The deadline to send a new COBRA notice required under the American Rescue Plan Act of 2021 (“ARPA”) is approaching quickly. Employers and COBRA administrators will need to send those notices no later than September 15, 2021, to satisfy that obligation.
Under ARPA, certain COBRA qualified beneficiaries are entitled to subsidized COBRA coverage through September 30, 2021. Employers and COBRA administrators have been dealing with the administrative intricacies of ARPA for several months now.
ARPA requires plan sponsors and administrators to provide a “Notice of Expiration of Premium Assistance” to Assistance Eligible Individuals (“AEIs”) at least 15 days, but not more than 45 days, before their COBRA premium assistance expires.
While the Notice has been an ongoing requirement throughout the premium assistance period, it is important for employers and administrators to keep in mind that they must provide the Notice to all AEIs who are still receiving COBRA with premium assistance as of September 30, 2021. Thus, most Notices will need to be delivered between Monday, August 16, 2021, and Wednesday, September 15, 2021, to satisfy the 15-to-45 day Notice window.
The IRS clarified (in Notice 2021-31) that the COBRA premium assistance will continue until the end of the last period of coverage beginning on or before September 30, 2021. A period of coverage for these purposes means a month (or shorter period) for which premiums would normally be charged. While most plans use a monthly period of coverage for COBRA purposes, plans with a shorter period should be mindful of the deadline to provide the Notice.
For a refresher on ARPA’s general requirements, please review our prior guidance on the COBRA premium assistance rules.