COBRA Subsidies under the ARPA: Model Notices and FAQs Published

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By John Welsh and Martha J. Zackin

As per our recent post, the American Rescue Plan Act of 2021 (“ARPA”) provides fully subsidized health care continuation coverage to certain individuals, among other things.  Those who are eligible for the COBRA subsidy (“assistance-eligible individuals” or “AEIs”) include workers and their dependent family members who lost group health insurance coverage due to involuntary employment termination or reduction in hours, whether or not occasioned by the COVID-19 pandemic.

Pursuant to ARPA, existing COBRA notices must be amended to explain subsidy availability and distributed by May 31, 2021.  Failure to do so will be considered a failure to meet COBRA notice requirements and penalized accordingly.   In addition, notices to each AEI receiving a subsidy must be sent between fifteen and forty-five days before the subsidy expires.  This means that if an AEI’s coverage period expires on July 31, 2021, for example, they must receive notice that the subsidy will expire and what other rights they may have between June 16 and July 16, 2021.

The Department of Labor was tasked with providing Model Notices, which it did on April 7, 2021, along with a series of FAQs. The Model Notices include the following:

  • Model ARP General Notice and COBRA Continuation Coverage Election Notice and Alternate Notice (both for use by group health plans for qualified beneficiaries who have qualifying events occurring from April 1, 2021 through September 30, 2021; alternate notice is for use where the employer is offering the AEI coverage alternatives);
  • Model COBRA Continuation Coverage Notice in Connection with Extended Election Periods and Alternate Notice (for use by group health plans for AEIs currently enrolled in COBRA continuation coverage, as well as those who would currently be AEIs if they had elected and/or maintained COBRA continuation coverage; alternate notice is for use where the employer is offering the AEI coverage alternatives);
  • Request for Treatment as an Assistance Eligible Individual; and
  • Notice of Expiration of Period of Premium Assistance (for use by group health plans to AEIs 15-45 days before their premium assistance expires).

The FAQs provide detailed information about how the law works, including information about eligibility, enrollment periods and election opportunities, coverage options, and notice requirements.  In addition, the FAQs provide information for those enrolled in individual market health insurance coverage (Q18-21).

As always, feel free to reach out to your Bello Welsh attorney with any questions.