April 14, 2021

DOL Issues Model COBRA Subsidy Notices and Initial Guidance on COBRA Subsidy Relief under the American Rescue Plan Act of 2021

Spotlight on Benefits Blog

As discussed in our prior blog post, the American Rescue Plan Act of 2021 (ARP) requires employers that sponsor group health plans to provide a 100% COBRA subsidy for “Assistance Eligible Individuals” during the “Subsidy Period” (April 1 through September 30, 2021, or the date the participant is no longer an Assistance Eligible Individual, if earlier) and to offer a COBRA special election opportunity for certain individuals to enroll in COBRA coverage in order to receive the benefit of the COBRA subsidy.

In connection with this COBRA relief, the ARP also requires employers who are subject to its COBRA relief provisions to distribute COBRA notices that explain the COBRA subsidy, COBRA special election opportunity, and other optional COBRA relief (if an employer chooses to implement the optional relief).  In addition, the ARP requires employers to notify Assistance Eligible Individuals who receive the COBRA subsidy in advance of the date that an individual’s subsidy will expire.

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