American Rescue Plan Act of 2021
On March 11, 2021, President Biden signed the American Rescue Plan Act (ARPA) of 2021. Among other provisions, ARPA created a 100% COBRA premium subsidy and additional COBRA enrollment rights for certain employees (and their families) including employees who lost group health plan coverage due to an involuntary termination (gross misconduct does not apply) or reduction of hours.
Who is eligible? A former employee who experienced a COBRA qualifying event due to an involuntary termination or reduction in hours. They must be within their maximum COBRA period (generally 18 months) on April 1, 2021 are allowed subsidized COBRA coverage until September 30, 2021, the end of their COBRA maximum coverage period, or they become eligible for other employer sponsored health coverage.
This does not apply to an individual if they are eligible for other group health coverage. Examples include: a new employer’s plan, spouse’s plan or through Medicare.
What are the notice requirements?
- A general notice to all qualified beneficiaries who have a qualifying event, involuntary termination or reduction in hours.
- A notice of the extended COBRA election period to any Assistance Eligible Individual who has a qualifying event before April 1, 2021. This requirement does not include individuals whose maximum COBRA continuation coverage period, would have ended before April 1, 2021.
What information must the notices include?
- Establishes eligibility
- Contact information for the plan administrator or person maintaining it
- A description of the additional election period (if applicable)
- A description of the requirement for the Assistance Eligibility Individual that they must notify the plan when he/she becomes eligible for coverage under another group health plan
- A description of the right to receive the premium assistance, and
- If offered by the employer, a description of the option to enroll in a different coverage option available under the plan.
When can I obtain the model notices?
They can be found on the Department of Labor website. https://www.dol.gov/agencies/ebsa/laws-and-regulations/laws/cobra/premium-subsidy
Who should distribute the notices?
Work with your third-party administrator to see who will administer these required notices.
Have questions?
Visit the Charter School Community Roundtable to ask questions, get answers and discuss this topic.