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09.08.21

Required notice deadline as ARPA COBRA subsidy comes to an end

BY , Annie Zhang

By now, employers and plan administrators are well aware that under the American Rescue Plan Act of 2021 (ARPA), 100% COBRA premium subsidies are available for certain assistance-eligible individuals during the period between April 1 and September 30, 2021. Employers and plan administrators have had to coordinate with internal departments and/or with external recordkeepers and other service providers to make sure that the plethora of ARPA notices, reporting, and administrative requirements are met. Most of this process is now automated, but there is one more deadline before the end of the subsidy period.

September 15, 2021. This is the final deadline by which plan administrators must provide assistance-eligible individuals with the Notice of Expiration of Period of Premium Assistance. In “clear and understandable language,” the notice must inform assistance-eligible individuals that (1) the premium assistance period will expire and a prominent statement of the actual expiration date, and (2) subsequent coverage options (e.g., COBRA continuation coverage, other group health plans, or through the Health Insurance Marketplace) may be available.

The purpose of the notice is to give covered individuals enough time to evaluate alternative coverage options before losing the ARPA premium assistance. Although the Department of Labor has issued a model notice, it’s important for plan sponsors to work with their legal counsel and recordkeepers to customize the notice as appropriate. Keep in mind that accurate and informative notices will mitigate administrative issues for the plan administrator and coverage issues for participants.

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Author

Damian A. Myers

Partner

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Author

Annie Zhang

Associate

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