Summer Is Ending and So Are COBRA Premium Subsidies

Insights | Summer Is Ending and So Are COBRA Premium Subsidies

Author: Shelly Hodges-Konys, CBC, Director of Compliance

As the end of summer and its lazy days draw near, it gives us the perfect opportunity to double-check our summer bucket lists and find opportunities to squeeze in some last-minute experiences.  While not nearly as exciting as summer and its adventures, COBRA premium assistance under the American Rescue Plan Act (ARPA) is also coming to an end.  This means that employers must also provide notice to individuals receiving the subsidy that their premium assistance will soon end. 

Under ARPA, the subsidy applies until the earlier of:

  • September 30th, 2021;
  • The end of an individual’s maximum duration period under COBRA; or
  • The date an individual becomes eligible for other group health plan coverage or Medicare.

The law requires that plans provide a notice of expiration of the ARPA premium assistance (and available coverage options at that point) at least 15 days and no more than 45 days before an individual’s premium assistance ends.  The notice must be provided to all individuals who are receiving premium assistance during this time. This means that all subsidy recipients whose subsidy is set to expire on September 30th, 2021, must receive a notice of subsidy expiration no earlier than August 16th and no later than September 15th.  The DOL has provided a model notice available here

The notice must explain:

  • The subsidy period will expire soon and the individual’s actual date of subsidy expiration,
  • That the individual may be eligible for continued coverage under COBRA without subsidy and the cost of such coverage, and
  • That the individual may have other health plan options available to them.

Employers are not required to provide a notice of subsidy expiration to any individual whose subsidy ends due to enrollment in other group health plan coverage or Medicare.  

Required Action

Employers that self-administer COBRA should ensure that they provide the notice timely to individuals who are receiving COBRA subsidies and that the notice contains the correct information.  For employers that utilize a COBRA administrator, it is wise to confirm that your administrator is prepared to send the notices on your behalf. If you need a refresher on ARPA COBRA premium subsidies, you can refer to our previous blogs: DOL Issues Guidance on ARPA COBRA Subsidies and IRS Provides Answers to COBRA Subsidy Questions.

Please contact your HORAN representative with additional questions at 800.544.8306.   

The information contained in this document is informational only and is not intended as, nor should it be construed as, legal or accounting advice. Neither HORAN nor its consultants provide legal, tax nor accounting advice of any kind. We make no legal representation, nor do we take legal responsibility of any kind regarding regulatory compliance. Please consult your counsel for a definitive interpretation of current statutes and regulations and their impact on you and your organization.