DOL Flies Alone: Guidance on the 100% COBRA Subsidy under the American Rescue Plan Act of 2021
April 12, 2021
Authored by: Steve Evans and Lisa Van Fleet
The American Rescue Plan Act of 2021 (“ARPA”) provides that, for the period from April 1, 2021 until September 30, 2021, if an individual’s Consolidated Omnibus Budget Reconciliation Act (“COBRA”) qualifying event is an involuntary termination of employment or a reduction of hours (each, an “Assistance Eligible Individual”), then 100% of the COBRA premium is paid by the employer, health plan, or insurer and the premium expense is reimbursed by the federal government through a refundable FICA tax credit. We previously summarized the COBRA subsidy provisions under ARPA in a blog post, available by clicking here.
Guidance Provided: As expected, additional guidance implementing the COBRA subsidy was issued by the Department of Labor (“DOL”) on April 7, 2021 (the “Guidance”). The Guidance includes:
- A dedicated COBRA subsidy website
- A set of ARPA COBRA subsidy frequently asked questions
- Model notices, the use of which the DOL will consider to be good faith compliance COBRA and ARPA. These include:
- A model ARPA general notice and COBRA election notice
- A model COBRA continuation coverage notice in connection with the extended election periods
- A model alternative notice for use with insured coverage subject to state “mini-COBRA” requirements
- A model notice of expiration of the COBRA subsidy for plans to notify Assistance Eligible Individuals 15-45 days before expiration of their COBRA subsidy
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