The American Rescue Plan Act provides COBRA premium assistance to eligible individuals and imposes notice requirements on health plans. One such requirement is that plans must notify eligible individuals about when their premium assistance ends, and whether they may be eligible for regular COBRA coverage or coverage under another group health plan.
Background
The American Rescue Plan Act requires the full cost of COBRA premiums from April 1, 2021, through September 30, 2021, to be subsidized for certain assistance-eligible individuals whose work hours were reduced or whose employment was involuntarily terminated. The subsidies are reimbursed directly to the employer, plan administrator, or insurance company (as applicable) through a COBRA subsidy tax credit.
Notice of Subsidy Expiration
The notice of premium subsidy expiration must be provided during the 45 - 15-day period before an individual's subsidy expires. This means that, for individuals whose subsidy is expiring due to the end of the subsidy period, the notice must generally be provided from August 16, 2021, to September 15, 2021. Otherwise, the due date will depend on when an individual's maximum COBRA coverage period ends.
- Plans are not required to issue an expiration notice to individuals whose subsidy is expiring because they became eligible for other group health plan coverage or Medicare.
Model Notice Available
The U.S. Department of Labor (DOL) has issued a model notice of expiration of premium assistance (Word / PDF) that can be used to satisfy this requirement. The model is also available in Spanish (Word / PDF).