Among those substantial COVID-19 relief provisions in the bill involves a 100 percentage COBRA premium subsidy so qualified individuals can keep on receiving health insurance for up to six weeks.
Who’s qualified? Individuals entitled to free COBRA premiums (known as Assistance Eligible Individuals) comprise anybody whose employment is involuntarily terminated (other than for gross misconduct) or has a decrease in hours, and who’s qualified for COBRA through the Free COBRA Period. Additionally, Assistance Eligible People include people who’d otherwise be Assistance Eligible People, however (I) who didn’t elect COBRA coverage or who chosen but stopped COBRA policy before April 1, 2021, and (ii) are still inside their highest 18 month COBRA period (i.e., Assistance Eligible Individuals comprises qualified people who underwent an impending termination or hours decrease as far back as November 1, 2019).
When can the subsidy perish?
Required Notices: The COBRA subsidy provisions of ARPA make two new COBRA notice requirements (along with the normal COBRA eligibility note ). Plan administrators should provide notice to Assistance Eligible Folks by May 30, 2021 that these people are entitled to the subsidy and also to register (or enrol again) in COBRA through the subsidy period. A note must also be offered to Assistance Eligible People of this subsidy’s comeback between 45 and 15 days prior to the date these people are no longer eligible for premium free COBRA.
Payment of Premiums and Reimbursement: Assistance in COBRA policy aren’t billed COBRA premiums while eligible for free COBRA. Instead, throughout the subsidy period, the healthcare plan sponsor — normally the employer (or former employer) of this Assistance Eligible Person — assumes the duty to pay COBRA premiums on behalf of the person. Afterward, the employer can get compensation for all COBRA premiums paid on behalf of Assistance Eligible People via a payroll tax charge. For credit numbers exceeding payroll taxation, the employer may apply for a refund of an overpayment.
Optional Open Enrollment: ARPA enables program administrators (at their discretion) to offer you a 90-day”open registration” window where a COBRA-covered (or qualified ) person could enroll in policy, or change to a different employer benefit plan alternative, if provided.
The U.S. Department of Labor and the Internal Revenue Service (IRS) have been granted authority to issue further guidance regarding the COBRA subsidy (like version finds ), which we’ll be following carefully.