The temporary COBRA premium subsidy and the related tax credit under the American Rescue Plan Act of 2021 (“ARPA”) is set to expire on September 30, 2021. Qualified beneficiaries who lost group health coverage due to an involuntary termination of employment or a reduction in hours were eligible for the COBRA premium subsidy if they were eligible for COBRA continuation coverage during the subsidy period that began April 1, 2021.
Pursuant to ARPA, plan administrators must provide a subsidy expiration notice to COBRA qualified beneficiaries who are receiving subsidized coverage no more than 45 days and no less than 15 days before the date their COBRA premium subsidy ends (i.e., qualified beneficiaries whose subsidy is ending because their COBRA coverage period is ending and those who have remaining unsubsidized COBRA months after September 2021). For many individuals, this notice must be sent no later than September 15, 2021, 15 days before the COBRA premium subsidy expires. It should explain that the COBRA premium subsidy will be ending and that the individual may be eligible for unsubsidized COBRA coverage or coverage under another group health plan or the Health Insurance Marketplace. A model expiration notice is available from the Department of Labor.
Employers and plan sponsors should confirm that their COBRA administrators have or will soon be sending these final notices.