Notice Deadline Nearing for the End of COBRA Subsidies

COBRA subsidy ends September 30, 2021

• The COBRA subsidy period under the American Rescue Plan Act (“ARPA”) is nearing its end (September 30, 2021)
• If required, notices must be sent by September 15, 2021
• If a former employee presently covered under COBRA received a COBRA subsidy, you have a notice obligation.

Background

Under ARPA, an assistance eligible individual (“AEI”), which is a COBRA qualified beneficiary who becomes eligible for COBRA due to a reduction in hours or involuntary termination of employment, may be eligible for a COBRA subsidy equal to the entire COBRA premium for the period from April 1, 2021 through September 30, 2021.

Who is required?

It is the plan sponsor’s (usually the employer) responsibility to provide the notice, but if you have a COBRA administration vendor like COBRA Charmers, they may be providing this required notice on your behalf.  (NOTE: If you are using COBRA Charmers to administer your COBRA, they will be sending the required notices to affected individuals.)

The notice is not required if the COBRA subsidy is terminated due to eligibility for another group health plan or Medicare.

Action Required

Employers and plan administrators are required to provide subsidy termination notices to AEIs no more than 45 days and no less than 15 days before the date that the COBRA subsidy will end for the individual. For many individuals, this means that these notices must be sent between August 16 and September 15 to reflect the end of the COBRA subsidy period on September 30, 2021.

Click this link to the see the model notice that the DOL released.

Details about the Notice

The subsidy termination notices must include the following information:

• A statement that the COBRA subsidy will end soon and “prominent identification” of the date that it will end; and
• A statement that the individual may be eligible for coverage without a COBRA subsidy through COBRA or another group health plan.
• The notice is not required if the COBRA subsidy is terminated due to eligibility for another group health plan or Medicare.