What are key dates to ensure compliance to American Rescue Plan Act of 2021?
ARPA includes a provision for a COBRA continuation coverage premium subsidy of 100 percent for individuals and families who experienced an involuntary termination of employment or reduction in hours.
Key dates with regard to the COBRA Subsidy:
- March 11, 2021 – Bill signed by President Biden
- April 1, 2021 – Subsidy effective date
- 30 days from March 11, 2021 – the U.S. Department of Labor to provide model subsidy notification notices
- 45 days from March 11, 2021 - the U.S. Department of Labor to provide model expiration of subsidy notices
- Within 60 Days from April 1 – Assistance Eligible Individuals (AEIs) who become eligible for COBRA prior to April 1, 2021 notified of subsidy
- Upon entitlement to elect COBRA – COBRA continuants who become eligible for COBRA on/after April 1, 2021 notified of subsidy
- 60 Days from date the notice of subsidy is sent – the election period for second election by the AEI expires
- 45 Days from expiration of an AEI’ s subsidy period – provide model notice of expiration of subsidy
- September 30, 2021 – general subsidy end date (subsidy may end earlier for particular individuals)
Who is an Assistance Eligible Individual (AEI)?
The subsidy will be available for Assistance Eligible Individuals (AEIs), as determined by ARPA, from April 1, 2021 through September 30, 2021. Under ARPA, COBRA participants must meet the below criteria in order to be an AEI:
- Coverage was lost due to involuntary termination of employment or reduction in hours.
- The COBRA participant is still within the COBRA eligibility period as of April 1, 2021.
- The COBRA participant has not become eligible for coverage under another group health plan.
- Eligible COBRA participants 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. This will be referred to as the "lookback period" in determining participant eligibility.
- 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 participants who become eligible for COBRA continuation coverage on or after April 1, 2021, will be eligible for the subsidy while it is in effect.
Who determines the eligibility for the subsidy?
What is the second election/extended enrollment period?
ARPA included a second/extended enrollment period for AEIs who previously did not elect but now wish to elect COBRA Coverage. The enrollment period deadline is 60 days from the date the notice of the subsidy/extended enrollment period was provided to the AEI.
Does the ARPA subsidy allow a break in coverage?
Yes. The second enrollment period allows an AEI to elect COBRA coverage from 4 / 1 /2021 to the end of their original last day of COBRA without having to pay current on all premiums due, as long as the AEI is still within the original COBRA continuation period.
What individuals are included in the “lookback” period?
Assistance eligible individuals who would still be within their maximum COBRA period, regardless of current status.
Does the subsidy apply to dental, vision, EAP and HRA plans?
At this time the subsidy appears to apply to medical/RX, dental, vision, EAP and some HRA plans. FSAs are excluded.
Does this subsidy extend the duration of COBRA for Assistance Eligible Individuals?
No. ARPA did not extend the overall COBRA continuation period.
Does ARPA change any State program requirements or time periods for election of continuation coverage?
No . ARPA does not change any requirement of a State continuation coverage program . ARPA only allows Assistance Eligible Individuals who elect continuation coverage under State insurance law to receive premium assistance from April 1, 2021 through September 30, 2021.
What is the process for refunds if a COBRA participant already paid the premiums for one of the months where the subsidy is available and the participant is an Assistance Eligible Individual?
In the case of an assistance eligible individual who pays a premium for a subsidized month, the ARPA statute requires the person to whom such payment is payable to reimburse the individual for the amount of the premium he or she paid.
Can COBRA administrators continue to charge the 2% admin fee?
Yes. The total premium amount is inclusive of any administrative fee.
If a former employee who involuntarily terminated has enrolled in group coverage with another employer but is deemed an AEI according to our records, is that person eligible to drop their current employer's coverage and enroll in fully subsidized COBRA coverage through our plan?
No. Eligibility for another group health plan would make the person ineligible for the subsidy.
If a participant was originally eligible for COBRA on September 1, 2020, and receives a second election notice for April 1, 2021, would the participant be responsible for paying premiums from September 1, 2020, through March 31, 2021, or would the participant’s eligibility pick up on April 1, 2021, for the duration of the 18 months, not to go beyond the original 18 months?
The individual would not be responsible for paying premiums for September 1, 2020 through March 31, 2021, unless the individual wished to have coverage during that time. The subsidized coverage would begin April 1, 2021, but would not go beyond the original duration of COBRA coverage.
Who will be responsible to process election forms returned by the participant?
The election forms are to be returned to the COBRA Administrator for processing.
When will the ARPA Expiration Notices be sent out by the COBRA Administrators?
The ARPA expiration notices will generate on 8 /31/2021 for 9 /30/2021 subsidy end date.
COBRA Participant Contact
Phone - 855-893-0011
Email - COBRAComplete@healthaccountservices. com
Broker and Employer Contact
Phone - 877-791-3399
Email - COBRACompleteEmployer@healthaccountservices . com
Phone - 888-882-1498
Email - cobrasupport@accruecms. com