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Regulatory Update: DOL Issues COBRA Premium Subsidy FAQ

By Net Assets posted 26 days ago


(From SHRM) The U.S. Department of Labor (DOL) posted on its website guidance and model notices to help employers comply with the federal COBRA premium subsidy put in place by the American Rescue Plan Act (ARPA). Under ARPA, the federal government will pay 100 percent of COBRA insurance premiums for eligible employees who lost their jobs during the pandemic and their dependents through September 2021, allowing them to stay on their company-sponsored health plan. ARPA offers these groups a second chance to obtain COBRA coverage, even if their deadline for electing coverage or paying premiums has passed. If the credit exceeds the amount of payroll taxes due from employers, the credit would be refundable when employers submit Form 941. The guidance states that the premium assistance for assistance eligible individuals (AEIs) can last from April 1 through Sept. 30, 2021.

The DOL also issued the Model Notices that Congress required as a part of ARPA. Employers are not required to use the Model Notices; however, the DOL considers the appropriate use of the Model Notice to be good faith compliance with the notice requirements. Employers must provide the Notice of Availability to AEIs before June 1 and are required to extend a special second-chance election period to any eligible employee who is not currently enrolled in COBRA for 60 days following notice to the employee. 

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