ARPA COBRA Subsidy Update

We have received a number of questions about how we are implementing the ARPA COBRA subsidy, so we wanted to give a quick update and schedule based on what we know today (4/7/21). The Department of Labor has just released the required model notices, along with a dedicated COBRA subsidy page and FAQs. Our compliance team is currently reviewing this information and we will be providing more details soon. Below are some important dates and information that you might find helpful in the meantime.

Schedule of key dates for the American Rescue Plan Act of 2021 (ARPA) COBRA subsidy:
  • March 11, 2021. The American Rescue Plan Act of 2021 (“ARPA”) signed by President Biden.
  • April 1, 2021. COBRA subsidy effective date.
  • April 10, 2021. Department of Labor is due to respond with model notices and additional guidance. (Note: Model notices have just been released today, 4/7.) The ARPA includes specific content requirements for the notices and directs the DOL to issue model notices no later than 30 days after the date of enactment (45 days for the model expiration notice).
  • April 19, 2021. ProBenefits COBRA Portal will be updated to allow employers the ability to identify and update the individual’s eligibility for the subsidy (AEIs). At that time, we will provide detailed instructions on this process.
  • April 21, 2021. ProBenefits Compliance Webinar on ARPA COBRA subsidy and DOL guidance. Please be on the lookout for the invitation and make plans to join us on the 21st!
  • April 25, 2021. Department of Labor to issue model expiration notices as required no later than 45 days after the date of enactment.
  • May 17, 2021. ProBenefits will start sending Required Notices to people who have been identified as AEIs. AEIs who are not already COBRA participants must elect within 60 days of being provided the new election notice.
  • May – September 2021. ProBenefits will send Notice of Subsidy Expiration to all enrolled COBRA participants no more than 45 days, and no less than 15 days, prior to their premium subsidy expiration date.
  • September 30, 2021. General subsidy end date (subsidy may end earlier for some individuals).

Who is eligible for the COBRA subsidy? Assistance Eligible Individuals (“AEIs”)

ARPA defines Assistance Eligible Individuals (AEIs) as COBRA qualified beneficiaries who meet the below criteria:
  1. Coverage was lost due to involuntary termination of employment or reduction in hours, and
  2. The COBRA qualified beneficiary is within their COBRA eligibility period as of April 1, 2021, and
  3. The COBRA qualified beneficiary has not become eligible for Medicare or coverage under another group health plan.

AEIs will be able to take advantage of the subsidy in one of the following ways, depending on their status:

  • Eligible COBRA participants who have an election in place as of April 1, 2021 will be able to take advantage of the subsidy effective April 1, 2021.
  • Eligible COBRA qualified beneficiaries who do not have an election in place will have the opportunity to make an election during an Extended Election Period and will be able to take advantage of the subsidy effective April 1, 2021.
  • Eligible COBRA qualified beneficiaries who become eligible for COBRA continuation coverage on or after April 1, 2021 will be eligible for the subsidy while it is in effect.

Please note that all of this information is based on our current understanding of the Act, and is subject to change based on the DOL’s clarification. The latest COBRA subsidy information can always be found on the ProBenefits website: https://probenefits.com/category/cobra/

If you have questions about the COBRA subsidy, we are here to assist you. Contact our office via email at COBRA@probenefits.com or call us at 888-722-8382.