsidy.” On March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 (“ARPA” or “the Act”) into law. The premium assistance applies to periods of health coverage on or after April 1, 2021 through September 30, 2021. This COBRA subsidy is available for eligible individuals under both federal COBRA and state coverage continuation ('mini-COBRA'). The legislation goes into effect April 1, 2021 and contains provisions for a COBRA subsidy and an increase to the annual dependent care FSA contribution limit for 2021. What All Employers Need to Know. It generally applies to self-insured groups that are subject to COBRA. For example, if an individual’s COBRA continuation coverage is set to expire in July 2021, ARPA does not require it to be extended through the end of September simply because the subsidy is available. COBRA Subsidies Under the ARPA – Employer FAQ. DOL Issues Guidance and Model Notices for ARPA COBRA Subsidy. Is the COBRA subsidy is to be subsidized for the full 18 months? ARPA and COBRA Subsidies. Mere eligibility for this other coverage makes them ineligible for the credit. What the ARPA means for TPAs. The ARPA COBRA subsidy rules apply to all plans that are subject to federal COBRA. The bill includes a federal subsidy that will cover 100% of the cost of COBRA continuation coverage for up to 6 months for individuals who have had an involuntary termination of employment or reduction in hours who have federal or state continuation of coverage rights. The new 100 percent premium subsidy for COBRA coverage is in effect through September 2021. IRS Provides Clarity on ARPA COBRA Subsidy Impact on State “Mini-COBRA” Plans By Joy M. Napier-Joyce and Brian M. Johnston on May 23, 2021. The COBRA statute does not define “gross misconduct.” However, courts generally look at whether the employee intentionally engaged in reckless or deliberate conduct with the knowledge that the employer, a coworker, or clients/customers would suffer harm. The individual became eligible for COBRA coverage prior to April 1, 2021, and the period of COBRA coverage to which the individual would be entitled under federal law (18 months) overlaps with the Subsidy Period — even if the individual did not elect COBRA when it was initially offered or elected COBRA but discontinued it before April 1, 2021. For Mindful Insurance Solutions Clients . Under ARPA, the subsidy is available for a limited 6-month window, from April 1, 2021 through September 30, 2021. ARPA COBRA Subsidy Frequently Asked Compliance Questions April 2, 2021 Disclaimer We share this information with our clients and friends for general informational purposes only. The American Rescue Plan Act (ARPA), signed into law March 11, 2021, provides certain individuals a 100% subsidy of premiums for employer-sponsored group health insurance continued under the Consolidated Omnibus Budget Reconciliation Act of 1986 (COBRA) and similar state continuation of coverage program (sometimes referred to as mini-COBRA). Treasury, Labor, and Health and Human Services (the “Departments”) regarding how the new COBRA subsidy under the American Rescue Plan Act of 2021 (“ARPA”) should be administered. One such provision provides for a 100% federal subsidy of COBRA premiums (including the up-to-2% administrative fees) during the period of April 1, 2021, through September 30, 2021. 100% COBRA Subsidy Available from April 1, 2021 to September 30, 2021 . In … Below are answers to some of the most common and interesting questions we heard from our audience. BASIC WEBINAR April 15, 2021 – ARPA COBRA Subsidy April 13, 2021 . It’s hard to prove.) COBRA Premium Subsidies: Fulfilling a commitment of the Biden Administration, ARPA includes COBRA subsidy provisions aimed at making health insurance coverage accessible and affordable. ARPA subsidies cover the full cost of COBRA or mini-COBRA premiums from April 1, 2021, through Sept. 30, 2021, for employees (and their qualifying family members), if the employee lost or loses group health insurance due to an involuntary job loss or reduction in work hours. 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. The American Rescue Plan Act of 2021 (“ARPA”), includes a 100% COBRA premium subsidy for periods of coverage occurring between April 1 and September 30, 2021. An employee is out on a medical leave for six months. A six-month 100% subsidy of COBRA premiums is … The subsidy is available for the period of April 1, 2021 through September 30, 2021, if the individual is not eligible for other group health plan coverage or Medicare. For each Assistance Eligible Individual, COBRA premium assistance does not extend beyond the period of COBRA continuation March 11, 2021 – Bill Signed by President. COBRA Premium Assistance under the American Rescue Plan Act of 2021 FAQs. In March, we published an Alert providing a general overview of the COBRA subsidy created by the American Rescue Plan Act of 2021 (the “ARPA”). The House then passed the revised bill today. On May 18, 2021, the IRS published Notice 2021-31 (the Notice), providing long-awaited guidance on the temporary Consolidated Omnibus Budget Reconciliation Act (COBRA) premium assistance 1 (COBRA subsidy) established by the American Rescue Plan Act of 2021 … ARPA was signed into law in March of 2021. April 1, 2021 ARPA 100% subsidy begins to cover COBRA premiums. It should not be construed as, nor is it intended to provide, legal advice. The American Rescue Plan Act (ARPA) has made important changes to certain qualified individuals’ COBRA premiums.