On March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 (“ARPA” or “the Act”) into law. Among the Act’s many provisions is a temporary subsidy for COBRA coverage that will undoubtedly be a significant benefit for individuals who lost health coverage during the pandemic, but which is just as certain to be a tremendous administrative burden for employers and group health plans.
Deadline relief afforded by a new DOL and IRS Joint Notice during the COVID-19 national emergency significantly changes the administration of both self-funded and fully insured group health plans. Some of the extended deadlines are already causing confusion and increasing compliance risks for employers.
The Department of Labor’s Employee Benefits Security Administration issued guidance on April 28, 2020, providing temporary, coronavirus-related relief from many deadlines and requirements under ERISA. Notably, the guidance relaxes the standards for employers to provide notices electronically, and affords significant latitude to COBRA qualified beneficiaries for electing, and paying for, COBRA continuation coverage.