DOL Issues Much-Anticipated Model Notices for COBRA Premium Subsidies
On April 7, 2021, the U.S. Department of Labor issued the much-anticipated new model notices in connection with the 100% COBRA premium subsidy created under the American Rescue Plan Act of 2021. Employers are required to use the new model notices under the following circumstances:
- The COBRA election notice – to all qualified beneficiaries who have a qualifying event that is a reduction in hours or an involuntary termination of employment from April 1, 2021, through September 30, 2021:
- The notice of the extended COBRA election period – to any eligible qualified beneficiaries who are already enrolled in COBRA coverage and qualify as “assistance eligible individuals,” or for any individuals who would qualify as “assistance eligible individuals” had they elected COBRA coverage. This notice must be provided by May 31, 2021:
- The notice to any assistance eligible individuals who elected free COBRA coverage – informing such individuals that the free coverage is expiring within 15 to 45 days of the expiration:
- The DOL also issued a summary of the COBRA premium assistance provisions which may be used to help inform individuals of the COBRA subsidies. The summary also includes a sample “Request for Treatment as an Assistance Eligible Individual” form. We would recommend that plan administrators require individuals to complete this form when electing the COBRA premium subsidy:
The DOL also published FAQs (available here) which provide background information for employees about the COBRA subsidies. Unfortunately, the FAQs do not address any of the unanswered questions about the premium subsidies, except that the COBRA extensions do not apply to the deadlines applicable to the notice requirements (outlined above) for the COBRA subsidies or to the deadlines applicable to qualified beneficiaries for electing the COBRA subsidies.
Because the extensions do not apply to the deadlines applicable to the COBRA subsidies, Plan administrators should immediately begin using and issuing these new model notices as required by the American Rescue Plan Act.