COBRA Assistance Act Update for Employers-Deadline May 31, 2021

 

DEPARTMENT OF LABOR ISSUES GUIDANCE TO EMPLOYERS ON AMERICAN RESCUE PLAN ASSISTANCE ACT COBRA SUBSIDY- DEADLINE FOR EMPLOYERS MAY 31, 2021

On April 7, the Department of Labor issued guidance to employers regarding the new COBRA subsidy under the American Rescue Plan Assistance Act (ARPA).

Premium assistance is available to employees who previously incurred an involuntary termination of employment or reduction in hours. Employees who are not eligible include those who are currently eligible for other group healthcare coverage, eligible through a spouse’s health plan, or eligible for Medicare. Also, employees who were terminated for “gross misconduct” do not qualify for the subsidy.

Notice Requirements: Employers must issue a general COBRA notice to employees who became eligible as of April 1, 2021, but also must issue notifications to employees who incurred a reduction in hours before April 1, 2021, if the employee’s maximum COBRA election period, typically 18 months, has not expired. This would include an additional notice of the availability of the new subsidy to all employees who suffered a COBRAqualifying event within 18 months of April 1, 2021.

Notices must also be provided informing employees of the date that their eligibility to receive the COBRA subsidy under ARPA expires. Such notice must be provided 15-45 days before the date that the employee’s eligibility to receive the subsidy expires.

The deadline to provide these notices to your employees who are Assistance Eligible is May 31, 2021.

If you have any questions about this new COBRA subsidy or notice requirements, please contact Kristina Curry at kcurry@pselaw.com or 937.223.1130 for assistance.

AUTHOR: Kristina Curry
kcurry@pselaw.com


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