• Requires insurers and employers to provide “assistance eligible individuals” (AEI) with a 100% subsidy for COBRA premiums from 4/1/21 to 9/30/21. Group health plans maintained by employers with at least 20 FT or PT employees on more than 50% of its typical business days in the previous calendar year. 

• CalCOBRA: ARPA provides that the subsidy also applies to “a State program that provides comparable continuation coverage.”

• The COBRA subsidy is being funded entirely by the federal government via fully advanceable and refundable Medicare tax credits. 

• The employer will recover the entire COBRA premium subsidy, including the 2% administrative fee, for each AEI by offsetting the employer’s regular quarterly Medicare employment tax obligation. 

• An AEI also includes eligible dependents (spouse and/or child(ren).

• Coverage Period: Once the AEI’s maximum COBRA coverage period ends, the COBRA subsidy also ends. The new law does not extend an AEI’s maximum COBRA coverage period.

• An AEI can become eligible for COBRA coverage on or after 4/1/21. However, it also includes someone who had a COBRA qualifying event BEFORE 4/1/21, and whose maximum COBRA coverage period overlaps with the Subsidy Period. Incredible!

• If an AEI was entitled to COBRA coverage previously, but never elected COBRA coverage or discontinued COBRA coverage, then a new prospective election opportunity must be provided to AEI’s who have time remaining in their maximum COBRA coverage period that would have overlapped with the Subsidy Period when they were first eligible.

• This special election opportunity begins on 4/1/21 and ends 60 days after the newly required notice of extended election period is provided.

• If the AEI newly elects COBRA coverage, they are entitled to the COBRA subsidy beginning 4/1/21, without having to elect and pay for COBRA coverage retroactively for any months prior to the Subsidy Period. Unheard of!

• Under ARPA, an employer may (but is not required to) allow AIE’s to make a limited change to the coverage they were enrolled in at the time of their qualifying event if the premium for the other coverage is the same price or cheaper than the coverage in effect at the time of the qualifying event. 

• Election Notice Supplement. Provide COBRA subsidy information to qualified beneficiaries who first become entitled to elect COBRA during the Subsidy Period. Existing COBRA election notices can be amended, or you may provide a separate document. The DOL will issue a new model notice by 5/1/21.

• Extended Election Period Notice. AEIs who first became entitled to elect COBRA prior to the Subsidy Period and whose maximum COBRA coverage period overlaps with the Subsidy Period must receive a new notice about their extended election period rights by 5/31/21. The DOL will issue a model notice by 5/1/21.

• Subsidy Expiration Notice. Plans must notify AEIs of their COBRA subsidy’s expiration between 45 and 15 days before the expiration date, unless the COBRA subsidy is ending because the AEI has become eligible for coverage under another group health plan or Medicare. The DOL will issue a model notice by 5/15/21.

• Each notice must include the forms necessary for establishing eligibility for the subsidy, description of the extended election period, etc. Like any other COBRA notice, the applicable per-day penalty for failing to provide compliant notices applies which seems patently unfair since the model notices aren't expected for some time but that's the message.