September 30, 2021
COBRA Subsidy ExpiredSeptember 30, 2021
The COBRA subsidy period introduced by the American Rescue Plan Act of 2021 (ARPA) ended September 30, 2021. ARPA – signed into law by President Biden on March 11, 2021 – provided a 100 percent federal subsidy of COBRA continuation coverage premiums for certain qualified beneficiaries who became eligible for COBRA continuation due to an involuntary termination or reduction in hours (Assistance Eligible Individuals, or AEIs). This federal subsidy was available for continuation coverage periods from April 1, 2021 through September 30, 2021.
August 18, 2021
American Rescue Plan Act Update
On July 26, 2021, the Internal Revenue Service (IRS) released additional guidance in the form of 11 questions-and-answers that expand upon earlier Q&A guidance (published on May 18, 2021) addressing the COBRA premium assistance provisions of the American Rescue Plan Act of 2021 (ARPA).
Specifically, the additional guidance addresses the following:
- the availability of the premium assistance to individuals eligible for an extension who had not yet elected it
- whether premium assistance for vision or dental-only coverage ends due to eligibility for other health coverage that does not include vision or dental benefits
- the availability of premium assistance under comparable state law that limits continuation coverage to government employees
- whether employers may claim the premium assistance tax credit if the SHOP exchange requires employers to pay COBRA premiums
- which party may claim the premium assistance tax credit in situations involving parties other than an insurer or former common law employer providing the COBRA coverage
For a summary of the questions-and-answers, please see our compliance alert here.
The full text of the additional guidance can be found here.
June 4, 2021
American Rescue Plan Act Update
On May 18, 2021, the Internal Revenue Service released guidance in the form of 86 questions-and-answers concerning the COBRA changes introduced by the American Rescue Plan Act of 2021 (ARPA). The guidance addresses issues related to eligibility, the extended election period, the tax credit, and notification requirements.
The full text of the guidance (IRS Notice 2021-31) can be found here: PDF
For a summary, please see our compliance alert here.
April 16, 2021
American Rescue Plan Act Update
On April 7, 2021, the DOL released guidance in the form of Frequently Asked Questions regarding the COBRA subsidy, as well as model notices as required by the Act. The model notices and FAQ are available at the links below:
- FAQs about COBRA Premium Assistance under the American Rescue Plan Act: PDF
- Model General Notice and COBRA Continuation Coverage Election Notice: PDF
- Model Notice in Connection with Extended Election Period: PDF
- Model Alternative Notice: PDF
- Notice of Expiration of Premium Assistance: PDF
- Summary of Provisions: PDF
For a summary and analysis, please see our compliance alert here.
March 12, 2021
American Rescue Plan Act
On Thursday, March 11, 2021, the President signed the American Rescue Plan Act (the “Act”) which includes continuation coverage premium assistance for certain individuals and their families who have lost employer-sponsored health coverage due to an involuntary termination or reduction in hours. The Act provides a 100 percent federal subsidy of COBRA continuation coverage premiums from April 1, 2021 through September 30, 2021.
HealthEquity submitted a comment letter to the DOL and IRS, which can be read here.
COVID Relief 2021: Understanding the Impact on Your Benefits Plans
Watch our on-demand webinar for details on the American Rescue Plan Act and its impact on benefits plans.